Futures going quite nuts again after only 2 hours

Well big move in futures right at the open. I wanted to restate from Friday:

"So today its important to watch the 1082-1085 range. A breach here will put higher probabilities on the failed W5 move, if we manage to stay above this range today and close above 1091-1092 we have to be ready for more upside. The upper side is 1096 that we need to monitor closely."

Quite ironic that we hit the low and high of day right on the head - within cents on the low and exact on the high. Now whats even worse is Fridays close ... well we closed at 1091.50 (yes right in the smack middle) - this again gives a 50/50 chance to either bear or bulls this week. It is quite ironic that we closed right there. I had mentioned on Friday I was looking for a short opportunity tonight but will hold back until probably 4:00-5:00AM tomorrow morning.

Have a good end of Sunday and look for my update post in the morning.

Key Levels to watch today

Its Friday the week before OPEX so we have to be ready for some wild swings next week. You all know me, I love swings especially on short term trading setups. I have been holding back the past few days on day trades as I wanted to see how the top would resolve itself. As mentioned in the post yesterday I am still a bit unsure of direction. You may remember one of my favorite quotes

"better being out of the markets wishing you were in, then in the markets wishing you were out"

This currently applies to my puts as I am quite concerned with another push up here. It is possible that we have set a possible short term bottom, one that actually qualifies as a valid W4 corrective move at 1085 ES. This was my main reason for my long attempt yesterday though I did not want to risk too much on this possible trade as I was still sure that we had made a failed W5 move. As it turns out we still have a high potential setup for higher ranges into OPEX.

So today its important to watch the 1082-1085 range. A breach here will put higher probabilities on the failed W5 move, if we manage to stay above this range today and close above 1091-1092 we have to be ready for more upside. The upper side is 1096 that we need to monitor closely. It is very possible that we stay within this tight range today but I would not count out a recovery to break above this range.

Below is my updated bullish count - which is currently my main concern. On the other hand remember we still have a possibility of the SPX high being a short term top at least. Take a look at the MACD again on the daily - yes - a HUGE divergence that bears should be happy about and bulls need to overcome. However a rally into the upper ranges as identified below should help bring MACD higher.

Uneasy Feeling

Something odd happened to me to me today while watching my charts and trying to pick a trade.

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?

A bit hungover

Had a few too many drinks last night so no update. I had mentioned yesterday after the close that I think the market is not quite done yet. We found support at EURUSD and I am not counting out a retest of yesterdays high and a potential to hit our target of 1107-1110. Once we get there we can figure out if we are heading for the primary targets of 1116-1130 or see the 1080 levels first. We filled the GAP from yesterday during the intraday and also retested it again today making me think that we are not quite ready to head lower.

Will not have time to post update tonight

Wife's birthday today so no time ... but wanted to let you know that I do expect prices to move a bit higher still. Yes we did reach our DOW target but the marginal high on SPX especially with the price action today does not qualify as the end of the move.

We expected the spike and sell off in the morning hours - however I did not expect a totally sideways day which means we are not done on the upside. As crazy as it seems when looking at the daily chart, the market may have more left in it.

I did add a small dec 110 put today (at the bottom of the intraday range) so position wise I am around 40% committed on what my final position should be. I am still 100% cash on futures and equities, though keep in mind I am leveraging a bit more then I should via puts - so one could say I am in quite a bit already.