I wasn't able to blog the past two trading days, but I wanted to quickly note some significance in recent price action. The S&P 500 Futures reached a key level yesterday morning after trading above 1190 and filling a gap open since 5/3/2010. This is the level I have been waiting for since thinking about entering a swing short position. If you were able to enter a swing short anywhere above 1190, you are in good position. If you did not get short, I wouldn't worry too much about it, we will likely trade back up again before initiating the real correction. However, as you can see, the ES has already traded down more than 15 points, so getting short early after filling the gap would have given you some quick profits and/or an aggressive entry to begin a scale-in swing short in the event the market does not trade back up. Don't chase the downward action, if you missed the short entry yesterday, you will likely get another chance to get in.
This morning the 1172-1175 level (ES) needs to hold as support for the bias for the rest of the day not to be negative. Resistance above at 1181. ES needs to confirm back above 1181-1183 before any positive sentiment can come back into the market.
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Intra-day update. Support held at 1175 this morning and now the ES has traded back up into the 1181-1183 resistance. If we confirm above, look for a further move to the high 1180s.
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