Bear trap, they grabbed most of the stops, and what better place to do it than piercing through multi year lows, where most are located, they proceeded to accumulate as much as they could then they produced a hammer like action that is typical of temporary bottoms with intense volume. Although the ES produced a confirmed reversal formation at the very lows it was not until it got back up to Globex Low and decisively broke it that things got intense, after that, it was just a matter of buying the retracements and holding as much as you possibly could and if you were focused until the EOD. The move was very well orchestrated but truth be told, you can follow the shadow of the giants just by studying what price is doing. The move was relentless taking out every near term multi day resistance point with little effort until it had enough, due to time and not momentum, and finally closed and hold at the 50% retracement level of recent swing highs (1060s) to swing lows (today lod). In short, it was a trap with a high element of surprise the demand was there but the supply was not. As far as fundamental reasons, I haven't got a clue so just gave you the price action version which is all I know. Anek
This guy is right, it was a test of the prior lows. We will likely rally from here, some follow through tomorrow would be nice to see.
Anyone know at what time today the SEC released the 13F filings? I wonder if that had any part in today's action. Unlike the other major ETFs, EEM posted all-time record volume today. Harvard's 13F showed they increased their EEM holdings 10x in the last quarter, making it their largest single holding (as of 9/30). The two could be completely unrelated, but it's an interesting coincidence..
Ok I will take a stab at your question. Many investors gave up last week and dumped their holdings, many long only players have been liquidating most of their holdings. Today was the final give up for alot of these players. Today futures traders gunned the 825 low and many people jumped on board shorting the breakdown. Astute traders took their profits on the breakdown. They then waited for a bear flag to form and get short at the 20ema etc on the 5 minute chart. The market "DID NOT DO" what it was supposed to do and ignored the flag and kept going up. Smart traders covered shorts and went long with a stop below the 825 level and were able to hold their positions for the day. A trend change is at hand and IMHO we are going to go up over the next few months to test the monthly downtrend ma's in the major indices. I don't think 825 will be seen for a long time in the ES and taking long positions here and holding for a few months is in my mind the right thing to do. Smart traders will enter and reap profits from the coming up move but many mom and pops who dumped their 401ks will not come back for a very long time.
no deleveraging, the age of prosperity is far from over, and the age of deregulation isn't over either. this bear market is just a shakeout.
What I found particularly curious was that the cascade down below last month's low in the ES was done during lunchtime (typically low volume), and the reversal was a V snapback - not a double bottom with push and pull base-building. It certainly looked like an orchestrated move to take out stops below last month low, only to load up down there before the reversal push higher occurred. Yes, the market was due for a snapback rally, but this V bottom at lunchtime was not just the result of collective actions of thousands of players with differing viewpoints. This was a well planned and executed move by some who can afford to push the futures in a desired direction for short periods of time (and thus the whole market via the arbitrage mechanism). Truly a spectacle to behold.
My honest answer. Daily price swings at these levels are random. I wouldn't read too much into today's bounce. We're down 7%, we're up 5%. Same shit, different day. If we manage to base here for a couple of weeks (better: months) and break through 1050/1100 with good volume and a lot less volatility I'd give the benefit of the doubt to the bulls. Until then, we're in a downtrend as far as I am concerned. Doesn't mean we can't bounce 20, 30% in a 'melt up' of course and still be a in a downtrend. More weird things have happened in the last couple months.
The illuminati and the boogie man were shorting hard in the morning session but the Plunge Protection Team had more money left to buy in the afternoon...