March is key price and time period

The SPX finished the week at 1289.45, +0.2%, while the Dow diverged at -0.5% to11,062, Nasdaq, -0.2% to 2287 and the SMH, +0.1% to 41.26. Year-to- date, the SPX and Dow are +3.3% and the QQQQ, +2.1%. The intraday highs for the SPX last week were all above 1290, but the 1294.90 bull cycle high was not taken out. That should happen these last two days of February and first few days of March. NYSE volume fell to 1.43 billion shares on Friday with the volume ratio 59 and breadth +675. The short-term/oversold condition was reduced with last week's sideways action and the 4 MA VR is now 52 and breadth +301.The primary sector/group leaders last week were energy, financials and biotechs, while the semis, cyclicals and retail finished red. In fact, all three are also underperforming the SPX, +3.3% YTD. The SMH is +0.8%, RTH +0.2% and CYC, +1.0%. The leaders YTD are the XBD, +14.3%, XAU, +9.7%, OIH, +8.7% and XLE +6.6%. That is not a vote of confidence on the economy by the Generals.

We now have month-end and potential early March new money. It is significant to note that March is a key time period and has produced many intermediate highs and lows since the March 2000 bull market top. The next reversal will be to the downside, so there is no reason to be a position hero right here. The major averages continue to rally into negative news and normally that would be good, but at this point in the cycle it looks like artificial stabilizing by the Fed and its gang to hold the major indices up in the face of geopolitical events. It seems as if the Fed's admitted intervention in 1987 has become more of a regular tool rather than a last measure of protection in the financial markets.

Traders in the SPY/ESH6 had good days on Thursday and Friday with the Trap Door, and followed by the RST on Friday. The Trap Door is a key reversal strategy, especially in conjunction with the 1-day volatility bands and Fibonacci extensions/ retracements. The RST is  "The Reversal Strategy" for all time periods.

If you have not protected any or all of your long-term index proxy or equity positions, then good luck on your mission, because this is the last red alert I will flash.

Have a good trading day,

Kevin Haggerty