Sunday, August 21, 2011

ES downward channel back in play

For newbies, ES is the Futures Contract for the S&P 500 index.    It is high leverage, and it trades on Sunday, which can be useful.   It also trades at night during the week, almost 24/6.    That can allow enabled traders to react to news.    The big drop Thursday night was exactly caused by the Japan Earthquake, which was possibly caused by Comet Honda (ironic name).  The continuous trade can help prevent a "gap your face off" event, but there are also shenanigans played on late night low volume futures, they run stops, and a small amount of money can cause big changes.    Something  like 80% of the ramp up from 666 was caused by ramping of futures, and most of it on Sunday.   No joke.

It sure looks like this old channel is back in play.  And the big 50% Fib could be acting as a "Crash Cushion" TM.   This is the 50% from the all time high to the Paulson low 666.

Euro opens trade in 13 minutes.  See prior post, we expect a big move up on the dollar USD. 

If we start getting some mass media rosy news, take that as deception.

1 comment:

  1. I've been patiently waiting for the buck to bottom out and then take off like a rocket since March or so. I'm still waiting, so I hope you're right about the imminent move.

    One comment about the next post with the commentary from John...I think he's confusing a couple of things. Gold isn't going to the moon because it's a safe haven vs. stocks, although that is partially true. It's just being traded like mad and everyone and their brother is jumping in to make easy money, which is what happens during parabolas. If we're in a bear market that will stretch into 2016, I doubt very much that gold will continue to go up as stocks go down. A bear of that duration and the economic collapse it implies means that all asset classes will be smashed. Every safe haven that people think will protect them will be crushed; there will simply be no safe haven by the end of it. That's simply a feature of the overall event.

    So gold will top much sooner than that, imo, if we are indeed headed into dark economic times of that degree. Guess we'll find out soon enough. Me, I've always thought gold bugs were idiots, long term (John not included, he's just commenting on the market, not a true believer that I can see). The idea that a piece of shiny metal with no practical uses will somehow be the currency of the apocalypse strikes me as kind of naive, and exactly the kind of thing our hard-wired brains would come up with. That is, gold has always had value so it will always have value. This is the neural program we humans carry in our heads that continuously gets us into trouble. 

    Just remember, real estate is your best investment because house prices only appreciate over time. *cough*


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