I can't stress enough the importance of listening to others but forming your own.
One opinion that should be weighted more than anyone else’s is (in my opinion, lol) the markets.
The market’s opinion matters a great deal. If the market is going up it has a bullish opinion, if its going down, a bearish. If it is rotating between price levels it has no opinion; it is in value and is not biased to one side or the other. It’s that simple.
On a short term bases the market is looking more and more bullish providing we trade above 1085.00 Sept S&P.
We can test below, maybe gap lower on Monday but if after the bell, we trade through 85.00 by 3 handles and find “love above” then we will look toward 1102.75 area for yet another retest. We have already been there twice and have been rotating between that level and +/-1040.
Based on the weekly close 1085.00 being higher than last weeks close 1062.25 (June) and the Paper buyers coming in light but steady before and after the parade on Friday, if I had to guess, we will see 1102.75. But again, I wont put my money on that opinion (and its even my own, lol). My money will be in the direction of price soon after the bell come Monday.
On a longer term or intermediate term basis, this is where you have to put on your thinking caps and open your ears to the markets opinion. No one else’s
The market has found value in this range of +/-1102 - +/-1040. It’s found a home, a very comfortable level. It has no opinion. Markets don’t stay range bound for ever. Sooner or later the market will break out of the range and decide if it will seek lower prices to find value or higher prices. You can recognize early telltale signs like if we “find love above” 1085.00 then fail to take out 1102 and trade sharply right back through 1085.00 on a rejection. That says the market wants no part of that area and we will likely not only test the low of +/-1040 but cut right through it since it will be our third trip down there. I would rather see a double bottom than a triple. I favor this scenario as we have been trending down since April and markets tend to work off aggressive initiative trades with sideways action, this is also common in a 4th wave.
We can also just kiss +/-1102.00 good bye and rotate right back down to +/- 1040.
We can also trade right up through and find 1102.00 as support which will send us off to test 1118.00 and probably make higher highs until August. That would put the right amount of market analysts on record with a wrong opinion on a contrary move.
The point is, on a longer term basis, the market has a potential to stay in rotation within this valued area, play it safe, and let the day traders have a little fun or, it can break out and there will be some great profit opportunities for longer time frame traders.
Read the price action and it will clearly tell you what the markets opinion is.
Tim Mack
“It is no use saying, 'We are doing our best.' You have got to succeed in doing what is necessary.” - Winston Churchill
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3 comments:
You mentioned Sept level at one point so do you trade the June contracts or Sept contract? Thanks
Sept became the front month last Thursday.
quick question, can you see who bought what paper and in size? ie, not being on the floor or having friends there? You mentioned goldman bought 1K cars, is there any other place to see this?
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