$ES_F : 1545 - 1525 : Market Recap

Opex Madness - Do not fall in love with the upside (yet)

Trend change confirmed. Trading from bearish bias.

Today was April options expiry and markets reacted in some strange fashion. On one hand a healthy sign for bulls is that

• Weekly trend change is not confirmed and markets managed to close above 1543 even though in the lower half of the weekly range.
• Rally from 50 dma has been propelling markets higher. Each of those two rallies have been impressive and uncorrected before they are sold again. So far these corrective rallies look like making lower highs lower lows strengthening the case for bears.

However the volume on selling legs of the market is improving and any rally is building up protection buying. This is similar to situation which was prevalent in AAPL a while back before the sharp break started down. The current trend is short but it is a young and tender trend, it can be be broken easily if some determined bulls come to the party. I have started trading from the short side with caution. Here is a 5 minute chart of today's day session.

$ES_F : 1545 - 1525 : Expected Day Session Range for EMINI

Trend has turned bearish. Move to 1500-1450 under way.

Selling Rallies

The market is developing a well established rhythm of breaking new lows on high volume followed by low volume recovery. The volatility has increased causing the size of reaction and subsequent falls to increase (which is better for trading perspective as long as proper risk management is employed). Market is being supported by the 50 dma and so far it has acted as good support but I would expect that to be broken in coming days. It appears that a move to 1500 - 1450 area has begun. I will update the comments section as the day develops which can be subscribed for email triggers.

$ES_F : 1555 - 1540 : (Early) Market Recap

Bears are getting strong.

Trend change confirmed. Trading from bearish bias.

Today is an early market recap for me as I have to go out for a lovely dinner but it seems my day trading is already done.

Markets are progressively confirming that the control has been shifted to bears and therefore trading from short side is making sense. I am getting comfortable holding short positions. The volumes are increasing on the selling legs indicating longer term players are taking profit or establishing short positions. New short sellers are also appearing to hold the shake-out attempts well and defending key levels showing the confidence of the markets to go short. I am looking for a move to 1530-1500 initially going all the way to 1450-1400 area. 1593 is marked as important top on my charts and key pivot point to trade from. Here is a 5 minute chart of today's day session.

$ES_F : 1555 - 1540 : Expected Day Session Range for EMINI

Cautiously Bearish. 

Near important top. Volatility Expected

The choppiness near the top is creating a set up of possible pause in the rally. Yesterday was a good follow though day for bears coupled with high volume selling. However support was noted at 50 dma and so far that has provided a good 15 points rally from the low. The markets has so far not rejected the 1538 low. However the line in sand for bears is 1558 and hard stop at 1570. If markets starts rising beyond 1558, bears have once again lost strength. The trend is still on the mixed now with bearish bias and there are several signs indicating a fatigue and I am not planning to take a big position either way. I will update the comments as the day develops.

$ES_F : 1565 - 1545 : Market Recap

Finally a success for a bears.

Important top formed at 1593. Trend change in making.

After a feeble low volume attempt to shake new shorts, the market could not entice new buyers and finally we have a good confirmed short set-up immediately in the vicinity of a top. The following are supporting the top formation and possible trend change.

• The rally from 1533 to 1593 was a straight line up move, followed by equally strong move in opposite direction with increasing volume. These capitulation tops mark important turning points for the markets. 
• The short set-up has held on the move down and bears have shown a follow through.
• The macro economic climates has been screaming for a correction/pause in stock market rally for a long time. Any other indicators (bonds, metals, china, emerging markets) have not been supportive of the rally.

If the current move has strength, the first target would be 1500 - 1450 area. And if the bears have legs, a trend change on longer term time frame could develop requiring a new analysis. Here is a 5 minute chart of today's day session.

$ES_F : 1565 - 1545 : Expected Day Session Range for EMINI

Cautiously Bearish. 

Today is the follow up day for bears to take the market down.

The choppiness near the top is creating a set up of possible pause in the rally. Yesterday I was expecting S&P to remain below 1565 to keep the short side trade intact but instead it moved up. In pre markets session today, it is trading around 1557 giving up most of yesterday gain and leaving a nearly 10 points gap down, yesterday market had a gap up which was never filled. These sort of situations demand caution. The trend is still on the bullish side but there are several signs indicating a fatigue and I am not planning to take a big position either way. I will update the comments as the day develops.
 

