Key on These 3 Intraday Volatility Strategies

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 SPX closed down -1.2% to 1534.10 on expiration Friday, with the $INDU -1.1% to 13851, following its 1st close at 14000 on Thursday. NYSE volume expanded at 2.0 billion shares, with the volume ratio just 14 on down volume of 1.7 billion shares. Breadth was -1752. The financials ($BKX and $XBD) were downside leaders at -1.5% and -2.3%, while the $TRAN was -1.6%. On the week, the $XBD was -5.1%, $BKX -3.2% and RTH -2.2%. The OIH led the upside at +2.6%, and the $HUI +1.4%. That doesn't surprise us, as I explained in the previous commentary. The $US Dollar made another new low at 80.11, and closed below its 80.39 10-year low at 80.28. Crude oil remains over 75, closing at 75.79 on Friday. A weak $US Dollar and rising crude oil prices increases the demand for gold, which is what we see now, with the $GOLD closing at 684.70 and the GLD +6.4% in the last 11 days. The TLT had an 81.40 initial downside price objective when it broke below its 86.30 head and shoulder neckline in May, and traded to 81.88 on 6/12. It hit 86.08 on Friday, before closing at 85.96, +0.9% on the day and +2.1% for the week. The LBO market is rolling over, and the $US Dollar is on the edge, with only 2 monthly lows back through 1969 being lower than the Friday 80.11 low. They are 80.05 (4/30/95) and 78.19 (930/92). Major brokerage firms like MER, LEH, and BSC are all trading below their 200-day emas, as is the NYX (NYSE) and the $BKX, which is certainly not an indication that the market is getting ready for a major upside move.

The SPX reversed the previous 6 closes to 1534.10 on Friday, so we have to expect some more weakness. Daytraders should focus more on the major indexes and ETFs if that plays out, and we will see if that sets up any month-end bounce from lower levels, from which there will be better opportunities in short-term oversold individual stocks. Energy stocks remain a primary focus, but many of them are quite extended off their recent lows from late June, so stick with the key intraday volatility strategies, like Trap Doors, RST's and 1-2-3's.

Check out Kevin's strategies and more in the 1st Hour Reversals Module, Sequence Trading Module, Trading With The Generals 2004 and the 1-2-3 Trading Module.

Have a good trading day,
Kevin Haggerty