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That was a nice trade you posted on the 16th. The problem here, as I see it,
is that S&P price momentum has remained strong in the face of deteriorating
technicals and negative news and this is generally bullish for some period
of time until the bottom falls out. The difficulty in measuring strength is
compounded by lighter holiday trading activity which has made it easier for
the big traders and the pit to push the market around. On balance, it makes
it dangerous to short even on a trading basis and rallies are sharp and
difficult to catch. I took last week off, but checked the charts
occasionally and didn't see many low-risk day trades which I'd missed. Given
the mood of the market and general price trends, I suspect we will see 1310
before any serious downturn. In any event, I will be looking for a sharp and
convincing reversal before writing off this bull.
Earl
-----Original Message-----
From: Bill Bancroft <bbancroft@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, December 18, 1998 12:30 PM
Subject: S&P Update
>Hi all-
>
>You'll recall the other day, it looked as if the 1160 support level on
>the S&P March 99 contract was holding. Since Monday's close, the market
>has advanced roughly 50 points into the 1190s. If you draw a short-term
>trendline along the lows of this week's action, the slope is roughly
>11! That is almost 1% a day! It may be getting overdone in the
>short-term.
>
>I am a short-term trader, and as such, I am looking at what levels to
>take some profits off the table. One logical place is in the area of
>1199. Not only do markets sometimes pause around "handles" (1200), but
>this is the same level where the market has had trouble in the recent
>past. 1199 was the high for both 12/9 and 12/10. Of course, if the
>market does not pause there, the next possible resistance would be the
>all-time high around 1208, which was reached initially on 11/27, and
>retested on 12/8.
>
>Opinions?
>
>Bill Bancroft
>
>
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