$ES_F : : Market Recap

No Cigar for Bears (once again)

Market Seems to have rejected first attempt down.

I return from a nearly 3.5 weeks holiday and I find things the same. Markets are strong and rejecting any attempts by bears. S&P made new all time high ensuring all major US indices (DJI, RUT and SPX) have made new all time highs and it seems now even Gold bulls have thrown in the towel and embraced stocks.

Until something changes it is fair to assume that trend is favouring long side. Here is 5 minute chart of today's day session:

$ES_F : 1542-1552 : Market Recap

Bears are back in town.

Flip Flop continues. Caution required.

Finally it appears the markets are catching up with the reality in rest of the word. The Cyprus situation is escalating and I cringe just to watch it on TV. No credit cards, no electronic transactions, cash only deals, withdrawal limit on ATMs, banks closed till next week. This is not the environment for bull market highs. The bullish set-up is once again broken and market continued its flip flop move. My experience tells me that this is start of key moments for markets because such flip flop shows markets is struggling to find a direction and it usually marks a trend change. If I am reading right, move towards 1500 has started. Here is the 5 minute chart of today's day session....

$ES_F : 1552 - 1542 : Expected Day Session Range for EMINI

Cautiously Bearish. 

Cyprus is not fully priced in I feel.

The news from Cyprus is not improving. Today ECB threatened to pull liquidity by 25th March thereby putting a firm deadline for the Cyprus to act. In return Cyprus govt postponed vote on the plan B and announced that deposit levy is not in consideration. Russia is now playing in EU politics and I would not be surprised if this results into some new conflict as well. Germany and Russia are not the best of friends after all. The Cyprus defiance is prompting Greece to rebel against the bailout terms. British savers are fretting about their savings. The banks in Cyprus have not opened for a week now. Merchants are refusing credit card payments. Cash is running short. RAF plane is in Cyprus with cash for British personnel. We have not seen such events in a long time. We can put all our trust in politicians to resolve the issues and keep buying with both hands OR we can take stock of the situation and exercise caution. May be EU will relent and renegotiate and send a bundle of cash for bail-out without demanding bail-in. May be Russia will step up to the plate and bail out an old friend in return for military and gas exploration rights. May be AAPL will buy Cyprus island with all the excess cash sitting on its books. Who knows. May be Cyprus will leave Euro all together and go in the arms of Russia. Market is paying no attention to this event so far and going up in stride. Is this a bull trap? Is this a sign of strength of the market? I do not know. All I can see is that markets are bullish and short set-up is again broken. However I am really cautious on long side today until weekend. I will keep a keen eye on news from Europe until the mess is resolved.

$ES_F : 1544-1557 : Market Recap

Business as usual - grinding high.

Short set-up broken again. 

These markets are strong. Overcoming any thing thrown in its path. Breaking any short set-up before they are even fully developed. For how long. Out side the fed protected world a lot of crazy things are happening. In a tiny island the banks have not opened since 15th March and are not going to open at least until 26th March. That is nearly 10 days of bank closure.  These are not normal times. We might hide our head in sand and think a tiny island does not matter but a big dangerous game of geo political poker has been put into play and in which everyone is going to lose. The worlds is changing. I feel it in the water, I feel it in the earth, I smell it it in the air. The set-up remains bullish but my caution level are at extreme high. Today Fed came out with continuation of QE. The market reaction however seems to indicated the the high induced by FOMC promises of unlimited QE is progressively getting weaker. Here is the 5 minute chart of today's day session trading.

$ES_F : 1544 - 1557 : Expected Day Session Range for EMINI

Cyprus Fears seems to be discounted in pre-market.

However caution is required until the dust settled.

Cyprus parliament has rejected the deposit levy leaving the crisis in limbo. No one knows when their banks will open and what will happen when they do indeed open. May be EU will relent and renegotiate and send a bundle of cash for bail-out without demanding bail-in. May be Russia will step up to the plate and bail out an old friend in return for military and gas exploration rights. May be Cyprus will leave Euro all together and go in the arms of Russia. And in all these uncertainties the markets are enjoying, completely reversing the fall yesterday. Is this a bull trap? Is this a sign of strength of the market? I do not know. All I can see is that markets are bullish and short set-up is again broken. I will keep a keen eye on news from Europe until the mess is resolved. There is FOMC announcement today which is not likely to cause much unless Bernanke starts talking about reducing liquidity.

