I hate doing this without really clear evidence. I have that on the 1 min 3C, the 5/10 min are mixed, the 15 is positive.
Bernanke is the big deal tomorrow. I always assume that what he's going to say for the most part has already been leaked to the market.
Today we saw the retail gap up and a slow, steady descending channel down right through Dow 10,000. The way the channel moved down slow and steady leads me to believe it's the work of market makers just adjusting the bid and ask all day to bring prices down, right until they cracked Dow 10,000. At that point volume picked up for two reasons, any longs most probably put their stop at that level-it also correlated with a support line in the SPY/S&P. Once broken longs stop out, shorts dive in. I would think if I were institutional money and what Bernanke was going to say was going to move the market down, I would want to keep prices elevated all day and short into them. The fact they moved prices down and 3C moved up, suggests they were accumulating today and drawing shorts into the market. This is the Judo concept.
So don't take this as the gospel and don't send hate mail if I'm wrong, it's my working hypothesis and it's the most likely course that I see right now. As the market moves off Dow 10,000 higher, the shorts are squeezed, they cover adding to demand which=rising prices.
That's my take. You have to decide whether it sounds whacky or plausible and what you'll do about it. Remember-CASH IS a position.
5 years ago
7 comments:
What are the daily and hourly 3c's doing?
They for the most part, each has individual charecteristics, but pretty much the daily is in line with the bearish price action and quit a few of the hourly charts support the view of a bounce. It's interesting it's made it all the way to that level, again which is in line with the idea of a scare bounce. The 1 minute though were the show stopper, almost everyone in a new high or close to it, positive divergence. I think the shorts were drawn into a trap today. Oil had a nice day as well. In either case, if it's bad for the market your core short positions should do well, if it's good for the market any bounce positions will be extra cash and set up even better shorts.
THIS comment makes the MOST sense. CHARTS don't lie!
"The fact they moved prices DOWN and 3C moved UP suggests they were accumulating today and drawing shorts into the market."
That's my feeling MEEEEE. They also kept raking the Dow, as soon as a position/stop was entered they went back and forth above and below 10k-good day to be a market maker. They kept the DOW at a level to keep the shorts in place, so if Bernanke says anything that the market rallies off of (and remember, anything out of the Fed is typically reversed in a few days), then the shorts burn as rocket fuel. Either way, if you have been establishing position trade shorts and the market goes down, you win, if you have some bounce trades on and it bounces, you make extra cash, you get excellent positioning on short trades of which I have hundreds and then you make the downside money as well. If you followed the main strategies, kept the bounce in perspective and used risk management, you really can't lose unless you think the market is going bull from here.
Hi Brandt,
So, probability wise, you think that the market tomorrow will go higher from todays closing level based on Bernakes statement? The smart money has accumulated while squeezing longs and setting a bear trap today?
The only think that i can think of that Bernake could possibly say to give the markets at jolt upwards is if he is going to print more fresh dollars to give to wall street (i.e. quantitive easing part II). The $dollar would then go through the floor and anything priced in US dollars, equities, oil, other commodities etc, will get the much talked about bounce.
Is this pretty much your thoughts? After all, what else can the FED do? They've ran out of bullets so to speak?
Not sure what Bernanke can say, I've documented plenty of Fed leaks though-the Senate hearing was the most recent I believe. Whatever he says, if they rigged the market, it doesn't have to even be anything effective if there is anything effective even left. I think traders would be happy just to hear his Doctor say his blood pressure is up since the last meeting. Anything that shows that he's taking this seriously and that makes traders feel like he's on the job. the last meeting left the impression of a white flag. I'm guessing the MExican stock market ordeal brought the market lower then they wanted, if this is a scare bounce they need to break some levels that will drive the longer term shorts out, if they let the market fall too low, they may have felt they wouldn't have been able to reach that "X" number they are shooting for. If they felt this was going to be a bust, then I think they would have let the opening gap continue up and we'd see 3C go down, the opposite happened.
Well, reading into what 3C has been suggesting recently, the markets and commodities are all due a good bounce. The only thing i can think of to do this with all the bad news around is for the $dollar to take a hard hit, and the only way i can see this happening is for Bernanke to commit to or mention the potential of quantitive easing part II.
That's what all the piece of the 3C puzzle say to me. Why else would there be accumulation by the smart money unless the outcome of Bernankes statement is not already known? What are the odds of 3C calling the recent accumulation wrong?
Precious metals, priced in $dollars, have also done very well recently.
Can we have an update on the oil long as well please Brandt when you have chance?
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