Looks like the Euro Crisis is over

How many more ways do you want it to be said "the technical reading of the market" is BULLISH

 

the NQ is a very thin traded instrument and not one that is dominated by large commercial participants like the ES - that is traded mainly by retail traders and small cta managed funds - cpo pools. This is not the instrument to gauge what is the strength of the rally, that would be done in the ES.

ES open interest as of friday close was right at extreme out of balance ratio - too many holding long positions and hardly anyone of significant size hold short positions. The ES has been crawling higher for almost two full trading days in the extreme out of balance open interest ratio environment - this makes it difficult for ES to keep trading higher unless we have catalyst for newly initiated buyers to keep buying price near new highs - due to fact there is no longer significant short supply that can be pushed into short covering. To bring in additional and continued newly initiated buying into ES, at the level that can fuel additional rally, we will need a lot of equities buy programs during US cash session - or additional drop in US dollar - or some very good news releases - we will need a catalyst.

My point is the ES will need a solid catalyst under current open interest condition to draw significant newly initiated buying at the recent upper range of price near our highs - or buying at "retail" pricing levels which is an inefficient exercise versus buying at pullback price levels. The ES will usually stick around in extreme out of balance open interest for 1 to 3 trading days before a long liquidation "cash out" move back into previous range - at least a 12 to 20 point move off highs. I would not be surprised on Monday or Tuesday to see ES trade back to 1300 or lower from a long liquidation move - back towards open interest balance and away from extreme out of balance. I have found that markets never stay at extreme out of balance open interest condition very long - these are signals I use to start looking for market directional change swing moves.

 

You better hope APPL blows out earnings Tuesday and does not pull a GOOG.

 

Thanks,good post.Apart from the odd post like this,really this place should be called A.T - amateur trader. Place is over run by bigmouth losers- which tells you all you need to know about what kind of customers the vendors prefer.

 

Which crisis ? Never heard about that ????

 

Open interest is just the number of unsettled contracts. How do you figure from that the disbalance between the buyers an sellers?

 

Not buy a long shot. We are not out of the woods on either the US housing crisis nor the Euro dollar. I spoke to a commercial lender a few years back in 2009 and he stated "It is going to take 20 to 30 years to clean this mess up." When unemployment is at 4% inthe US and the EU is owned buy the Chinese then I will say it it over. There was a another report about how in the UK they are experiencing a lost generation.

http://blogs.wsj.com/source/2011/12/01/the-u-k-s-lost-generation/

Akuma

 

You mean future contracts? I have the same question. +1

 

Crisis? What crisis?
Shhhsh, there has never been a crisis!

Market expansion, higher profits, less deficits, less unemployment, increasing consumer spending, higher tax revenue, decreasing sovereign and corporate debt.

Did you not notice?

 

I only notice that your reply is quite sarcastic.