Let’s analyze what happened today……
By Daniel at 9 February, 2010, 6:35 pm
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We saw a continued rally off of the short-term capitulation lows of last friday. We approached 1077 on ES in a way that is very important, and telling………….
First, the 1077 peak today was seen on a news announcement, which is always a landmark pivot area. Second, an extreme positive tick was registered at the same time………+1389. This extreme positive tick is the opposite of the short-term capitulation that we saw last friday with the extreme -1430 tick…………….only today’s extreme positive tick likely represented an exhaustion high for the short term……….
The government and GS have backed away from the market, for the most part, for the time being………..they are not trying to force feed it up with a firehose any longer……..we just have not seen the positive tick that would tell on them and their buying activity………
So, once again, this is a trader’s environment. Traders are having an excellent year thus far in this environment……..and it looks like that is the “trend” of importance in 2010
The likelihood of a short-term top today suggests we likely will be in a trading range from 1077 down to 1040 for a while in the near term……….and profitable trading opportunities should be abundant!! A close outside that box will signal the next directional move……….
All the best in your trading……….this is your year to make hay!!
- fishhook
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