ER2 has topped?

Discussion in 'Index Futures' started by polpolik, Jan 27, 2006.

  1. What do you guys think? seems like the market is still up big but ER2 is close to making a gravestone doji near the top of the trend.

    Shorting 3 contracts here. Look to cover around 690 maybe(?).
  2. I don't know what to expect. The trend is definetely up and I'm not about to start arguing with it.

    Why are you short here? I am not sure I see a reason yet, higher highs and higher lows seems to be the daily norm for the ER2...

  3. RXIS


    the trend is up but next week could become bearish
    new indicators on tuesday
  4. support resistance is pointing up but I saw today's action on my tech charts showing as overbought and signs of weakness.

    ER2 is always tricky though.

    I've got stops at 741. We'll see what happens next week.
  5. The ER2 has had a much stronger and much more independent run up than the other equity indices. The rally on Friday morning showed a lot of good volume printing on the offer on the way up. Once it peaked, there was a tremendous amount of selling of any attempt to push up. The tape never lies and I trade by it. The move seemed to act more like a blow-off than another impulsive move. Like Mike, I don't argue with the market and I don't hold overnight positions. Many have cried "top" throughout the run-up in this and other markets and they have been proven wrong. I think it is expensive to try to call turns before they happen. The real and low-risk meat of the move is after the turn has happened and there are no signs of that yet.

    A recent quote I read and that I like says, "Markets can remain illogical far longer than you or I can remain solvent." It is better to wait for confirmation.

    Good luck.
  6. Thanks guys. You're right, I usually trade when a trend has clearly been established. I guess I'm gambling a bit here but we'll see how it turns out.

    It's sad when once in a while, I get the temptation to pick out a top like this one :(
  7. I thought the quote was: "Markets can remain irrational longer than you can remain solvent." John Maynard Keynes
  8. Lorenzo


    Found this chart in another forum

    It seems that the small caps tend to show strong overperformance during the year as regards the RUSSELL 1000 and the RUSSELL 3000

    When this happes we begin to see some huge divergences that bring the RUSSELL 2000 to reduce the distance with strong corrections

    Hope it helps
  9. Good chart, thanks!

  10. #10     Jan 29, 2006