Asian Markets slightly higher, European markets are more or less at the flat-line and US Futures are currently showing some weakness.
Data this morning:
January CPI came in slightly higher than expectations, continuing and new jobless claims also slightly higher, but more or less in-line with expectations. Markets have seen some selling come in after the news. Market has been churning higher and higher, but there is a feeling of reluctance in regard to continued buying.
Interesting to see the Volatility Index (VIX) finish the day higher yesterday while the overall market also finished the day near its highs. This suggests the level of complacency in the market is going down despite continued bullish action. This can only be taken as a potential sign of weakness.
Tensions in the Middle East continue to be present and cannot be ignored. Although Iran aborted sending two warships to Syria via the Suez Canal yesterday, the chance of another tension-building event seems a likely scenario. Unrest continues in Yemen, Libya, Egypt, Syria, Saudi Arabia, Algeria and Bahrain to name a few countries.
As the market seems reluctant to move higher, the best odds for significant movement in the coming days would be to the downside. Lets see if minor weakness this morning continues...
Levels to watch on the ES:
Resistance above at: 1335-1336, 1338-1338.50
Support below at: 1326-1327, 1321-1322, 1315-1316, 1308-1310
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Philadelphia Fed 35.9 vs 21.0, spikes market upward. So far that mini-breakout looks to have failed, suggesting a further move back down...
ReplyDeleteShort ES 1333.50
ReplyDeleteCan put a stop 3 ticks above entry to be safe, but I won't use a hard stop, good resistance overhead. If it breaks out, then I have to take heat, but I think the odds aren't too high for that to happen... Odds likely that even if I take heat, I will have a chance to get out of the position at break-even or minimal loss... Looking for 3-5 points here
ReplyDeleteMorning Verde - Short 1 con 1336.25
ReplyDeleteVis
Taking more heat than I like, now just have to manage the position. Always safer to have a stop to minimize loss. Especially in previous example. We tested the 1334 resistance several times so that when ES finally did break above it kept going. Will add a contract at 1338-1339 if ES trades there. No defense above that...
ReplyDeleteSince 1/28, we have seen 14 days of almost constant higher closes. Yes, it is easy to look back and realize that buying every down tick would have been very profitable, but I know this will end. I am not afraid of taking shorts. I am not afraid to trade :)
ReplyDeleteOne way to hedge is to take scalps to the long-side throughout the process of holding any shorts...
Morning Vis, I think your short will be just fine... :)
ReplyDeleteAgree, in retrospect buying the dips for the last 2 months would have have worked out fine but from a technical perspective, it is just very hard to do when all of the charts are screaming short... I have pretty resigned myself to the fact that until QE2 is over, there will not be many(if any) 30-50 pt corrections... I'm still looking for "one" to begin anytime now, but then back up to new highs until Ben quits printing in June... If any mention of QE3 is mentioned, then we will begin the process over again but should know how to respond the next time... To go long...
ReplyDeleteVis
Short additional contract at 1338.50 for average price of 1336. No defense above 1340
ReplyDeleteVolume is non-existent... May have to exit this full position, markets can easily push up further.
ReplyDeleteAdded 1 con at 1338.50 - now holding 2 cons with cost basis of 1337.50 - I may hold this position over into the next session or add again depending on the close...
ReplyDeleteVis
Yup, just looking to break even or small profit on this trade...
ReplyDeleteVis
Added 2 more cons at 1339.75 - Cost basis was then 1338.50 - Then covered 4 cons at 1338.25 for small profit...
ReplyDeleteCrazy market...
Vis
Dull market. Holding my position... Will not defend it...
ReplyDeleteNot dull to the longs that are bold enough to take positions in that direction...lol But they too will be humbled here soon... Tomorrow is Op Ex - Are the option writers going to let the call buyers keep all that money? We shall see...
ReplyDeleteVis
Filled limit order last night at 1336 ES to exit 2 contracts at break-even.
ReplyDeletere: vis, I'm sure they will have screwed a lot of shorts by expiring up here near the highs...