Here is today's wave chart as of 3:30 pm. I bought a single e-mini unit at 867 near the dashed purple line after I thought that the first down wave from today's 876 high had ended. The market then put in a 20 minute up wave. There was no way to know this up wave was to be so brief until the market dropped below the low of the preceding down wave at 865.75. In any event I waited for the length of the drop from 876 to exceed 13 points (the length of yesterday's biggest reaction, then got out of my long on a small rally.I have been expecting a buy shock to hit this market for the past several days but none has materialized. This is not an encouraging sign if you are bullish as I am. I still think there is a chance we shall see a demand shock tomorrow or Friday, but if one is to develop I think the 850 level must hold on any break from today's high.
4 comments:
Carl, thanks for your updates with charts. This is a tough market to find an edge. FWIW--the market looks weak to me, so I've sold my long positions today and am back in cash. History has not been kind to folks who have gone long on FOMC days that ended up by 2% or more.
Jeff
market closing at the highs of the day but SPY volume is merely average on the day. What price do you expect the demand shock to reach
Carl, shat news could trigger a demand shock? I think supply shock before GDP is more likely.
Carl,
Do you think GE downgrade from AAA to AA will have any impact? If a company like GE teeters on the brink over the weekend, we could be set up for a black Monday next week.
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