Blow Off Tops

This is an intraday chart of the emini S&P500 index. The action at the end of the day is so similar to the market back in 2000.  Finishing at the highs looks good and makes the news, but what actually caused it to finish at the high? In a thin market approaching new highs every week, it doesn't take much for everyone to step out of the way...and it goes higher. This is why the late stages of bull markets often are very profitable and go higher than people think is rational.

The market quickly got above the opening range but the trade was choppy action made it tough to get to that first target of 3138.75. Once there, it failed to hold and then it went down and tested the top of the opening range twice at 3134.25. Then the once it was clear it wasn't going lower, the gunning for the high started. It was clear it was going there, but it wasn't easy to hold once back above 3138.75. 

Any guesses on low volume for the rest of the holiday week? It will not take much to go higher.

My Level To Watch S&P 500

I have gone back to some old patters and charts I use to work with. I don't know why I got away from them. Today's headline was Bridgewater Associates has an option position on the market. Is that really news? If this put position is 1.5 billion and they have 150 billion under management, is that really news? I would think that would have every day. If I had 150 billion, well I am sure I could turn it into 100 billion in not time!

Reading that article brought me back to looking at potential levels to trade off of, and what levels might hold some clues for where to guess things could go next spring.

Both of these charts are the S&P 500 Index. The horizontal blue lines are levels projected off of the opening range of the year. The number currently under scrutiny is 3102.73. Trying to short above this number is going to be met with buying. It is not worth fighting the noise in this area if you think things are overvalued and going lower. The distance between lines in 94.11 points. So once under 3102.73 there is enough of a move to make some decent trades. The Dow 30 is in a similar situation. I don't really follow the Dow 30, the number in the Dow that correspond is 27,919.60. So the DOW is a safer short, but with those 30 stocks, it only needs one of them to push through area. HD was a weak stock recently. No telling what next week's news will hold.

These are the levels I am watching. Is anybody watching anything better? I sure hope so.

Trading One Pointers or Building a Position

Is it even worth trading when in the opening range? Is it worth fading a move to the top of the range and playing it failing back to the middle, or shorting hoping every long gives up and it goes back to the lows? Today it went up within 2pts of the high of the opening range before going down to test the bottom and break through to the 1099-1998.50. It didn't last but a bar and it returned right back to 3104 area. Thanks for playing. 

The China trade deal is definitely part of the trade. Congress passing a bill putting conditions on China in Hong Kong isn't helping matters. There is also news of two U.S. Navy ships reminding China that we are around the area too. Oh, and the impeachment drams, and the Democrats deciding on who will take on Trump. Lately it seems like programs are trading news, and nothing else. Until then any down move once it stops is met by strong buying and some days that is just enough to make shorting a disaster. Too much of the Fed in the market. It is a one side trade...for now. Fighting the tape everyday makes for a long week.

Sorry for the crappy charts, just for my own thought purposes.

S&P 500 Index