Friday, June 19, 2009

Odd SPY ES divergence

As mentioned I had changed my stops yesterday slightly above the high of the day. Stops were hit but one thing I noticed is a very strong divergence between ES and spy this morning. I had seen small divergences before but we are talking about almost 4 points here.

Not quite sure what to make of this. As a result I had re-shorted my original position close to the morning high at ES and re-added my other limit orders.

Today is option expiration so it should be fairly range bound. I will hold on to all shorts today even if we make a move towards the 928-930 range on SPX. While we should expect a spinner I am looking for a below 920 close on SPX. Any close above and I have to figure out what to do with my shorts into the weekend.


  1. Afternoon Chris; holding tight on my SRS, FAZ and ERY...maybe crazy, but still expecting a pullback...if not today then next week. Any good "hints" would be appreciated. Steve

  2. doing the same exact thing. Holding onto all my core short positions. Added more yesterday. Also re-added futures.

    The close will be important today and based on that I may hedge or not.

    Here is one thing that I am seeing on all my watch lists - weakness. Not seeing any strength in any particular sector here. All are setting up for some nice breaks to the downside. XLF wedge, IYR triangle.

    Considering we had a big drop of 50 points - any 50 point drop before had been bought by dip buyers within a day at most. Yet here we are inching up slowly.

    A few days ago I had made some statements in the comment for a break of the 900. We cannot take on this range with oversold conditions or we will fail. If you look at the 60min on many charts you can see we are very well positioned now for a clean break down for at least 40 points without having to worry about triggering buying on oversold conditions.

    If this here is distribution to go higher, well it should have happened already. One key sign for me is that my core shorts (weak ones and high risk front runners) are staying pretty even as the market goes higher. They go down more then the market when it drops - and go up slower when the market increases. Perfect sign of continuation here.

  3. Great to have your analysis...I get nervous at times (probably always will)...but it does get addictive! Steve

  4. did you see me last week? closing out at the top after nailing the entry. Thats what I call nervous and emotional. Missed a decent size 5 digit gain because of a few hundred bucks. That's what I would call silly =)

  5. today now SPX at 917, reverse at 915 to 920 and then big down to 908-898? what do you think Chris? and rally on Monday

  6. 1.5 pts before reversal. then 5-8 pts up. Then close at 918 pls =)

  7. wanna see 914.75-914.85 first before reversing.

  8. well close enough for a little SSO here.

    SSO @ 26.02 - all other accounts are in positions, so thats the only thing I could do for a hedge here.

  9. closed out SSO here .. too much weakness. Not expecting a big rally here but anything can happen.

    I think LOD is in, do not expect any more big moves here. 915-920 should be the range for the rest of the day.

    Disclaimer: its opex, anything can happen

  10. closed out futures. Only short via core equities and some ETF's

    May add a hedge after hours. Waiting to see now.

  11. XLF causing all this trouble here. Nice little upside breakout on the wedge there. SKF currently my largest down position in terms of cash, everything else still behaving nicely.

  12. sigh there we go .... more upside next week if we close up here and do not reverse down.

    Yet again another day of have a great open P/L just to get the shaft again at the end of the day. Still up overall for the week and open profits in the shorts but what a pain this is.