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Postulate all you want, as long as the price keeps rising this cycle is
bullish. I have yet to get a sell signal on this leg. One could back spread a
position at this time and if a violent break takes place, clean up. If the
pattern follows,. Monday should be the opposite of today, expiration Friday,
therefore up. You can write the scenario of what you think will happen, but the
market will do its thing and burn you 90% of the time. Trade your system not
your feelings. If the system is good everything will be fine and you won't miss
a thing. The facts are interesting though. Good trading. Ira.
Earl Adamy wrote:
> The recent high in the S&P is about 10 points short of the .618 retracement
> of the entire decline July 20 - Oct 8. Breadth indicators, such as daily
> McClellan Oscillator and Summation, are nicely confirming the rally from the
> October low. One of the more puzzling aspects of the rally from the Oct low
> has been the relatively light volume on the futures whether one measures by
> contract volume or net tick volume (net intraday up/dn ticks). Ditto for the
> SPY (S&P depository receipts) which has always provided good volume
> confirmations and does so without the reporting lag of the futures.
>
> We are currently in the range of the 9/23 high on the S&P: on 9/23 high, Net
> tick volume was plus 4 while it was minus 84 at the 10/20 high. Similarly
> OBV on daily futures data showed 12650m on 9/23 and 12370m on 10/20.
> Similarly OBV on SPY shows 28703m on 9/23 and 22041m on 10/20. (Values will
> vary depending upon starting point - it is the comparative relationship
> which is important).
>
> The talking heads would have us believe that a bear market rally must be
> sharp and strong on heavy volume and narrow breadth - not what we are seeing
> here. Further, we do know that huge sums are flowing into money market
> funds, yet it doesn't look like this cash is being committed. Given the size
> of the rally to date, I frankly would have expected to see at least one 500+
> point Dow day fueled by panicked buyers.
>
> So all is not what is seems here.
>
> Earl
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