Thursday, February 28, 2013

Selling Turns to Relentless Buying

Shorts didn't work yesterday as buying was more or less relentless. The resulting straight up move with limited to no pullbacks was somewhat historic in terms of the size of Monday's downward move (which took out the bullish range from 1/28-2/15 in one day). The subsequent gains since then, which followed the 42.75 point move down on Monday, have now brought the ES back to Monday's highs recouping all the losses. This has never happened in the history of the ES in terms of the size of the move and its engulfing nature. It doesn't mean we should be confident this bullish action will continue, but it certainly has to bring an air of caution to shorts and to provide some head-scratching if you didn't expect such a rise in price under the circumstances. I'm still considering the short side while reluctantly considering the continued bullish case. That means I'm in wait and see mode now to see how the markets close out the week.
Posted by Verde at 2:31 PM

2 comments:

  1. AnonymousMarch 14, 2013 at 4:42 PM

    Hi Verde - Just wanted to drop in to say that things are progressing as I stated they would in my last post to you on February 14th. We indeed went down into the SPX 1480s(1485.01) to be exact. And as I also posted would happen that day, we have come all the way up to SPX 1562.68 as I type this. We are almost to at least the SPX 1576 area that will be acheived before this uptrend completes itself. At that point, I think we either continue up to possibly SPX 1600 just to fakeout/breakout all of the 1000s of chart reading technicians that are watching that 2007 high being reached, or we chop around(could be weeks) at the 2007 highs until smart money has sucked enough retail longs in to start the impending decline. It is also possible that we could have a quick 20-40 pt drop begin once SPX 1576 is hit. But if that happens, it will only be temporary as we should go back up to start the chop. One can easily tell that it is the retail traders and Bernanke that are running the market up now. Institutional investors are just positioning themselves for what is about to start in the coming weeks. Once again, the only thing IMO that could change things and continue to take the markets higher will be the budget cut talks or a cancer cure drug(don't hold your breath on this one...lol)

    And, I was just curious if you ever dipped your toe into the Crude market? I hope so because it is a great market to trade and has been predominately what I have been trading while the ES market has been on this relentless, FED controlled uptrend.

    Anyway, hope trading has been good to you and we'll see how it all unfolds...

    Vis

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  2. VerdeMarch 18, 2013 at 3:21 AM

    Good analysis Vis...

    Now lets see if this immediate reaction to the Cyprus bailout situation will be as short-lived as the size of Cyprus is small. This could easily turn into a buying opportunity quickly. Like I said in the latest post, I'll be looking for long entries with a move below the previous highs (a move below 1525 ES). If we can fill the Gap to last Friday's close before that happens, I'll be looking at shorts... In respect to long entries, I certainly won't be trying to catch a falling knife. One thing I like to do is look for at least two attempts at new lows within a support zone before getting long. When a third lower low within that zone is followed by buying or signs of support, that is when I like to get in long. We'll see what we get following Tuesday's session. Bernanke press conference on Wednesday...

    in re to trading CL, not yet for me... it moves a little to quick for my trading strategies at this time...

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