"The trend has been established before the news is published, and in bull markets bear items are ignored and bull news exaggerated..."
So Alcoa misses, jobs data misses and the market does exactly what is predicted. It goes up - because bearish items are ignored. Now we have the headlines telling us Alcoa doesn't matter - Intel and JPM are better indicators of the economy. Wow.
Anyway, I bought more put options today at higher strikes and lower cost than the original batch purchased last week. There is a a good deal of cream in the market now and I am starting to become confident in a sudden correction.
Looking at the 60 minute 10 day chart of the SPX, we see the gap closure at the end of the day, followed by a mild sell-off. The closing candle is bearish and we see a divergence in the RSI. We also see rising volatility levels (higher lower reactions). I think the game may be on. I have shorted the ES in anticipation of a rejection at 1150ish tomorrow. Hoping to see price move incrementally - but steady - down to the 1130ish area again. A break of this support would bring on a nice down leg. Of course, I will watch the futures overnight.
Cheers.
4 comments:
Hi David ,
I agree , Rsi and Volume and complacency all point to one thing
It is possible that it has already started , the market just doest know it yet . The up today could be a B wave with the down yesterday and A ,
IF that is correct we got a C wave coming , I like C waves.
It could just as easy be be a wave one of 5 , The easy button has yet to light up
Metals , Oil and Ag products getting pounded , Bonds also are in the last let down and should rally soon , But No break in the channel yet , 3 hits no break .
Cheers
Hey Payline,
A bear market begins, but is initially not noticed. Financials led this rally, but if you look at the RIFIN, this last reaction high did not exceed the one set in October. If RIFIN fails to push past 825, I think the writing is on the wall. We will need to see a similiar trend in the COMPX as well to confirm.
Note that the increased daily volatility is also a tell.
It will be interesting to see how the market reacts to INTEL and JPM.
Let's see.
shoulda hedged a bit in the morning today, didn't do it.
Hey Kerry,
What were you looking to hedge?
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