Daytraders, focus on these sectors

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 two major indices diverged last week, with the SPX +0.6% and the $INDU -0.2%, while the QQQQ was +0.6% and $COMPX +0.4%. Friday was a new 1290.68 intraday high and close, 1288.22 (+0.2%) for the SPX in this current short-term oversold rally from the longer-term moving average zone. There was also lots of other sequence symmetry that made it a key price zone. This is outlined daily in the Professional Trading Service. The SPX bounced, as anticipated, from the zone, and so was the new money put to work the first few days in June. 

NYSE volume on Friday was 1.57 billion shares, Volume ratio 60 and breadth +889. The SPX was +0.2%, $INDU -0.1% to 11,248, with the QQQQ -0.2% and Nasdaq -.02%. The 4 MA of the volume ratio was 60 and breadth +633, while the SPX 5 RSI is still <80 at 64.90 and 55.80 for the Dow, so there is more upside room before a short-term overbought condition. The SPX closed above its 1286 .50RT to 1326.70 from the 1245.34 low, with the .618RT at 1295.62. The Dow closed at 11,248, with the intraday high at 11,285 on Friday. The .50RT to the 11,670 bull cycle high is 11,350,  .618RT 11,425 and .786RT 11,533. The energy sector was the primary percentage gainer last week, with other percentage gain leadership coming from transportation, steel, brokers, metals and a few defense stocks.  Continuing daytrading focus on these sectors will provide the best opportunities for daytraders. There were also some gains in many of the semiconductor stocks like (TER | Quote | Chart | News | PowerRating), +9.8%, (KLAC | Quote | Chart | News | PowerRating), +5.0% and (NSM | Quote | Chart | News | PowerRating) +4.2%, to name a few. The semis were extremely short-term oversold going into last week.

The First Hour Reversals strategies, in addition to the RST strategy, continue to be the major source of daytrading profits. It doesn't matter how the major stocks exchanges make changes to execute order flow, because the opening process is an absolute joke as long as the pre-9:30AM futures nonsense is allowed to continue, as it provides a license to steal. In fact, the more electronic they try to make stock execution, the bigger joke the opening volatility becomes and the better it is for daytraders. Crude oil has traded up on more of the on again/off again Iran noise, so it looks as if it will be a weak opening as the S&P futures are -3.00 and Dow -28.00 at 7 AM, but of course that is subject to change. If the energy stocks gap up and trade right up to the +1.5 - +2.0 volatility band, they will provide intraday short opportunities.

Have a good trading day,

Kevin Haggerty