Depolarization doesn't mean "Jump in and Short Everything"... It just means that never-ending straight upside nonsense is over.



Oh, and as for how to read that... Those are ten period running statistics. The light fill is running ten period probability of prices touching above mean. Bull market runs can touch above six day mean prices every single day for quite a while...

The other two lines... Are probability of six day mean + 1/2 ATR, and probability of six day mean + 1 ATR.

Even though the probabilities are lagging, each strong rally statistically goes through the same process over and over... High strength early phase, weakening phase, then eventually... Correction!

Anyone want to stop by and chit chat? Any questions? I'm just hanging out here because I am bored...

Market too slow... I might actually be trading some longs tomorrow if we sell down hard into the 2050 area. Need to see a volatility expansion and strip out the weak longs form the last few days or there is too much risk long side. It's not psychologically worthwhile to trade during crappy slow days. Holding a position for ages just for a few points... Boo!!!

Best to save up energy for the good days.

meanVelocity 

Anyone want to stop by and chit chat? Any questions? I'm just hanging out here because I am bored... Market too slow... I might actually be trading some longs tomorrow if we sell down hard into the 2050 area. Need to see a volatility expansion and strip out the weak longs form the last few days or there is too much risk long side. It's not psychologically worthwhile to trade during crappy slow days. Holding a position for ages just for a few points... Boo!!! Best to save up energy for the good days.

we did have a 10 point sell off today...

Anna K 

we did have a 10 point sell off today...

Yea, one problem though... I was not awake to grab anything short at resistance.

It wasn't an amazing setup anyway... Could have gotten a great selloff if we had hit new highs. Primary daily resistance was around 2077 today.

If your going to short a rally... Gotta get in near the top of the daily range, otherwise you can't reposition for a scratch or little loss if your wrong about a pullback.

I have a rule I follow that serves me well... If I see a move, it means I missed the move. If the market is selling for an hour or so already... Most all short term speculators have seen them move, and they have positioned short or sold in fear already. Most of the meat on the move is gone.

You gotta get in before people pile in...

The exceptions are corrections, and rallies out of corrections... I just don't really think many big money managers and players are going to be moving money around this week.

This is mostly just small fish pushing the market around today IMO.

Actually, getting 2050 long isn't realistic tomorrow... Not without a news catalyst.

Buyers will come in strong around 2060 and cheaper right now.

Now, here is something interesting... You see those up and down triangles on my chart? Those are not sell and buy signals. I interpret them as indications that people have seen a move... It's confirmed across all their indicators and etc...

How the market is behaving during and after the dip is what is important. Buyers came in once they saw todays dip bottom out, but they are kinda uneasy right now because the market is just drifting.

A hedge fund is probably thinking right now... Would be a good idea to drop the futures overnight to wipe out long positions and cover the overnight position into the high volume panic out of the gate. Good profit potential to be made there.

Go watch the Cramer interview on YouTube where he discusses his illegal market manipulation tactics he use to use. He commonly use to gap the market ten points intentionally in the low liquidity overnight just to screw with people and change market sentiment.

You have to be careful out there... Many people don't get the whole "liquidity" equation. Sometimes it's quite profitable for a big hedge fund to push money into gapping the market up if there is some positive news that people will rationalize... They can quickly liquidate their large position out of the open from their overnight manipulation because of the burst of liquidity.

It doesn't work if someone else bigger spots what they are upto and attacks them though. There was a interesting article I read a while ago on the tactics of Salomon traders. Back in the day they had a 80-100 billion dollar credit line they used to suddenly ramp currencies a couple percent or more.

The move would attract buyers which they would then distribute to. Usually the move would collapse back down further than they pushed the market up, but it usually attracted enough buyers at good enough prices they managed to distribute most of their position high enough to profit well.

I would say that the only perfectly honest price action in the US market is from about 10am until closing period. However, it doesn't really matter if some big player is manipulating the market into the open or not, it doesn't change support and resistance and the markets natural elastic tendency to magnetically be drawn back toward Mean/Fair Value though the day.

There was a story a while back about a big trader for a bank trading desk that went on tilt... He established a six billion dollar position over a few days in secret... Desperately holding up the prices of the entire S&P. He thought there would be buyers that would come in if he just kept the market up and kept pushing.

But, after a few days... They discovered him, and six billion of ES got liquidated into the market at massive loss and dropped the market hard.