Here is a five minute bar chart of today's e-mini day session. I have revised my range estimate to 875-895 (blue rectangle). I shorted one unit on the breakout below the dashed red line. I put a lot of emphasis on comparing the action of the market once I have taken a position to its normal action in similar circumstances. In this case I was shorting well "in the hole". I expected a fast break on good volume to develop quickly. Instead volume dropped dramatically and the bar ranges narrowed. Almost 30 minutes after I got short I showed no results. This was evidence that the selling pressure is light. And I don't want to be short in such circumstances because it won't take many buyers to stage a substantial rally.At the moment I am sitting on my hands and will wait for a rally of 6-8 points before shorting again. If the market goes straight down without me, so be it.
2 comments:
Hi Carl,
At this point, this pull back is still just a pull back in an up trend. However, if we close today below 876.60, then my model tells me that the trend will have changed to downward. Meanwhile, I remain short from 900.00 as posted to you late yesterday in anticipation of this sell signal.
If a sell confirmation does happen, then we could see prices touch 770.60 (no typo, give or take a few ticks), at worst, although there is no guarantee that the market will actually reach that low. But, if it does, then 770.60 should stop the selling.
Thanks.
Kindest regards,
PM
PM, don't think we'll break 876. We might test later this afternoon but unlike yesterday, financials are very strong. Goldman upgraded the entire sector and as long as they remain strong, this market won't roll over.
I'll be watching the dollar. I'm with Carl on his theory about the dollar, commodities and interest rates. Reflation trade still on as of now. This afternoon should be interesting.
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