Friday, March 19, 2010


Here is a thirty minute bar chart showing day session e-mini trading. At the open this morning I thought the market was about to break to the upside from the top, 9 point box (top blue rectangle). But instead the ES dropped through the bottom of the box and is now trading in the middle of the second, lower, 9 point box. My best guess now is that this reaction will be 18-24 points in length. It should stop in the 1141-47 range. Once it is complete I expect the ES to resume its rally to 1200.


Ted said...

Carl, does that mean you are holding short now? If so, what was your entry? Or, are you waiting to get long in the 1141-1147 range? Thanks.

Daniel said...

That s why I never trade on expiration days..too volatile and difficult to read...

kcounty said...

thanks for all your updates. yours definitely sits near the top of all the ones i read.

thanks again for all your effort posting, cheers!

spycharter said...

I think today's drop in ES is due to yesterday being SPY's ex-dividend date. The dividend is usually 60 cents, so a drop of at least 60 cents was expected. That might be all there is to this drop

E said...

Markets rise, markets fall, no one has a crytal ball. The trick is to make sure a few bad trades dont escalate out of control.

Carl has shown us the importance of managing positions when they dont go as we had hoped.

It seems Carl is more technically oriented (as I am), so not particularly interested in why a market moves as much as defining the current steps and box sizes.

As far as "too difficult to read" option expiration, a double top 500
points above the big swing low a year ago either works or it doesn't.

Spycharter, nice comment, I hadn't thought of that.

Carl, thanks for your ongoing great insights. I continue to learn a lot from your thinking.

Teich said...

I am wondering if Carl was tricked into thinking that ES would break to the upside on Friday as it ramped up to 1165 pre-market.

Since "(i)ndex futures and options on futures are based on a Special Opening Quotation of the relevant underlying index" [ from ], I wonder if the ramp-up pre-market to 1165 was settlement-driven?