Who Will Get The Last Laugh?
I get the sneaky feeling that today will be a day
where lines are drawn in the sand. Will the bears have the last laugh
or will the bulls hold strong? As of 5:30 AM PST, the bulls do not have much to
cheer about, but we all know how lower openings can result in some wonderful
rallies back to the upside. Time will tell.
Yesterday’s action, with the exception of the last hour or so, was extremely
choppy. Refer back to your one- and five-minute charts of the S&P futures
yesterday and you will see a classic chart of a market that is best viewed from
the sidelines. Feeling that the day was pretty much over, and not wanting to
give back any of the money I made in the morning, I left. It is debatable
whether or not that was a bad move. I certainly did not expect that move in the
afternoon, but with options expiration, anything is possible. The move lower did
appear to be a drip, rather than sharp moves up and down. Nonetheless, it has
set the stage for some potentially great trading today. As Kevin Haggerty says:
"Put your helmets on." I would love to end the week with an extremely
volatile session. Nothing says relaxing weekend like shooting fish in a barrel
on Friday.
Below are a couple of ideas I see setting up on the hourly and 15-minute
charts. With either trade, make sure you have the market at your back and always
use a protective stop, better yet, use a trailing stop given how volatile the
market can be.
Given that it is options expiration and a Friday during the summer, be extra
careful not to trade during the slow time (8:30-11:00 AM PST). I cannot tell you
how many traders I have seen over the years exhaust themselves during this time
with nothing to show for their efforts, only to be so "punch drunk" by
the time the good trading begins after 11:00 AM that they cannot see the setups
if they were right in front of their face. Trading, especially HVT,
is an incredibly intense activity. It is like having your body on a
heightened sense of awareness for the first hour-and-a-half. I do not know about
you, but that is tiring. A nice break each day for an hour or so is the best
thing you can do for yourself, and preferably that break involves walking
completely away from the monitors.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 908 | 1037 |
| 898 | 1022 |
| 889 | 1014 |
| 879 | 1007 |
| 875 (contract low) | 996 |
| 858-60 | 979 (key) |
| 852 (critical support) | 953 |
| 837 |
As always, feel free to send me your comments and
questions. See you in TradersWire
and have a great weekend.