2013-02-15

$ES_F : 1515-1525: Expected Day Session Range for EMINI


Cautiously bullish on this volume less holiday weekend trade.

Options Expiry today expecting choppy day.


It is a Friday and it seems there is so much agenda for the day and weekend. At 19:25 GMT we are going to get the closest visit from a heavenly body of the size of a swimming pool, I do hope it does not come too close or I would not have time to write up the Market Recap :-). Before that in preparation another not so friendly visitor shattered some windows and injured on-lookers in Russian Ural mountains. It appears the heavens are making up for the excitement lacking in the volume less slowly grinding markets. Overnight Icahn beat up Ackman with a 13D disclosure that he is going to steal the lunch money from a playground cry baby and that shot HLF up to crazy heights in after hours trade. This well orchestrated short squeeze is going to be painful as nearly 34 mln shares - a good part of free float - are short. The problem would be if the stock lenders start calling in loaned stock in light of possible tender offer - a threat Icahn made explicitly and Ackman dared him on. Any one remember what happened at VW in Europe when Porsche announced similar stake and accompanied short squeeze?

Coming back to our boring S&P500 on options expiry day ahead of holiday weekend, it seems clear that not much is going to happen today. Overnight the markets looked direction less, trading within previous day range. On economic announcement front there is not much action today. Today I would expect support in 1516-1514 area. I will update the comments section as the day develops.


Today my initial bet would be to find support in 1516-1514 area leading to a build up to new highs in 1525 region. I would expect the highs of the day in 1524-25 area expecting a narrow 8-10 point range. I am cautious on the bullish side today given the lack of volume and flirtation with resistance zone. Any sign of weakness can spoil the party.

In my hypothetical stock portfolio I did take profits on HLF on 50% of the position leaving the other position with break even stop loss. I am a trader, I am not interested in seeing the fight all the way. Let Icahn and Ackman fight it out till one is down - usually passers by get all the entertainment in play ground fights. Please comment and discuss your views and suggest any additions there. During weekend I will review some key stocks from the point of view of taking positions. If you would like me to review a stock please put in as comment.

If market starts breaching 1508 I would need to reject the bullish case temporarily and expect further move down.