It’s A Battle
Sellers and buyers…whichever direction you think the market may be headed, there is plenty of liquidity on the other side in the SPZ pit. This has lead to emotional rallies followed by quick selling and vice versa. Dealers have been on both sides of the equation, and as of yet, nobody has stepped to the front of the line to dominate the trade.
As for the trade itself, the market is really bouncing around unchanged in volatile movements. The path of least resistance continues to be lower, but it does not pay to sell the breaks. Wait patiently for rallies and look to scale in your sales for the rest of the morning. I am eventually looking for 1429.
Now for the tricky part. If we rally over lunchtime to a new session high, I think it’s bearish, and I would look to be a seller in the final hour of trading. If we break to the 1429 level over lunch, I would look to be a buyer in the final hour, expecting an emotional short-covering rally that could carry us to 1465.