Wednesday, September 05, 2007

Morning thoughts - 9/5/07

The large gap-down on ES, which is currently trading at 1479 will most certainly push my 120-min indicators to a sell at the open. So the trade is "Swing short". Since i would need a large stop of about 20 points to take this trade, i will wait for some sort of bounce to develop and incrementally start building a swing short position.

1:00 Est update

Something doesn't seem right here to short this market. The market was overbought yesterday on the hourly. It was all reset with just one gap-down. Now the hourly momentum is turning back up from oversold levels and the 60-min uptrend is still intact. That's generally a bear-trap. I went long some ETFs and options around SPX 1473 levels. If we break below intraday lows, then i am wrong and will flip short.

Tuesday, September 04, 2007

9/4/07 - Closing thoughts

As i posted in my morning thoughts, an hourly close above SPX 1484 would cause the market to challenge the next zone of resitance, which currently lies between SPX 1505 and 1512. The ideal target would be SPX 1512. But my experience has been, when the message boards are all abuzz with the same targets, it generally gets undershot or vastly overshot.

It was a good daytrading day on the long side. As for the short swing setup that i was expecting, it just did not materialize.

This market is very strong. The NYSE breadth MCO made another new highs today. This is telling us in no uncertain terms that any pullback that comes along should be bought. Remember for a swing long, we need a selloff, just like a swing short requires a rally. The selloff could be a shallow one in terms of price, but needs to be deep in terms of oscillators. Until that occurs, going swing long at these levels is a sure recipe for a whipsaw. Based on my indicators, we are somewhere around 80-90% done for this hourly swing. Tommorow 10:30 Est could generate some short setup. We'll see...

With all the hoopla out there, the daily trend on SPX still remains down. The hourly and 120-min trends are up, which is what is driving this swing. Blindly shorting a market whose 120-min trend is up, just because the daily trend is down, is plain dangerous. Patience is required here for shorts.

For now, i will daytrade the long side and will be on a lookout to short for a swing trade, when the setup arrives. I will post it real-time here, when that happens.

Good luck.

Morning thoughts...

We did not get a 120-min sell at 10:30 Est CIT. So i will have to wait, until a proper setup arrives to short this market. Will continue to remain flat until such setup arrives. An hourly close above SPX 1484, then the next resistance would be SPX 1500-1505.