$ES_F : 1544-1556 : Market Recap

Cyprus problem is not a small problem.

Short Set-Up held and markets looking weak.

The worlds is changing. I feel it in the water, I feel it in the earth, I smell it it in the air. I was suspicious of the market price action yesterday to the bad news from Cyprus and wrote this reply to a bullish tweet on twitter.  The problem which started at the tiny island of Cyprus is deteriorating. The banks are closed until Thursday 21st March 2013. They cannot open banks without passing the bail-out bill or else it will result in tremendous bank run and will collapse the banking system in Cyprus and along with that in Europe. The government is not able to pass the bail-out bill which imposes punitive raid on bank deposits. There are rumours that Finance Minister has offered to resign as if that is going to help the situation. UK is sending a plane full of cash to Cyprus to assist British personnel in case the banking system is not operational. These are the kind of news which cannot be brushed away. Coupled with the fact that we are near the resistance levels in markets, it is ripe for a decent pull-back or correction. And whatever the politicians say, grabbing bank deposits sets a very bad precedent. Once a vampire tastes blood ..... Here is the 5 minute chart of today's day session trading.

$ES_F : 1544 - 1556 : Expected Day Session Range for EMINI

Possible attempt at all time high likely.

1540 is key level for bulls to defend.

I have not been able to trade much of last week due to my other business commitments but as I can see, markets have been range bound progressively grinding higher. My chart still had 1552 - 1542 marked and I see we are still trading around there.

A few things stand out. Markets have made a new high after another new highs and grinding higher. All attempts by sellers fizzle out within 1 - 2 hours of trading and then the grind upward starts. Even bad news like Cyprus have no impact on the tone of the market and markets are making smart recovery. But I feel a lot of protection buying is going on at these levels and it is visible from the action in VIX. I am also buying protection 2 - 3 years out at 1000-800 level. A cheap insurance sort of for a calamity event.

$ES_F : Market Recap

A pause in rally

Expiry weekend choppiness

I was not trading today hence it will be a short update. I was bullish at the start of the day and market did make a new bull market high at 1551.75 in overnight markets. After opening neutral, markets attempted to rally but met resistance near highs and dropped without any pause until 1543. I had overnight position for which I had set stop at overnight session low. That was closed finally at 1546.50 and now I do not have any open position. After hitting the lows of 1541.75, markets were two sided and balanced and closed near VWAP. This is the first time in many days markets have closed red and there is likely to be a follow-up tomorrow and possible test of 1539-36 support zone before it can be determined what directions market are taking for the expiry.

I flattened my stock portfolio. Added F/DFS long and BIDU/RHT/AKAM short and balancing hedge on SPY.

$ES_F : 1542 - 1552 : Market Recap

Another new high - a slow certain march to all time high.

Trend remains bullish.

Market started the expiration week on front foot. The Clock change in US allowed trading to start and finish 1 hour earlier for me. Enjoyable time until end of the month. Here is 5 minute chart of today's day session.

I came in the day bullish as per this trade plan. Overnight markets were neutral. After opening slightly down on low volume markets immediately dropped to expected support zone and breached it by a tick, giving only one fill (first green arrow). The reaction was strong and hence I did not cover at gap fill. Market continued to keep the pattern of higher highs and higher lows and soon created new bull market high. It seemed to stall there for a while and decided to take profit at 1547 (second red arrow). In hindsight it was early. The comments section of the trade plan describes the trades.

$ES_F : 1542-1552 : Expected Day Session Range for EMINI

Possible attempt at all time high likely.

1535 key support level to watch.

Hope my friends in US are enjoying the clock change and not finding it all confusing. Markets still retain that bullish stance and with no news expected today, I would expect markets to play by the same hymn sheet and grind higher. This week is options expiry week so may be the touch to all time high is likely to happen by Wednesday/Thursday.

Today again I would expect to find support at 1542-39 area and resistance in 1551-53 area. I would be looking to see the reaction in the trading range before taking a trade. Market is looking to end on a bullish note.

In my hypothetical stock portfolio I will be reviewing various stocks from weekly close basis.

The trend is still bullish and calling tops is futile. However please have a look at this post from longer term perspective which is keeping me cautious at these levels. 

$ES_F : 1541 - 1551 : Market Recap

Employment numbers surprise on the upside.

New high for current bull market. Trend remains bullish.

