ES and the Great POMO Rally

May 8th, 2011, 11:21 PM

Beggars can't be choosers. I was just trying to prepare for a world where you can't trade silver as it goes way up and way down.

Though they sounded like good ideas - easier isn't always better - but sorry to futures.io (formerly BMT) if wrong.

May 9th, 2011, 07:25 AM

Ignore what I said about giving away your edge.

I'm using futures.io (formerly BMT) to compensate for the lack of social life that comes with this type of trading and need to find a better balance away from "hero worship" and laying out upcoming trades.

If I ever get the advice of a self described Master it will be a lucky day. Crushed silver last night in the latter of two ways described - can't even imagine what they do.

Edited to add:

Michael - you got the brunt of a foul mood - I'm talking a break on here.

But not even clarifying your statement was annoying.

Glad people who trade ES stepped in to say don't short - shorting at 133 would have been the worst possible trade in days.

May 21st, 2011, 11:11 AM

I just wanted to provide an update of what I'm seeing on the ES from a big picture perspective. I have price breaking below it's bullish trend line back on May 16th where it then found support down at the 50 DMA and retraced back up where it found resistance at the noticeable bearish trend line and the bottom of the previous support TL. Additionally, I have a wedge break to the downside on the MACD where the average is approaching the zero line. Also, all the moving averages are beginning to compress signaling a potential change in trend.

My thoughts here. In a normal market environment, I would be building a short position on a break below the 50 DMA with the anticipation of a break down while cycling in profits at key fib levels. But because the trend has been so bullish, there could also simply be another bullish wedge break out forming and a break above the bearish trend line which would be a good potential entry area. This would also keep price above the 50 DMA obviously and no short signal would be generated.

In any event, we have about a month left of the infamous POMO liquidity pump. I wouldn't be surprised to see many traders becoming more neutral until either a definitive signal occurs or confirmation from the Fed on what their plans are next in the rigging/wealth effect of the markets. As I've said before, if the liquidity pump ends, it's game over...

Cheers,
PB

May 23rd, 2011, 03:34 PM

All / @Private Banker:

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The previous Big Mike Challenge from March 2011 ( was a big success, so I am going to start a second one.

The prize is an Apple iPad 2 (or equivalent cost if you want something else instead).

Take note - this contest is about Teaching Trading Methods. …

The Big Mike Challenge #2 starts in June and is about Teaching Trading Methods. If you wish to participate, please read the above link.

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Mike

May 23rd, 2011, 07:54 PM

If the S&P goes up to about 1400 - it could then correct to at least 1250 - if this year is an EWT diagonal triangle pattern.

99% chance of other's charts being better - I'm just throwing it out there .

May 29th, 2011, 12:41 PM

Update: Nothing really new to report on the ES from a big picture perspective other than price has thus far respected it's bearish trendline but has also found support on the 100 DMA. It seems that this market is getting ready to make a big move. A break in either support or resistance will be the obvious signal but I would recommend being careful as the Fed has not made a formal announcement of their intentions of extending and pretending or simply falling on their sword. I would think we may have something happen this week which will be an attempt to front run the Fed.

Cheers,
PB

May 31st, 2011, 06:27 PM

As anticipated of a big move, it conveniently came overnight on bailout rumors from Europe. Price broke out above it's bearish trend line (what a surprise) and got up to 1344 before retracing back down to last week Thursday's high where it found support. There also appeared to be an extension long coinciding with that same area that got buying interest and ripped higher. This morning's pull back also nearly filled the entire overnight gap which was nice and was probably influenced by the bad economic reports that came out.

Going forward, it appears that the bulls (primary dealer banks) are still in control of this market with their endless bid gifted by the Fed. We are now in the month of June which is when QE2 will end. There are a lot of opposing opinions on whether the Fed will continue with QE3 or some variation. I feel the Fed will have to continue with it's liquidity injections because without it, the market would have a quick and severe correction. But regardless of what their next idea is, it won't work. The economic data we've been receiving is confirmation that Bernanke's 100% sure it will work is nothing new but expected from him given his hideous track record. But if we continue as we have, the ES should continue to move higher. I'm still not looking to build up a long position however, until we have a more definitive idea on what's to come.

Cheers,
PB

June 1st, 2011, 05:38 PM

Wow..... Didn't see that one coming! I assumed it was business as usual with the daily liquidity pumping. It now appears we had a failed break out. Price retraced up to roughly the 61.8% level from the high's of 1373.50 and got denied sending price all the way back down to it's 100 day moving average.

Today was full of amazing short opportunities of selling into any retracements that occurred. The market opened up gap down and could not fill it's overnight gap which is where I started selling and was able continue selling into retracements several times today. At around 11:30 EST, price attempted to re-enter into the intial balance area and ended up getting denied. An amazingly bearish day with the NYSE TICK's barely being able to print above +600 all day with a low tick of -1,385.

Now, I would normally just build up a nice short position at this point but I'm still uncertain of what's to come next from the Fed so, I was just taking profits on these trades as they went along. Should this be it, there will definitely be plenty of opportunities to build a short position.

In any event, a very exciting day. So much for the CME lowering the margin requirement on the Equity Indexes, lol!

Cheers,
PB

June 2nd, 2011, 09:33 PM

The market opened up today relatively flat from yesterday's close. This could have been because of the Holiday in Europe but who knows for sure. Market bounced around a bit at the open, caught a nice little short right away and watched price bounce right back up. Watched price chop around, get denied at the initial balance high and drop below it's supporting trend line where I caught another nice short. This one was a run away with little to no retracement. Just gone. NYSE Ticks were pinned to the ground. Price came all the way down to the recent low of 5/25 where some buying came in at around 1304 that day. From that point, price found support and bounced back up into the day's initial range where I took a few more longs on the way up before wrapping the day up a bit early and was off to the Beach.

I think if we take out this level, we can be on our way down to test the next swing low of 1290.25 and the previous swing low before that of 1243.25 which is where the 200 day moving average is currently. But, I'm not a market forecaster. I just trade what I see and what makes sense but this is starting to make sense, lol! If we keep up with the selling, I will probably start building a short position with the potential to test the 200 day moving average. But we'll see how it goes. Tomorrow, we have Non-Farm Employment change where they're calling for 194,000. Something tells me this is going to be a big miss based on the Unemployment Claims we saw this morning where the forecast was for 416,000 and the actual was 422,000. We also will have the official (non-official) unemployment rate which is calling for 9.00%. The reality is the real unemployment rate is way, way higher and growing by the month. But rest assured, according to Bernanke, he's 100% sure that his quantitative easing will solve all of our economy's problems...

Cheers,
PB

June 2nd, 2011, 11:44 PM

Most of us have been saying we're overbought and need a sizable correction for many, many months now. But I would encourage us all to trade what we see - and that is buy the dips.

Now obviously with QE2 ending there is uncertainty, but as has been pointed out here in the thread - QE3 is all but guaranteed. At some point, buy the dips is going to fail, and we will see a huge market correction. But don't let it get in the way of trading what is in front of you, which is a bull market with endless bid.

Mike

ES and the Great POMO Rally

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ES and the Great POMO Rally