At 7:48 ET, the ES is ticking down –3.75 points. The overnight range is 1086-1092. While the market is ticking down a little after yesterday’s big run, it seems difficult to imagine a significant pullback today after such a powerful trend day yesterday. The $TRIN was pinned under 0.4 most of the day meaning that advancers were outpacing decliners significantly and that the volume for the advancers was much greater than the volume for the decliners.
Two things did make yesterday’s rally look a little fake. First, $TICK never moved over 1000. On a powerful move up, you would expect $TICK to get up into the +1500 range for periods of time. Second, volume was low yesterday.
I can tell you that bears are somewhat trapped in the immediate term. Bears waiting for a dip to cover on Friday and Monday never got it. The market just kept trending higher the entire day. So even if we get a little pullback today, I would suspect some traders with bearish positions might use that opportunity to cover. On the long side, if there is any kind of long side catalyst, a lot of stops could be triggered sending the market even higher.
The monthly charts can really help smooth out noise. This is a QQQQ chart. But SPY is showing the same thing. We’re right back at the October high. If the market is topping and rolling over, resistance needs to hold.
I am currently trading my script from Sunday although my current positioning is unfortunately likely a little bit early and not quite in sync with my forecast. I’m currently short, but I think there is a little more upside left in the market as USD approaches support. Sometimes your honest assessment of the market doesn’t jive with your portfolio. This happens to me sometimes on Sundays as I prepare for the week ahead and causes me to frown a bit when I come to the realization that my ship if off course.
I’ll be hunting for ideas throughout the day.
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stephenberry
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chartsandcoffee
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stephenberry
