Consolidation of Friday's move. Very little initiative trading hence the lower volume. Two responsive moves one at the end of the 45 minute opening time bracket to consolidate the range and the other a bounce off of friday's close to further consolidate the range.
The nice thing about consolidations is it doesn't matter which way it goes as long as you're with it when it breaks. The enclosed graph shows the move. It's as simple as higher lows vs. lower highs. These are just signposts. Like exit here to go South on Highway 69. But timing is everything. So if we hold these lows then the "uptrend" is intact. Then roll statistics into the equation like today the gap didn't fill right away. But wait 70% of gaps get filled in the S & P intraday. So the money was on the gap getting filled after the overnight push up ended after the 45 minute opening bracket. That's just statistics. But then we're in an uptrend and as much as today was consolidating yes there was strength. That is we remained above Friday's close all day. Therefore, the responsive bounce at Friday's close was a high odds bet. Blah, blah, blah. As far as what is gonna happen tommorrow let me just say I've lost more money by having an opinion than just knowing structure and order flow and trading what I see. Lastly, I still see 1310 but you know what I'm smart enough to know that trader's are just truck drivers and if you can read the signs you'll get where you're going. I'm not a civil engineer building the highways nor would it make me a better trader just a frustated trader.
There wasn't any econ data out today, just slightly higher oil- that's likely why indexes were flat. Tomorrow is retail - forecast is for a light or downward looking report, couple that with another up day in the oil markets and we have no reason to take it higher.
20 point range last three days with a close at the 75% mark with a 15 point gain. We put in a soft bottom today at 1282. 25 point range is prettytypical for a 5 day period and yes we seem to be moving rather horizontally. Drum roll please...... My guess is high tommorrow @ 1293, low at 1282.50. These are in the cash market spx. Close 1286.75. My gun is loaded and the safety is off I hope I didn't shoot myself in the foot. The pressure to perform is overwhelming.
If anybody is wondering how moving averages fit into the trading plan here's what I'll often do when confronted with a day which appears one-sided like today. Get your game on first. Today the plan as outlined was long above 1282.50. Then when the market moves your way use the high as your target with a trailing stop (MA's work well here). When your target is hit scale out ( i.e. Leave some on the table to ride a possible trend day up--- only 20% of days) That way you ride the occasional 16 pt + day for all its worth. Everything over your target is gravy. I used to stop and reverse at my targets but you get killed every once in awhile and I learned to drive the truck by watching the signposts. If the MA is intact then keep in the game, this keeps you from doing something stupid like fading your arbitrary target.
Well ES hit 1309.75. That may be all we get to the upside here folks. I'm gonna try to skim off the top if possible unless we get another strong round of buying. Basically wait for the dying pushes up and as they roll over scale in your shorts.
Big deal so I stopped out as the Spoos squeezed one level higher. The thing is I saw the shelf. The dom showed continued support as characterized by a lack of follow through and big orders ticking up 4 handles at a time every time it started to sink. The reason for the fade the top versus buy the breakout is for days like today. You take a position, it looks good (that is the open and early trading did look as though it might rollover) but alot of things don't jibe and low and behold the early shorts get squeezed. By selling the top of the bracket and not the breakdown your cushion is greater and your stops are tighter. Better risk to reward. So much for the one hit wonder, huh? Just wait it's comin' the selloff, I can smell it the crazed trader mutters as he drools on his computer keyboard babbling incoherently. The longs fattening their pockets with my money. Bastards!!!