LET ME TELL YOU ABOUT MY DAY TODAY
Surprisingly the PPT let the market fall today, and the rest of the world of US Futures Markets went with it. Another trade I made today in addition to the 2 I posted when I did them in my last post, was to short Soybean Oil. Above is a basic chart showing divergence in the PRO GO INDICATOR against the price at the highs. If you look at a weekly chart, you will see that this also occurred in weekly resistance zones, so it was time to look for a short entry in this market. I debated heavily between Soybeans and this market and determined that this was the weaker of the two, so I went to work here. Soybeans did fall more which was a surprise, but also had a bigger stop. If you risked the same amount between the two markets, the move was about the same.
Since many commodities markets are setup weekly to decline quite a bit, I am keeping my stop back to attempt to ride a larger move here. Will it happen, who knows? Consolidation within a large range bar like this is typical, so even though this looks ominious on the chart, we will probably get at the very least backing and filling here or more. I will attempt to tighten stops on this and all my other trades if they continue to move down. This could still have been a one day wonder day, we have had a ton of those this year. In these the markets has just punched itself out down and then resumed the uptrend immediately. With uncle Sam looking to buy futures every time we get a minor dip like this, it certainly would be no surprise to see everything go right back up again.
If we approach a 20 day low in the ES which is a long ways away, look for the PPT to show up with aggressive buy programs to hold those levels where fund managers could potentially have their stops. It is impossible to know exactly when they are in the markets and when they are not, although there obviously are a few people that are privy to that. However, we can trace their activities anecdotally through timely " coincidences" that do not correspond to normal market order flow.