2013-01-31

$ES_F : 1498-88 : Market Recap


Finally a pause in the rally.

Short set-up holding but barely Showing strength of this rally.


I came in the day bearish as per this trade plan. After a lower settle yesterday the markets were trading decidedly lower in the overnight sessions and the set-up before open was looking bearish. Volume was on a bit better but still sluggish, I would have expected a lot more given the month end activity. May be it will pick up near the close. VIX is now above 14 handle however the market reaction is bit muted to that. Market opened and headed to gap fill which gave short entry in the anticipated resistance area of 1498-1500 eventually making a high of 1500. Subsequent break confirmed that the short set-up is holding allowing 50% profit to be taken and stops moved to then high of day 1500 as mentioned in this comment.


As I write this post the remaining position stopped break even since I moved the stop to 1498 (from 1500 GRRR). If the market manages to close near 1490 area the short set-up remain in play however the market appears balance which could mean shorts would lose the battle again.

So what do I see now? Markets are showing balanced outlook and a break above 1502 is likely to make an attempt at 1520 area which should terminate this bullish move. I was expecting yesterday's short set-up to hold but once again the Short set-up is not confirmed and minor long set-ups and a measured move long set-up are still in play. The close today would be important in terms of determining state of the trend. Close above 1500 would be bullish. Near 1490 would be bearish and in between would leave it choppy.

Day session range was 8 pt and overall range has been 9 which is out of line with VIX so range would need to increase or VIX would fall.