Takin’ a break $STUDY $$ #ski #skiing #powder #chile #andes #gopro #market $ES_F $6E_F

It’s been an intense year for me, both in the personal and professional aspects of my life.

I have worked very hard this year and I look forward to continue to do so in 2012.

In the meantime, I’m taking a well deserved break from the markets.

Will be on the road for a few weeks, so this blog will take a different route when showing some of the stuff I’m interested into.

Happy Holidays and a prosperous New Year.

Below, a short movie of my last trip to the Chilean Andes back in August. Hope you enjoy watching it as much as I did shooting it, although I doubt it 🙂

 

 

Euro quick notes $EURUSD $6E_F (with update)

EURUSD somewhat over extended, at the moment. Will see how it develops.

first target has been achieved

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LATE AFTERNOON UPDATE

I was currently on a trade when I posted the above, thus the short post. I´m trying to state my position thru this blog and feel it is important to keep it up to date. 

The reason for the post is shown in the chart below. The pair was already over extended after a 130+ pip rally . Locationwise, it was on a previously thin area, marked by the dashed lines.

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Usually, a thin area reflects a big and sharp move. In this case, the Euro suffered a sharp selloff back in the morning of December 13th, when it retraced from 1.32400 towards 1.3060. The move then continued, ending with EUR/USD marking the lows for the year at aprox. 1.29440.

However, using the first line of support 1.2980-1.3020, it rallied into the thin zone marked by the the move described previously. 

Something to note is that usually this type of zones are revisitied at a later time (sort of the theory behind filling the gap, in classical TA). The idea behind this proposition, is that markets -as a reflection of the interaction between buyers and sellers- tend to be efficient and continually look for new areas of value. Is this happens too sharply and quickly, it leaves certain areas that have not been “fully explored”, thus the possibility for them to be revisited by new developments in price.

As I was watching the process, the important rejection of buying participation (denoted in orange) for a second time, singnaled th strong possibility (I said possibility) of reaching a top, at least intermediately (the later does specifically mean I think it will still be rising). This is noted in the chart below.

2011-12-20_20062011-12-20_2005

Where it will might possibly go from here?

No idea, although I could work with some plausible ideas:

Inventorywise, there are quite a few long positions committed, which -so far- have helped to cushion sharp downmoves and mantain the lows marked last week. We could really go in either direction. It is the middle of nowhere, short term.  There is no clear direction and no real edge. Better to stay on the sidelines. Longer term, there is still quite a ot of short inventory above. Therefore, if it holds, EUR/USD most likely will challenge new lows. Taking the opposite view, if the shorts decide to vcover their positions, this could eventually ignited a rally until new supply comes into the picture. Given the current political scnario in Europe, I really doubt it, although anything can happen.

2011-12-20_19552011-12-20_2025_001

Long Post $SPX $ES_ F $6E_F $SPY $$ #market

Following Sunday´s post, here are some of my observations. It seems that finally rollover period is almost done and things are gettin back to “normal” -if we can call it that way.

Still in a headline driven enviroment, I started the week working with a hypotesis for more downside

1240 is support, followed by the 3 gaps below, which are too strong to ignore and think that they would not revisited

It turned out that the scenario was confirmed and the SPY is currently in the intersection of the 2 gaps, sitting at the top of the second one @121.74. 

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I´m hereto looking at two possible scenarios:

a-) the move continues to the downside, specially due to the lack of congestion in this area, added to the fact that there´s a very thin area below, denoted by the candle of November 28th (almost a doji)

b-) the top of the second gap provides support for a bounce which could provide the opportunity for a rally. 

The ES is reaching the end of the rollover transition period, thus, there are some levels to observe thru the new March 2012 contract. So far, there is some acceptance of the lower value area, although there´s not much to hold it below. If the ES cannot hold this support, the immeadite target is 1198.75-1195 area. The CumDelta readings show that the last few days of selloff have literally left no long positions holding in the market. This is similar to the situation observed back on my Nov. 26th post (“What´s Next?“), where I stated to work with a rally scenario. Here´s a brief excerpt

As noted on the chart below, the last level of committed longs has been tested and gave up last Friday (the level is marked in white), which was reflected in the 12 point selloff during the early Friday morning. Although the index recovered some of its previous levels, he rally lost momentum, closing off 20 points from 1171.25 highs. This has left a heavy shorted market that could provide some fuel for a rally if new buyers come into the market. This is not a predicition, just a scenario. 

Similary, there are no more longs left at the moment, showing a heavily shorted market. However, it is important to note, that the levels are not 100% realiable due to the fact that we are at the very beggining of the term for this contract. Furthermore, the market can still go down if new short inventory is added. So far, keeping the options open. 

2011-12-15_0038_001

Although it has diminished slightly today, both ES and 6E have been closely correlated, a both had some little capitulation selling, although not to the extent I was looking for.

2011-12-15_01322011-12-15_0130

The postive to this is that –inventorywise– the EURO (represented here thru 6E, euro futures), is showing much more longs commited than the ES. Therefore, a scenario that I´m playing is the following:

Provided the positive correlation between ES and 6E continues, the fact that quite a few more long positions are committed in 6E (than ES) is indicative of further upside. Since the market is mostly driven by news coming out of Europe, therefore if this trend continues then the ES, and the market in general, could experience at least a short term rally. 

Just an idea.

2011-12-15_0044

Price action will ultimately tell in the coming hours if the market has found some foooting -at least temporarely- or if its only the beggining of the next leg down.

I have some slight bias to some further upside, although my decisions are based in what I see in the charts. 

Some levels to watch for ESH2.

2011-12-15_0038

Good trading.

Mid-week report $SPX $ES_ $SPY $$ #market

Following Sunday´s post, here are some of my observations. It seems that finally rollover perios is almost done and things are gettin back to “normal” -if we can call it that way.

Still in a headline driven enviroment, I started the week working with a hypotesis for more downside

1240 is support, followed by the 3 gaps below, which are too strong to ignore and think that they would not revisited

It turned out that the scenario was confirmed and the SPY is currently sitting in the intersection of the 2 gaps why the SPY seating at the top of the second one @121.74. 

I´m hereto looking at two possible scenarios, as most of the time:

a-) the move continues t the downside, speacilly due to the congestion of this are, added to the fact that there´s a very thin are below, denoted by the action of November 28th (almost a doji)

b-) the top of the second gap provides support for a bounce which could provide the opportunity for a small rally, at least for now

Talkin??about the Devil $FSG $GLD $SPX

Elizabeth-hurley-bedazzled-hq-capture-afokoaf-sized_288x288

FactorShares 2X (FSG) Gold Bull/S&P500 Bear (FSG) is a leveraged spread ETF designed for investors who believe gold will increase in value relative to large-cap U.S. equities in one day or less.

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 FSG seeks to track approximately +200% of the daily return of the S&P Gold – Equity Spread Total Return Index (before fees and expenses) by primarily establishing a leveraged long position in Gold Futures and a leveraged short position in the E-mini S&P 500 Stock Price Index™ Futures.

 

short post $SPX $SPY $$

No orderflow charts tonight. Due to futures rollover; I´ll be waiting for things to settle until writing further some of my views. 

Today just trendlines and few observations. 

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Note that the move stopped right into the 1261 level. The SPY has not yet managed to brake above the trendline.

1240 is support, followed by the 3 gaps below, which are too strong to ignore and think that they would not revisited.

Longer term, the S&P500 is above the 20EMA (monthly), however we can draw some clues from previous changes in the trend (white circles). If you look at those levels, that the chop lasted between 3 and 10 months, so we are just a tad below the average, and the 1200 levelis too close.

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