Generals chase consumer staples, which indicates their perception of this market

Kevin Haggerty is a full-time professional trader who was head of trading for Fidelity Capital Markets for seven years. Would you like Kevin to alert you of opportunities in stocks, the SPYs, QQQQs (and more) for the next day's trading? Click here for a free one-week trial to Kevin Haggerty's Professional Trading Service or call 888-484-8220 ext. 1. 

The Generals continue to chase the defensive issues like consumer staples and biotechs. The XLP (consumer staples SPDR) was +2.6% last week vs. the SPX, -0.5%.  Prior to Friday's SPX +0.7% advance, to 1281.58 the index had declined five of the previous six days into the 03/06 - 03/08 key time period and a 1268.42 low. Friday's advance came off a 4 MA VR of 36, breadth -791. The semis and various technology stocks are short-term oversold with the 5 RSI <25, so an oversold advance would be no surprise. The same was true for some gold, copper and energy stocks on Thursday, but they had up-days on Friday. NEM and FCX are both at their 200 DEMAs and are five weeks down from their rally highs, so they could get active this week as the "players" look for something to front run should the Generals reload in their portfolios with any of these commodity stocks.

NYSE volume on Friday was 1.5 billion shares, but the VR was 77 and breadth +1380, as both the SPX and Dow are now all greater than their 20, 50 and 200 DEMAs. Some of you trading service members know it as ATL #1 stocks. The focus zone on Friday was 1271 - 1270, and the SPX hit 1271.11 with some Fibonacci extension symmetry, then traded to 1284.37 before closing at 1281.58. There was a similar move for the QQQQ from the 200 DEMA zone, with entry above 40.34.  There were also RST/Trap Doors for both the IWM and MDY with the IWM trading to 72.24 after entry above 71.18 and the MDY to 140.32 from 138.62. Entries were on the 9:45 a.m. bar. There were also volatility band Trap Doors in the OIH and various energy stocks in addition to NEM. If you have the First Hour Module strategies, it was an excellent  trading day, but even better if you understand the RST strategy which is explained in the Sequence Trading Module and/or Trading With the Generals seminar material.

This week is the first quarter option expiration, so trading can get very erratic as there is usually more random price movement than usual. There are 15 trading days left until the end of Q1, so there will be lots of trading opportunities going forward as the Generals and hedge funds will be very active.

Have a good trading day,

Kevin Haggerty