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Wednesday, December 22, 2010

Nearing an end?

SPX made a HH and HL  and SPX closed in the plus column that is positive   Range was only 4.45 points.  It gapped open up and topped out at 9.30 and then lost 50% of the day's low to high by 11.00 Then it rallied little erratically to close very close to the high.  This is bullish for SPX.  RUT had a totally different story.  It opened .05 lower It made low of the day a little before 8 and high of the day around 9.30.  May be there was a buy program that ended at 9.30 for both RUT and SPX. It RUT then lost all of its gain by 11 and rallied only 50% range and close almost even.  But then RUT had a lot of resistance to deal with around 790.  The range was less than 4 points.  It was very tough day to make a good trade.

The chart on the left is FAS hourly.  Banks had a great day today.  FAS has made a new trading high.  It is above the median line and looks like it wants to go to the top line of the channel around $30.  Is it going to make it there or could something stop it?  That would be FAZ on right.  The reconstructed channel is giving a high probability of a bounce about to happen from the bottom of the channel.  Some of this is pure Santa rally to re balance the portfolio as interest rate instruments are dumped and equities are bought.  If I couple that with what happened between 8 and 9.30 in RUT and SPX  I have to conclude there was some big  guy buying that went on today.  
This market is not too far from a top. May (BIG) be 20-30 points from where it is.  IMO It is too late to buy and too early to short.  This too will end and give a clean nice short.  There is no need to rush.  I will just wait it out.  Before jumping in anticipation.  I have short that I will I unwind.  I shorted TNA because the odds are 18% that RUT will be up 6th day given that it is already up 5 days in a row.
 My next blog will be on Sunday night.  I am not going to initiate a new trade tomorrow.
Thanks for reading my blog and offering encouragement

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