After a consolidation day yesterday, today was bit different and saw nice two way energy and confirmed the bullish set-up once again. Here is 5 minute chart of today's day session.

I came in the day bullish as per this trade plan. Overnight the markets were bullish and looking to open strong after employment numbers surprised on the positive side.  After opening strongly gap up on good volume, however the market mood changed immediately after first 5 minute of trade and market quickly dropped into expected 1541-1538 support zone and further down. This move down was sharp and sudden and without any rally in between so it seemed like (without the benefit of hindsight) that it could very well be rejection of the day session high. I was filled on all my levels shown by green arrows.With that set-up I came in the "alert" mode and was looking to exit most of my positions near the day session mid and a move to VWAP. I got the first opportunity when the markets traded near the day session mid (fifth red arrow) and I exiting 75% of my position leaving the stops on rest on day session low. At this time a minor short set-up was also in play. However after hesitating a little near the day session mid point and VWAP shown by grey oval, markets broke higher and the minor short set-up was rejected. This allowed me to move stops to my remaining position to break even. Since I bought the position near the day session low, I am planning to keep it overnight with break even stops and manage it as a swing trade. Markets continued to grind higher rest of the day on low volumes and appear to be closing near highs. The comments section of the trade plan describes the trades.

$ES_F : 1541-1551 : Expected Day Session Range for EMINI

June Future is front month today.

Unemployment numbers give new boost to the bulls.

I will be referring to June future from today which became front month yesterday and volumes rolled to that contract. I also had to go for an event last night so there was no market recap but my trades are commented in the trade plan or in the HomeWork page. Unemployment numbers were a positive surprise for the markets and promptly crushed Gold and lifted stocks. I would expect this to be the theme of the day.

Today I would expect to find support at 1541-38 area and resistance in 1549-51 area. I would be looking to see the reaction in the trading range before taking a trade. Market is looking to end on a bullish note.

In my hypothetical stock portfolio I will be reviewing various stocks from weekly close basis (that would be weekend work) and to balance the short position with some new longs at good levels. Recently I added MSFT and TOL and would look to complete those positions if possible.

The trend is still bullish and calling tops is futile. However please have a look at this post from longer term perspective which is keeping me cautious at these levels. 

$ES_F : 1530 - 1542 : Expected Day Session Range for EMINI

Forget bulls and bear. What has gone wrong with lions?

Cautiously Bearish today.

What is wrong with the lions and why are they coming after women? Recently one has managed to spoil the climax for a couple and other has managed to devour an intern. In other news, ECB and BOE left the rates unchanged and BOJ did not do more than what they are already doing. China made some noises on currency wars and dumping the garbage in the neighbours yard with wink and nudges directed at Japan. Markets are looking bit balanced today and may trade in a range and choppy before taking next move. Current tight range of 1536-1544 seems to be holding up the energy of the up move. I have a feeling we can see a peek below this range today to shake out some recent bulls. 

Today I would expect to find support at 1533-30 area and resistance in 1541-1542 area. I would be looking to see the reaction in the trading range before taking a trade. Overall I expect today to be a day of consolidation. May be I will look at various other markets or look for longer term swing opportunities. I will update the comments section as and when a trade set-up is holding.

In my hypothetical stock portfolio I am looking to balance the short position with some new longs at good levels. Recently I added MSFT and TOL and would look to complete those positions if possible.

The riding trend is still bullish and days like yesterday or today are simply consolidation in the a major trend. There is no good short set-up in play so far.

$ES_F : 1539-1551 : Market Recap

Consolidation day with bullish bias.

Another new high for bull market.

Today was a day of consolidation with markets maintaining their bullish bias. Here is 5 minute chart of today's day session.

I came in the day bullish as per this trade plan. Overnight the markets were bullish and looking to open strong. After opening strongly gap up on good volume, the initial move to gap fill was rejected and I went long at 1543 (first green arrow) thinking that my entries will not be filled. Market proceeded to make a new high but immediately started giving up the gains. I took my second long at 1540.25 (second green arrow) after market missed my support zone of 1439 by 1 tick and I got my final fill at 1438 third green arrow. Market started its slow grind up after this point after hesitating near VWAP for a short while it shot up to close to day session high. I exited my bulk of position at 1544 forth red arrow and the final position at 1439.5 fifth red arrow after markets failed to close near highs. The comments section of the trade plan describe those trades.  Today was a balanced day overall.