Pre Market

We traded up overnight to 98.50-97.50 resistance area. If we open below we will probably rotate back toward the Settlement of 90.00 and the Value area high of 89.75. What often happens is that Paper buyers come in off the bell and locals get short. If no other buyers step in the locals will offer the market lower and get all the gap fill traders on their side. This is were trading gets tough and the importance on knowing what the market is doing makes the difference in a winning day or a losing day. Gap fill traders say if we open “X” handles above the settlement then we will go back at least ½ way. There is a trader who call this set up a “burning dog” (sick I know) and uses 4 handles as “X” .

The difference is that if Paper buyers come in aggressively after the open the locals will scratch their shorts and get long with them “going with the flow” leaving all those gap fill traders with a bad day and saving that poor little dog.

Tim Mack