Here are the 4 areas to focus on this week

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. 

After all the earnings hype, Middle East news, and economic reports, the net change in the SPX for the past two weeks is about zero. The SPX closed last week at 1267 vs. 1264.03 the week ending 2/03/06. The Dow, +0.3% on Friday, to 10,919, is pushing the 10,950 upper resistance, but has been in a narrow consolidation between 10,950 - 10,700 for almost three months. The net change for the Dow is just +1.2% from the 10,783 12/31/04 close, in spite of all the glowing earnings and economic hype of the media/brokerage firms. Taking out 11,047 should make RST sell players very happy. NYSE volume was 1.69 billion shares Friday, with the volume ratio 42 and breadth -127, both negative relative to the +0.3% gains for the SPX and Dow. The up volume/down volume ratio for the week was 93 and breadth just +179.

Although energy was a knife-down last week with the OIH -4.9% and XLE -4.6%, traders made the most money on the long side as there were big morning declines and then good contra moves. The same was true for the SPY, QQQQ and SMH on Friday. In fact, the SMH led the week at +2.7%, while the DIA was +1.3% vs. the SPY, +0.4% and QQQQ +0.2%. Index proxy pricing is until 4:15 PM so there is always some differences vs. the cash index in the final pricing. Because of the selloff last week, the energy stocks are a key day trading focus this week on the long side, in addition to copper and gold stocks like (FCX | Quote | Chart | News | PowerRating), (PD | Quote | Chart | News | PowerRating) and (NEM | Quote | Chart | News | PowerRating).

Each rally in the major index has been supported by fewer stocks, so that scenario is obviously a strong negative unless changed. You can see this clearly in the Dow with the bullish percentage figure now just 57%. Key price and time zones are only posted in the trading service.

Have a good trading day,

Kevin Haggerty