Here is a five minute bar chart of today's e-mini day session. I was long two units anticipating a move to 827-30 today. However, the market subsequently dropped below the midpoint of the reaction from 821 to 801, a level that should have been strong support (purple dotted line). This makes me think that the high of the day has been established. Since I still think we shall see a 25 point daytime range (blue rectangle) and I am looking for today's low near 798.In retrospect the two high volume bars I pointed out this morning (red arrows) were if fact climax bars. I dismissed this possibility because the market had not rallied even half a day from yesterday's low. Confronted with the same circumstance again I would make the same call for the same reason. Climax bars generally appear after the trend they are ending has developed normal duration and extent.
7 comments:
The climax bars came just as the housing numbers came out and people bought like crazy for no reason. Its been a slow drip down since.
Climax bars generally appear after the trend they are ending has developed normal duration and extent. --- I guess a 23% up move in 10 trading days without any proper pull-back would qualify as "normal" duration?
Carl,
Your willingness to take a small loss today shows why you are such a great trader and why you are up 368 points even when the market hasn't always done what you thought it would do. Congrats on a very, very smart loss. This comment is true even if the market goes up 100 pts this afternoon.
Market spooked by something...nukes in N. Korea?
Market spooked by bad treasury auction thats not going too well.
I think market wants to consolidate recent gains here for awhile...looks healthy to me. Janet
Or only the inability of the treasury to sell its bonds ? What were they expecting...UK had the same problem this morning...Obama spending a trillion a week will soon get in trouble...
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