Yesterday
Odd trade day, as some of you may know my trade rules I try not to trade in the first 15 min or last hour. So if you look at the tradable time of yesterday the range was very narrow. Now this is all normal and we have seen that before but it should not have occured yesterday - meaning the bears did not get any follow through. While we were down quite a bit yesterday I for one look at yesterday as a very bullish day - I even want to say it gave me an additional confirmation that our highs may not yet be in.
Everyone keeps on referring to "this is priced in" - a failed automaker (or two for that matter) were not priced in yet the market held up fairly well and was able to prevent a big sell off - under normal circumstances I would have expected a 5+% down day but we held the range off the open. Very bullish.
Today
We are still very close to our important 800-804 resistance here so a test before heading down further to finsih the retracement is very likly. At the same time follow through from yesterday to get closer to our major ranges at 769-771 and of course our 741 (with a stop at 748-749). The open today will be very important and will determine our scenario. If you can watch the 5-min bars in the first 45 min - indecision here and we should remain rather flat and close the day sideways - if we get a test at the upper resistance we have a great chance at a short here to bring us down to our major support in the next few days. If we do end up trading down our low should not exceed 769-771 today so that gives us a good long for 10-15 points.
The volume yesterday was pretty light on the sell-off. I believe it may have been a concerted effort to shake out any weak hands in the financials going into the FASB meeting on Thursday. If M2M gets relaxed, that potentially puts another 30-50% upside on the banks to lead us into the next leg up.
ReplyDeletewas 799.65 the test? any thoughts on whether this marked the 800 resistance? just trying to figure out if were on the leg down. thanks.
ReplyDeletedo not think that was the test, we have too little volume here, its a bit odd I have to admit. At this point I would hold out short or long until we have a better confirmation. You can see how long it took us to move 8 points today - this is not enough for me to load up on shorts. Even if that means we are missing it, we can always get back in on a break of 792.
ReplyDeleteThank you.
ReplyDeleteok volume picking up a bit here to the downside. But no confirmation yet. Did a quick kiss at the 800, if we break on the upside we can get all the way to 808 so be careful with short stops. At the same time, if we are unable to break now we should remain below the rest of the day, just a question of either remaining sideways or selling off for a break of 792.
ReplyDelete799 do you think this is good short entry now?
ReplyDelete801. may be headed towards 805-808?
ReplyDeletejust broke it. I would honestly wait for a better entry and stronger confirmation. 804 is out the window too for a good short since its very likly to go to 808 from here. I may do a small short at 804 with the assumption to average down.
ReplyDeleteyeah in the previous comment I had hinted that 808 is much more likly. I actually just went long with a small position at 799. Lets see if I can squeeze 10 points out of it.
ReplyDeleteI placed a limit order for FAZ at 19.27. let us see
ReplyDeletenot seeing enough volume on that up run, may switch positions here, its important how we behave around the 800 once we get back down those 2 points.
ReplyDeletewhere do get to see vol for SPX? Charles schwab or WSJ does not show volume. thanks.
ReplyDeleteI just looked at SPX put premium and the spread is about coule of dollars between ask and bid. Is this normal? or is beacuse the base price is too high?
ReplyDeletenot sure where to get volume on the web. Call up broker and ask them if they have anything for that. Volume is pretty important, probably the most important indicator to use (besides my MACD of course heh).
ReplyDeletemay form a small head/shoulder here. So watch once we rally off the retracement to see how high we go. If unable to break previous high short may be a good option, small entry with another entry at 798.
ReplyDeleteshort now, avg 802. Stop at 806.
ReplyDeletehere comes 808 or higher?
ReplyDeleteyeap 806-808. May look for another re-entry there. However 804 is quite important. So I may wait on the short for a bit better confirmation.
ReplyDeleteI agree. if it closed around 804-803 tomorrow should be big down.
ReplyDeleteI am out of all long positions. wait and see
ReplyDeleteChaugner, how does this look? 820?
ReplyDeleteI think downleg started
ReplyDeletelooks like 798 will be broken
ReplyDelete