800-Point Range And Nothing Happening
The SPU pit opened to a tired and frustrated trading audience this morning. We made a feeble attempt to take out the post FOMC rally high of 1515, but fell .20 short at 1514.80. Light dealer selling was seen on a scale-up level between 1513 and 1514.50. Locals took the market to the brink, looking for buy stops, but they never materialized and the tired, slightly overbought market fell lower.
The trade today is similar to all week — this is best described as little institutional interest, tight ranges and sucker breakouts. One of the keys trading on a day like today is to not get sucked into doing something because you’re in front of your screen. The good trader will avoid these types of days like the plague and wait for good opportunities — and these include volatility — to present themselves.
As for today’s opportunity, it is worth noting that if the financials continue to slip, I think there is a chance we could get a selloff towards 1498. However, this prediction will be invalidated with any trade between now and 12:30 CST above 1511. As I write, JPM just made a new low at 145. If we get above 1511, I would look for 1515 to be taken out with a trade to 1517 and a failure up there for a move back down to 1508.