Got Long

I covered my short at the close and also got long for an overnight trade.  The market seems determined to squeeze as many shorts as possible.  I was surprised at the lack of intraday weakness during the 2nd half of the day.  It doesn't look like this market wants to selloff quite yet.  Monday happens to be the first day of the month, and usually that is bullish for the market.  I usually don't like to play seasonality, but it is in the bulls' favor on Monday. 

The only problem with being long here is that the economic data and European news has been a negative and will eventually weigh on this market.  If not now, sometime later. 

Intraday Short

I played a quick trade on the long side and have now started a small short position anticipating 2nd half weakness on the day.  I will give it room to go higher so I can add short at higher prices.  I would be surprised if we kep blasting higher, but the action seems range bound to me so I see the chance of a late day breakout as low. 

Yesterday Was A Rarity

I have rarely seen such a late intraday reversal, especially when the market was not that oversold.  It does happen when the market gets stretched to the downside over several days, but the previous day was up 1%.  It was another piece of price action that tells me the trading is getting more shark-infested. 

But usually the day after such reversals tend to have a high probability pattern which I will play today.  Usually, you get follow through momentum in the 1st half of the day, which fades in the 2nd half and closes weak.  I will be looking to buy early weakness down to 1097-1098 area, and will be selling 1st half strength to around 1108-1109.

Monster Short Squeeze

We are only trading down 2 points from yesterday's close as I write.  All we did was add a bunch of squeezed bears and shaken out bulls to the equation.  The equity put call ratios are running very high despite this intraday run up.  That tells me a lot of retail money is fighting this intraday up move.  This is a sick market to trade.  There is no rhyme or reason for some of the moves, every downmove seems like an overreaction because we go right back up.  I think we need to go higher before its safe to short.

Right now, the bad economic news is only adding more shorts to the equation, and that leads to these parabolic short squeezes out of the blue like we had this afternoon.  As for tomorrow, I have no idea whether we gap up or down, after such a big run up, I would say a gap down but this market has been unpredictable for me lately.  I am not a buyer or a seller here.

Shorting Environment

The market feels like there are too many people looking for a flush down lower.  The market feels like its filled with a bunch of shorts waiting for Greece to offer them a gift.  I tried a daytrade and quickly got run over.  The short side is too crowded right now.  The action is unusual, these kind of random parabolic pops out of nowhere are hard to game.  

Quick Daytrade

I think we will be weak for the remainder of the session, I have just gotten short and will cover in the final hour.  I will also likely be taking a long position for the overnight session.  I don't think we'll go below 1080 so I want to be on the long side rather than the short side when taking longer term positions.

Great Buying Opportunity

Today is going to set up to be a beautiful buying opportunity with continued weakness to the close down to around 1080.  I still believe we'll get back to 1111 and probably to 1130 after that in the next few weeks.  I will be setting up for that next rally. 

Big Gap Down

Worries about a Greece downgrade and general weakness in Asia and the bad jobless claims numbers have us gapping down big.  I am slightly bullish, but I didn't expect this big a gap down.  Its possible that we could selloff for much of the day, but I see it as more likely that we have another day staying within the range.  I am not too confident about my long position though. 

I do think if we do selloff today, it will be a great buying opportunity, so if I do sell, it will be just to buy at lower prices.

Bullish About Overnight

I will be staying long and holding overnight.  I believe we will gap up based on two reasons.  No one wants to be short ahead of another Bernanke lovefest/ longs want to jump ahead of the possible lovefest tomorrow, and the European markets are oversold.  I would not be surprised if we hit 1111 early tomorrow. 

Banana Ben Never Disappoints

He is a dove's dove.  A helicopter's helicopter.  A banana republic's banana.  I think he will never raise interest rates as long as the S&P is below 1200.  I don't know what shorts were thinking he was going to say to crash the market. 

We are stuck in a range.  We've got upside to 1111, and downside to 1091.  If we get a bit more rally today, I will be dumping my longs.  Too much too fast.  I am now thinking that we will close lower than current levels, but may squeeze a bit higher during lunch.  I still think playing long is safer than going short. 

Like the Other Dips

I think the selloff yesterday was just like the dips that we got after getting overbought in November and December.  The market would go down 1 or 2 days and that would be it.  Traders would get a bit nervous during those 2 days, and then the market would go straight back up.  I expect the same to happen this time.  Until I see more signs of weakness or a rally to 1130, I will shy away from the short side except for quick daytrades.  The easy money still seems to be on the long side.  I expect the 2nd half of the day to be strong today.

Turning Bullish

It is simply amazing to me what 1 down day will do to investor perceptions of the market.  Consumer confidence data came in bad, and now everyone is worried about the consumer.  There are a lot of nervous longs, but I think after today, many will have been shaken out. 

I have initiated a long position and expect us to be higher than these levels by Thursday.  I will be adding on weakness today and tomorrow. 

Bottom of the Range

I don't see much more downside for the rest of the week.  We are near the bottom of the range, and I see us creeping higher starting from tomorrow.  We are in a trading range, from 1093 to 1111 on the ES and it should keep the action contained for this week.  Next week will determine whether we go to a higher trading range or a lower one.  Based on this week's action, I will pick a side.  I am leaning long though. 

Europe is Weak

The market is clearly much weaker in Europe, and that is what is dragging down the ES.  I don't see much weakness in the US market.  It is those jitters again about Greece.  Its a good excuse to selloff and eliminate the overbought condition.  Greece is having a bond offering and it is sell first and ask questions later in Europe. 
I think we'll have a mild selloff today, but I am not very confident on that.  I will be watching and waiting for a better short entry. 

Inside Day

Volatility is shrinking and we got a narrow range intraday.  This seems to be more bullish than bearish.  The market is not letting longs in unless they pay up above 1100.  I don't want to press it on the short side yet, it seems like there is an underlying bid just like 2009.  Maybe a bit weaker than last year, but its still there.