End of the year, people will be looking for the Santa Effect. The best Santa for now is the government speak coming out of Washington. Traders will disagree, but some events do seem to move the market:
- Release of information- earnings, economic data, sentiments, and measures like the Vix.
- Government Speak- an official opens mouth inserts foot; Treasury, Congressional leaders, FED Meetings/FED Chair
Our current friend is the banter over the Fiscal Cliff. Japan is in a recession, Euro Zone leaders seem to be following. Unless the correct measures are taken, we will join them. Spending without income has a finite run and the cliff will make this one look like a bump in the road.
TODAY: more activity as sides posture
B7 began the bull switch and reversed the SB BO, Each return to the SB was a long, as was each move back to the bull TL. Opportunity at the TL and SB, TL and MB, at the TL and the LB.
AFTER HOURS: Government Speak 101
The US House delays Plan B vote until after Christmas. Would be nice to be able to add a flushing sound here. Seller reversed the PA from the BO-5 to the LB. Then the news, and the tick chart went crazy, the 5m ran the range with 1 bar and exit taken (again based on the tick activity).
The one minute showed stalling at the SB and began moving away. A known risk limit (the SB) and the rules: a BO is expected to run a minimum of +5. If the BO does not have a FBO, an extended run of 10-15-20 is likely to develop. A FBO is likely to return to the prior 5-level.
When we get a news expansion bar, the prior 5-level is the stop and moves with the PA. Large single expansion bars are a accumulation of the news, program selling/buying, program exits/covering, and thousands of Trader Joe's who are watching the market.
5M
1M
We can not say when these bars appear. But that does not detract from playing what the market offers.
So, did you trade this profitable?
ReplyDeleteYes. Was in the middle of writing the blog and discussing PA in the chat when the alert hit. Looked at the charts and saw PA breaking the SB. Risk known (the placement for the stop loss), bias short. I think everyone still in chat room got something out of that move.
ReplyDelete