Wednesday, March 27, 2013

03/27/13: small short SPX for 1-2 day trade

Finally back from my trip.  SPX gapped down to 1552 today and bounced back to almost break-even, finishing a tad under 1563.  Traders are still buying all the dips.

I opened a small short today during the last hour.  My rationale is that we are 1) overbought on the CCI timeframes and 2) at support for DI-.  The risk for this trade is we break above hard over 1563 tomorrow.  This would validate an ascending triangle formation.  There is certainly weight to the bull argument here because the OBV has made a new high.

In the big picture, I am still expecting a new all time high for the SPX.  It is that the analysis between now and when that happens is very murky.  In the meantime I am staying nimble and letting the market dictate how I ought to trade.

I am expecting continued choppiness.  The ADX is crawling on the floor again.

There are a lot of differences amongst indicators.  We have no negative divergence on smaller timeframes but on the daily chart NYMO is still showing lower highs along with the OBV on the daily timeframe.  Hourly OBV does not show a negative divergence.

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