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Tuesday, February 05, 2013

STOCK MARKET DECLINE COMING?


I need to post another negative title to drive traffic it appears. What a world we live in where people only come to read bad stories. I should try one day posting the title "Life is Great," I bet it would be the only day I would ever have no visitors. In all seriousness, I do have short term negative indications for tomorrow in the ES. I will say that when the market is running like this and you get these flat types of consolidations, they generally resolve to the upside. As a result I am not going balls to the wall shorting this right now. My mechanical system is still short with a stop above the market, I am not going to double down on it at this point. ( Blogger did it to me again on this paragraph won't let me left justify it )

The first thing we need is some type of lower short term high before getting too excited about the short side. We do not have any indication of a lower high yet and I am not into top picking. I think Crude Oil basically looks the same as the ES, no surprise there. Correlations are not going to POOF completely for a while as long as the FED is up to it's tricks.

In the chart above I have marked the ADX which has gotten over 50 often an early warning of some possible trouble. We also have some divergence in one of the accumulation indicators, but not anything remarkable. The problem I see with the current pattern is that we have expanding ranges. It is a megaphone type of pattern but too small of one to be a reversal pattern. It seems more likely to lead to a false break that returns back into the range of the last few days. One of my main proprietary tools is really projecting down sharply for Wednesday if Tuesday's low is taken out. However, in general this is a not a pattern I get geeked up to short.

The next chart shows Crude which in my view has a similar pattern.




In this case with Crude the ADX reached almost 60 and there is more pronounced divergence in the accumulation indicators such as the one shown. Still the fact remains were don't have anything that could be called a break of the trend yet. Will we get it? I don't know. This is a market that in my view is setup in the COT data for a decline, but I don't see a trigger yet.

I am more or less keeping the powder dry for the moment. I am still short that ES mechanical trade with no opinion on it. It is a system trade so it is what it is. I am in a couple of other things but do not have big positions anywhere. I personally do not trade these running markets like this very well so my goal is not to piss away capital trying to fade them.

Maybe I am getting back in my groove now since I felt comfortable with a couple of crass remarks tonight!

There was a comment made by the judge on the merits of the lawsuit by the Forex people in the PFG case but I am at the point where I am focusing more on making back what that punk stole and not really expecting much more back. The opinion in my view is somewhat ambiguous so I don't know what to make of it and don't care at this point. She seems to chastise the trustee for how he worded his argument while at the same time acknowledging he had some things right. Politics at it's best. Whenever I read anything about his case I just want to go kick somebody's ass and we can't do that anymore. They have taken all the fun out of things don't you think?



Good Trading




1 comment:

jeremiah82 said...

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