Monday, October 25, 2010

S&P Futures: Daily Wrap for October 25, 2010

In my week in review I stated that my position was "slightly bullish due to the triangle breakout following the period of low volatility (see 20-min. chart).  Absence of any 5 waves down from 1186.25, I must favor the upside". After an inspiring positive open the market fizzled into the close. I have repeatedly mentioned that the greater risk in the market at this point was taking the bullish side of the trade. Since 10/13/2010, the ES-F have netted +8.50 points against deteriorating internals. Whether you're trading for points or ticks, you can see how dangerous trading this market has become. The market continues to make higher highs in 3 wave patterns. One would conclude that this is a final diagonal pattern but the chart doesn't count well. It's possible that w.2 ended today, yet every rise has been followed by 3 wave declines. Until I have confirmation of 5 waves down from a peak.... I'll sit on my hands. As soon as I can identify that a top is in place, I'll show a detailed chart.

Here's the current market position for the E-mini's:


Momentum: Remains OB on weekly. Daily time frame has made a bullish momentum reversal. 60 min chart has made a bearish reversal.


Pattern: final wave.v of wave.c of wave.(2)


Time: The previous time relationships were negated.

Trade Strategy: Flat.

Best of Trading

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