A first day of the month brought some volatility especially to the RTH opening. The session had opened at the resistance and despite of the aggressive buying the sellers pushed the price back to 7100 ish level. The buyers managed to step in in front of the falling knife and completely reversed the action. This behavior is seen day after day. It means the pullbacks continue to attract the buyers and they are still willing to buy at higher prices. This is the only important information is required for traders the rest is going to derail from the process. The session ended at the top of the current balance. The ES had a similar action. It continues knocking the important resistance 2800 ish. One more push and we may see a melt up.
The indices are very correlated. Many large caps are shared among the indices. If one of the heavy stocks , like BA, is being bought it pushes all the indices up. This is the feature of electronic trading that is exploited by market makers. If someone is guessing why SP is going up when seems the broader market does not show any strength - that's the answer.
It's 9 weeks in a row the market is green. Obviously, this is annoying for the bears :) Despite all the bullishness it is prudent to remain neutral. The sentiment can change in a spit of a second.
Several scenarios could unfold going forward:
- A violent breakout to upside. That may squeeze a lot of shorts who see the important resistance and believe the market won't go higher. This is a potential melt up case.
- A breakout to upside as a grinding up action, potentially a trend up day. A slow action in a stair case fashion. This is a sneaky case. No strong volume just a methodical advance to upside leaving everyone doubtful about validity of that move.
- Remaining in the current balance for some time. A waiting time for NFP, FOMC and other geo political news.
- An attempt to breakout and failure. This is a more complicated case cause it requires to spot it on a smaller timeframe and then to stay out of the longs. A short setup with a good reward.
03/01/2019
The indices are very correlated. Many large caps are shared among the indices. If one of the heavy stocks , like BA, is being bought it pushes all the indices up. This is the feature of electronic trading that is exploited by market makers. If someone is guessing why SP is going up when seems the broader market does not show any strength - that's the answer.
It's 9 weeks in a row the market is green. Obviously, this is annoying for the bears :) Despite all the bullishness it is prudent to remain neutral. The sentiment can change in a spit of a second.
Several scenarios could unfold going forward:
- A violent breakout to upside. That may squeeze a lot of shorts who see the important resistance and believe the market won't go higher. This is a potential melt up case.
- A breakout to upside as a grinding up action, potentially a trend up day. A slow action in a stair case fashion. This is a sneaky case. No strong volume just a methodical advance to upside leaving everyone doubtful about validity of that move.
- Remaining in the current balance for some time. A waiting time for NFP, FOMC and other geo political news.
- An attempt to breakout and failure. This is a more complicated case cause it requires to spot it on a smaller timeframe and then to stay out of the longs. A short setup with a good reward.
03/01/2019
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.