after glancing at a few charts when similar moves occurred this is what i think. in all likelihood we have some froth in this market. maybe 1/5 chance (the number of course comes from my butt more or less) that the positive excursion will be higher than the negative one (if one is Long), i.e. 1/5 chance that we will move Up more than Down from Friday closing price. I am certainly not inclined to go all-in Short having been gored by a nasty bull before. one example when bulls go mad is from summer 2009. i don't believe we are in the same type of market now but one never knows for sure. If one is able to exclude with reasonable certainty this type of a scenario then swing Short is quite safe here.
i will add that even Jul 2009 move was contained by the Upper BB, while now Friday bar is sticking out like a sore thumb - a sign of an excessive move.
Wow!!! Some interesting things happened. July 1st / 4th of July weekend is typically a a major pivot point for the year. We rallied rather than breaking down. It was a strong decisive move off of a solid trading range. Top of the range 1360. I doubt we runaway to 1400. We are likely to form a trading range here between 1360 and 1300 going into September. Too early to "safely" short especially with such bullish strength. Wait for 1360 and expect a retest of 1300. Spike and channel.
shortie, you are still making the common mistake in terms of entry points for BB. go back to my post regarding the classic BB setup trade. textbook. every lost case that PM's me in desperation has faded something. swear to God. and what he faded was never designed to be interpreted as such.
I would not be surprised if smart money is selling 137 calls (or strangles) and thinking something like: If the market gets to 137 they use the time premium and reduced volty to complete their risk reversal positions. Asian long traders bought the hype of eur/usd last evening at 1.4575. It was the top for last 24 hours. They then pulled it back to 1.4500 where they may have hit their stop loss orders. Now at 1.4535. Will we see a repeat? But this time there might also be short sellers trapped at around 1.4515. Would it generate a long bar to go through the rect...?
Oh no, the bull is much stronger now. Funny how today in Europe there was no volume and a lot of things immediately drifted downward. Very slowly of course, and support was found late in the day. Not much institutional aggressiveness today, I suspect. Small fries wanna go down, we'll see if big volume tomorrow wants to make a new high or not.
The behavior of the market in europe (with US closed) is a proof that europe is a dwarf in world markets, and in world economies. If the bull is strong, ask it to go beyond 137 which is only 2% from current SPY.
i don't look at BB per se. i look at several different things and try to integrate them. it is not a clearly defined system and i run into troubles periodically with this type of an approach. i stay by my guess that there is a good chance of a reversal from this level.