Thursday, 26 January 2012

You Can't Fight the FED

Happy Australia Day All,

This will be just a quick post today. Australia Day is always one of my favourite days of the year and a great time to celebrate with mates and forget about the markets. Trading on Friday should be an interesting one ha!

So last night overseas markets looked very weak initially and pulled back right into support AGAIN. Then Mr Ben waved his wand. Then we went up...a lot. I am not a bitter man and I have always loathed those traders who cry conspiracy or rigged markets. It is what it is and we choose to play this game. Central banks are doing everything to keep this market awash with liquidity. Extending 0 rates until 2014 will certainly help.

Fortunately I covered my short position prior to the announcement but certainly I made a mistake in not pulling the trigger for the long trade out of support. Quite clearly, my bias played a factor in that. I wasnt able to be flexible. The information was there with the S&P500 holding support and then a strong breakout candle, but I didn't process it.

S&P500 Eminis 60mins:

Where does this leave us? I have no idea to be honest as I don't have a setup. Its as simple as that. The market is still right up against res, the breadth is still diverging, momentum is still waning, sentiment is frothy, BUT price doesn't want to go down. The trend remains up. The best way to play this is to keep it real tight and look for small moves in either direction for now. I talked about the Eminis needed to break 1300 for confirmation to get short and they didn't. The Nasdaq futures came off sharply as excepted but equally rallied post the FED announcement.

DOW Industrial Daily:
Coming into the zone. Maybe a bit higher to go? Either way, setting up for a great double top trade and resistance trade. Still looks ominous to me.

NASDAQ 100 Weekly:
I thought this was interesting. This is the move of the 2003 low. A potential big picture A=C comes in at 2465 i.e. right on last nights high.

NASDAQ 100 Daily:
There has been no real consolidation at all and thus why I deem this "breakout" highly susceptible. Any move back below yesterdays low will trigger a short to me. If you want to join a parabolic/vertical move then all yours. I know how they end up.

NASDAQ 100 Futures:
The Apple euphoria quickly got slapped down as I expected. A range has now built.

I will expand on Asia tomorrow.

Have a good one