Not for long
By davidc November 14, 2008
Its all a bit too neat , this was my thoughts when my head stopped spinning , for me today was frantic, i got sucked in short but quickly reversed and went long on the SPX.
I was quite pleased as it was my first trade based on nothing beyond EW ( and volume ). I was in a live chat room with some traders that i know , over on DH´s blog Emini-addict and as we bounced ..bank was goin vertical just as i saw this ( right ) unfold. This is a minute chart so with little time and not getting the count perfect i considered that I was seeing a ” fractal ” of what was to unfold. Then came the downside of live chat , as I typed ” long ” into the chatbox a few other typed short , still i decided to hold the position and boy… Its been my best trade yet profit wise. I know these days dont come often so im thankful I was on the right side of it. Once we started to chew around 855 I knew i was good and put the stop below the triangle considering it a wave 2 in the bigger wave. Im not sure how perfect EW that is , but it was good enough for me. As i zoomed out to bigger time frames the fractal proved to be just that.
Dollar and Oil
Got stopped out of my dollar long ( from euros ) for a small loss, I had not moved the stop ,, doh. ( stoopid ) . I was So busy watching the action on the SPX. Maybe its double topped and im the retail investor typical of a 5th wave or perhaps its basing, if it breaks out of this range we will know. Here is the slight wedge also that we saw in oil and by the looks of things its back to test support after breaking resistance. I believe such breakouts are less powerful if you get a quick retest and you chew on local resistance , so ill be watching this for signs of trouble in equities ( and commods ). Got the last 1/4 of my oil short closed out too , so glad I closed most of that position yesterday. I prefer futures for oil as USO can leave you subject to gaps. For now the euro dollar is inverse to equities still and commodds seem inverse to the dollar. How to use that information is something im still learning about though. One of the guys at the evil speculator just wasnt buying the bull case on the open when the Yen / dollar wasnt confirming.
Wheat
I opened a small position in wheat this morning also but its not looking so hot but is green, like Oil its been beaten down but i figure people need to eat more than drive. Entry at 535 with stop at 540.
How high do we go ?
I suppose its normal ( and what caused such a squeeze ) that everybody initially talks about the double bottom , but before greeting D- sevens latest video ” Markets bounce of support “ at FTV i had started to wonder. I have only held a portion of and SSO open and do expect we go further but I wonder do we bump our head really quickly on this triangle. Id like to see where the pullback get support before going “bull crazy” . Going long long in a counter trend ( bear Market ) rally , well it might already be to late. Its about what happens on the pullback , what support and volume arrives. Do we fakeout ( get out ) of the triangle and spike into the 1000 area to turn down ( there are no gaps to chase up there just crud ).
Ill leave you with a daily on the 10 year T- Bond and this thought…The Asian markets have rallied a total of 2.4% with only two hours of their session left..
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