For weeks now we have been talking about the DOW 10300 and a new marginal high on SPX - it finally happened. Though keep in mind I am not necessarily saying this was a great call - it seems any resistance number you name will eventually be reached, just like it did for 880 which seemed a great call back then, 930, [insert any other top calling attempt here] - currently we are at marginal new high of 110X - yeah way to go Chris =)
We had described our scenarios to look for yesterday, while I did expect slightly higher prices we were pretty close and it seemed at first we were right on the money. However, the move after having hit the new high for SPX yesterday does not sit very well with me at all. Yes we have light volume due to holiday but todays sell off has even less volume then our peak yesterday - a bit odd and suspicious.
So during the trade day today - if you followed me in the comments you can see I was a bit all over the place, not my normal type of style. So at this point - I think I have fallen for over analyzing this market a bit again - trying to make sense of the moves it makes, and trying to anticipate direction and yet again realizing that anything outside of a 10 point range is still extremely difficult for me to gauge. Maybe its just my german mentality, the need to be in control and having the ability to anticipate what will happen that has driven me a bit mad here today. My overall views are bearish - but today I started to question myself again - and I think rightfully so.
Take a look at how far EURUSD has come down while ES did not make much of a move. EURUSD found support just as we had anticipated but I was very surprised to see that the dollar did not take down the market more then it did. Keep in mind my entire basis for the market trending lower has been the dollar. We have been talking about the dollar for months now and for the past week I have been getting very suspicious of something going on - we seem to be loosing our relationship more and more. To be honest I am not sure what effect this could have - and whether or not this divergence will balance itself out again or give us first signs of things to change. We need to keep our eyes on this one very closely.
So overall - I see myself in no mans land again - not sure what to make of this and whether or not we had a failed W5 (as per the chart from earlier in the week) with an ABC correction?
Yellow indicating a completed 5 wave move, blue indicating a correction which will ultimately mean higher prices. The move off the highs does not look impulsive to me at all - meaning we should not expect much follow through. Next week being OPEX week will even add more madness to this. So I think its time again for me to stop trying to figure out the mid/long term direction. Just play it day by day - that has worked amazing in the past didn't it?
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