A few more thoughts. Then I'm done with this thread: In addition to the two major armies (buyers and sellers) there are minor alliances that form as well. Buyers and sellers looking to cover after price movement. Scalpers. VWAP'ers. So the thing to do is get in tune with ORDER FLOW Then figure out your better risk/reward set-ups---you can't win all the battles. Lastly you can win the battle but lose the war. That is, if you're countertrend scalping or trading with a small amount of capital and "winning" you may have actually lost return in commissions and appreciation by not deploying larger positions in the direction of the major trend. Good Luck Lojanica Out!!!
Actually I thought of another thing. Learn patterns. Today was a gap up, then squeeze higher all day. It was the path of least resistance. No largge trader was willing to sell so it just continues to squeeze higher. Every 30 minutes or so the news and order flow is reevaluated to determine the most profitable and least risky direction. Tomorrow is another day as well and the big traders will be looking to set-up their shorts/liquidate their buys into the close for tomorrows sell-off into support.
We're closing in on 1130. I need to watch what happens in and around this range for clues. Someone started lightly selling today at 1122. That's spitting distance to 1130. This rollover won't happen quickly as more money needs to be on the table otherwise it's not worth the effort to take it down. Clearly if we could make new highs the rush of money into the market would make it extremely ripe for takedown. Having said that range has contracted as expected in bull climbs. Volatility is decreasing. Roiled markets are being calmed by intervention from "The Shadow." So for now I'm like a remora picking up scraps.
Wikipedia: There is controversy whether a remora's diet is primarily leftover fragments, or the feces of the host. In some species (Echeneis naucrates and E. neucratoides) consumption of host feces is strongly indicated in gut dissections. Hey at least I know my place.....
Macroeconomic Lessons What a low volume lifeless market. Can barely get filled 'cause there's no players in the house... Look the Fed is gonna monetize. But to get the push for that move they need the cash money off the sidelines and outta bonds. The money is moving into the USD which is good. IMHO they need to let the equities market deflate to this SP500 1030 which is the 200d ma area so the Players can move in. This will sweep HUGE money flows into the equities market, out of bonds, out of cash and then when the momentum builds they can keep the spigot open but monetize and inflate the crap out of the debt. Of course there is tricky stuff for them and you. That is the timing is crucial. That's why we are just sitting here crawling higher. We may even make it to 1150 again although I think we rollover in the 1130-1135 region. My plan wait. Look to get long undervalued equities and commodities if we ever get a correction to base support. Then you will be positioned for appreciation and inflation. Leverage up on the bull moves in the futures market if you have a risk appetite to juice up returns at key entry points. Sell calls against long positions at major resistance points to collect time premium and to hedge some downside risk as the ride will be bumpy at times.
Update target for SPOOS high 1132.50 Then it will likely hang out in a 10-15 pt range for awhile before a change in short term trend to retest bottom of range at 1030 to 1050 area over the next few months. July 4th is a good time for a bottom. JMHO
One of the things I measure is the velocity of money flow. The force required to move higher is diminishing. My measures show institutional money flows are slowing. It takes INSTITUTIONAL MONEY to make the market move. In other words there is a SLIGHT divergence between price appreciation and the cumulative net buying. One of two things will need to happen: 1) A big push of sidelined money or 2) A correction to bring the two to parity. The market's not ready for a thud but soon. I'll try to be timely with a post when it happens but will be out of the office for quite awhile and I am neutral or hedged at this point. FLAT. I may not be able to kick off a short because I am a one man show and I do not leave unmonitored positions. BTW it COULD go higher but that's the least likely scenario. I will believe new yearly highs when I see them and if they do happen all the better..... Good Luck
Yesterday afternoon and this afternoon somebody has been SLOWLY selling the top of the range. 14/15 trading days have been accumulation. Someone's gonna get antsy with this much money on the table. It's like a game of chicken on the highway.
In another thread somebody mentioned the Open for the year as a "Line in the Sand" and that is certainly becoming a truism. For now above 1115 long and below 1112 short. I myself am flat because I do not like crap shoots.
I put today's numbers into the "machine." The algo says high of 1129.75 in the SPOOS at 10:05am EST on Monday March 8th, 2010. I expect a short-term high with a retest of 1030 to 1050 area with a short term and possible long term bear market bottom on July 5th, 2010 at 8:05 am EST. Now I am truly done with this thread.