Thursday, July 14, 2011
Overnight Volatility
The pattern the last 2 days has been to kill the ES during overnight hours and then reverse them hard at the beginning of European trading. It happened again today. And we went on to rally into the middle of the day and then close weak. We've consolidated enough between 1310 to 1320. The bears were tested yesterday with that QE3 rally but they passed. Now it is time for the market to test the bulls during US hours. So I am expecting intraday weakness with heavy selling in the first half of the day. I have no idea how the 2nd half of the day will play out. We may rally into the close or just flatten out weakly into the closing bell.
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9 comments:
yesterday and the day was the day to sell on the QE3 with the belief that the economy is so weak that it warrants it. Economists can debate the effects of QE but the fact is, equities will never go downtrend in any new round of QE. fed's only goal is asset inflation. They only know how to create bubbles. Expect any future negative jobs reports to bid market on expectation of more QE.
In other words, all news is good news. Bad economic news is good too
In other words, all news is good news. Bad economic news is good too
That's the way it's been for a while. Although recently, fading/selling into gap up openings has also been working.
Going thru the Dow compentents too many breakouts I think for this mkt to keep getting faded... I think another squeeze is building after having burnt off the short term very overbought RSI's a bit.. might still press 1300 area
Great call what is your best bet for tomorrow? gap up or down?
I have to see the rest of the day first. But probably a gap up is much more likely.
MarketOwl, the market appears to be lingering too long. It should've been testing the lows already. It's as if everyone knows now to fade the rally and it's letting as many as possible go short. Do you think this might rip higher into the close? Do you see something different?
If today was a Friday, I would say we would close weak, but tomorrow is options expiration day so it could rip into the close. Hard to tell.
Excellent call, owl-man. Great stuff. Thank you.
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