Rejection suddenly is not so bad

I remember this super hot girl I knew when I was a kid. I did everything I could to win her heart. It was worth the effort because she was just sooo cute. Now I wasn’t a bad looking kid either, I had money in my pocket, a nice ride, and was pretty good at getting the girls But there was nothing I could do to impress her. It got so frustrating that I probably lost my cool at some point and started to be a nag. Finally one day she couldn’t take it anymore and told me flat out to “get lost”. I was crushed and it was the first time I really knew rejection.

Fortunately traders can take a crappy situation and make something useful out of it. I have now learned not only to accept rejection but now I look for it!

Most notable out off all the price action was the low that was put in at 1292.50. This low was made after “1 ticking” the globex low of 1293.50.

Now before all you brainiac engineers out there who read every technical analysis book known to man and can find documented evidence that a “tick” is ¼ of a point and therefore a “1 tick” is 1293.25 and anything more can not meet the “1 tick definition” and thus the 1292.50 is range extension and bla bla bla bla , hate mail, more bla bla bla….

I tell you; “Stick to building bridges”…price is the reflective action of the “madness of crowds”. Want a real live example of the precise action of a madding crowds take a peek at the Middle East, just pick a country, any country will do. There is nothing precise about chaos.

Traders are crowds with opposite opinions, bulls bears and undecided waiting to join a side.

What happened was that price reacted sharply to a test of this low. Because of the sharp reaction better called, “rejection”, there was plenty of excuses that the action was a rally off the rumor that Gadhafi was shot and/ or the Saudi’s where increasing CL production.

I also had a price line there which was drawn because of the flat line price action of January 26 and 27. This was an unusual flat line and once price rallied above it, it became support (on February 3).

When you have an area where price stops rising, breaks and becomes support, it’s a noteworthy area. It doesn’t have to happen in this exact order (unless you are an engineer). It simply has to be an area where you notice that A LOT of traders were making decisions around this area both long and short. Its simply resistance becoming support. It doesn’t happen all the time but when it does its best to note it on your charts.

What was the real reason this 1292.50 was support? Who cares? Not me. All I care is that there were no sellers here and only buyers. That’s what caused price to rally 16 handles almost straight up.

Its also interesting that there was NO paper buying the rally and I mean NONE! The rally was all electronic traders. Did big paper just not see a reason to be buyers here or ….. what?. I shudder to think…..

Friday, JP Morgan found a reason to be a buyer buying about 1,000 times all day, not huge- but notable. I also didn’t think any traders wanted to be long going into the weekend and expected a bit of an afternoon sell off. So in the end we should see higher prices going into the new month providing we can get over the next “support becomes resistance” area of 1322.25 which is also the wiggle room of the previous days high.


(All the engineers reading this just got a cold chill reading “wiggle room”.)

I would feel better about continued further up side if the spike low had followed a high Arms. The highest daily Arms reading was only 1.58, that certainly doesn’t say a bottom is in.

I am seeing ATRs expand and if the VIX can just stay over 20 we might just get into to some great trading instead of the ‘ol script, early rally….flat line mid day and the occasional late day break.

A break of 1292.50 and I might just get what I wish for…….


Tim Mack




“Do not waste yourself in rejection; do not bark against the bad, but chant the beauty of the good” - Ralph Waldo Emerson