I mean really ....

This market is impossible to trade unless you take your profits after a 10 point (mainly overnight move). Some may get lucky getting some of this run on either side - I am not one of them.

This truly is insane. In the past 2 weeks I finally got my confidence back because I had some great entries on both the long and short side - positions ended up with nice profits but I was not willing to let it go after 10 points - not greed but trying to trade a proper swing. Its ironic but my P/L over the past weeks is pretty much zero (besides the commissions) since everything ended up stopping out at break even - lol

Regardless of those frustrations - I am quite confident again and feel a lot easier taking positions then before. Patience is a virtue. As I am slowing down with work starting next week I will finally have time to dedicate towards this blog again - I hope you all are still around.

Long @ 1093 ES

Just went short

Full position. No stops yet but mental of course above 1118 SPX

Wow

Did not expect that one ... especially after hours. Thats the first time in a while that we get something like this especially after hours. Generally its before the open but now for asia and europe to absorb this news overnight - a lot can happen on either side - another 15+ pts lower? or back to break even at the open as the recession is truly over now that the feds are tightening.

I took short positions at 3:00 expecting some type of selling, and the fact that we had a 2 point range in the last hour the day before opex made me cover the position at break even anticipating a run towards 1118 as the worst case bear scenario to re-short.

Frustrating Market (at least for me)

Emotions + trading = bad combination

I am not sure about you guys but I am quite frustrated at the moment. Of course the biggest issue was missing the drop after being bearish for most of the run up due to work. Drop finally comes and this bear is not on the bus (yeah it almost sounds like its from a book).

"It appears the market is waiting for cash hours to try to induce a rally and then possibly run some stops (maybe mine) on the upper range. We are still close enough to jump to 1076 by 10:00AM. This would put a lot of shorts under a lot of pressure - primarily talking about more longer term committed positions that may need hedges above those range or potential partial covering."

I had commented on this yesterday on the post and voila - looks like that scenario unfolded but in a different time pattern. So market breaks out, does NOT sell off after reaching the new range and closes at the highs. This of course lead to a new range expansion bringing us back into the 1076 to 1102 SPX. Well, looking at the futures now and EURUSD - we may be going for the move that I had been positioned for since wednesday - of course only after giving us a false breakout above and running said stops lol.

Now of course this is not guaranteed, but looking at ES at the moment we should see more downside before cash hours giving us a potential stepping day down due to an open 1% outside of previous close.

On the other hand, we made a higher high and if we remain above yesterdays low we would also be putting in a higher low. I am giving this scenario less then 30% chance at this point due to the pressures we are seeing on currencies. End result again, this bear not on the bus.

Price action purely on ES dictates a move towards 1095-1102, my personal opinion based on charts and other components I am seeing indicates failure - but too late to chase it now as you have to assume a stop above yesterdays high. Not willing to take this risk at the moment even though I am giving it less then 30% chance (so maybe those chances are a bit better then I want to make myself think).

To throw another scenario on the table, we have seen a lot of sideways action here absorbing selling pressures, so IF we are to end up at last week lows again volume will be a key indicator. It is very possible that we end up testing it on lower volume brining in more buyers to then re-attack the 1102 range. While this is possible, it is unlikely and revisiting the lows should bring more selling. The main reason for additional selling is the past 5-6 months of buyers that got sucked in looking for a way out. We have seen the first wave of emotional selling but have not gone into panic mode - a retest of the lows will put more pressure on bulls.

Ok enough for now ... 100% cash and frustrated !!!!

So many important trendlines

ES is hugging this important line here. I had made some comments yesterday but not real decision was made. We are currently in such a congested zone in terms of price AND time that we should see quite a bit of action today. I had added to my shorts overnight but still relatively small.

Lets see what the US premarket does by 8:45AM.

Decision Time

Market has had enough time to absorb selling pressure and has held up pretty well. We are at a key trendline at the moment and a decision is pretty close. I dare to say that if we push through those levels here on the upside we will likely see the 1100 SPX levels again very soon.

If we cannot stay above 1068 SPX by 2:15PM we will likely revist the lows of the day. Though call. I just took a small short position with a tight stop at high of day ES. Chances are 50/50.

EURUSD Rare double fib

A chart speaks a thousand words. As mentioned in previous post I took some long positions today. EURUSD made a significant low earlier in the day that was not broken even as the rest of the markets moved lower. Double fib targets are quite rare and once those hit at least one of them should provide a boundary. So we have hit the 50% retracement of our lows in the past 18 some months and also the 38% level in our 2 year chart.

Now what does this mean for the market. In my last larger post I was putting up the scenario for 1065 (http://chaugner.blogspot.com/2010/01/work-work.html) which was hit today even with a DOW test at 10K. This is significant. We also hit our previous maximum pull back range of 85 points (http://chaugner.blogspot.com/2010/01/targets.html). Today we hit a total of 88 points pull back of our highs - right at the edge.

So we have a great low risk entry here on the long side. This is either the last chance for this market to finish a cyclical bull cycle into summer or the top is in. Looking at the daily charts - they are all pointing down. Weekly is about to give our final confirmation that things have changed. On the monthly chart we have to be a bit more patient but even a move towards 1118 this month confirms a top. So either way, we are in good shape.

So in summary - we are on the verge of deciding the direction for the next few months. EURUSD points to a move higher - SPX is 51% on a move lower. Currencies and markets can decouple for extended time frames so do not expect the dollar to lead this move. We have been talking about the dollar frequently now for the past year and I have always been saying - "dollar does, so follows SPX" - for the next few weeks, possibly even months that relationship will show more and more disconnects and will most likely not be useful as any type of indicator.

Will try to post update tonight

Actually just took a small long position. Been out of the market for a while now due to work but been checking charts and volume at night. This area here looks very well protected and more importantly EURUSD hit a KEY support point that should provide quite a large amount of support.

IF this support holds here for EURUSD - we should see quite a lot more upside on SPX in general. As mentioned many times when shorting EURUSD in the past, it just does not feel its time to be an all out dollar bull. So I am taking my stance here that the low for EURUSD is quite possibly in for the next 4-6 weeks. Does not necessarily mean SPX low is in here but carry traders could use this as an excuse to induce a rally.