Wednesday, December 18, 2013


I totally saw today's massive move! Did you? 
Just kidding!  It has been a while since my last post but if you look back at the last couple of entries those price levels were still very relevant.  Of course back then we had just hit all time highs so we had to maneuver the markets by looking at intraday levels and watch as they manifest themselves into higher timeframes.  Below is the SPX 15min PnF chart posted on November 21st entry.   You will notice that even back then the 1773 area was growing in importance as a significant level of support and resistance.

Fast forward to December 13.  The SPX 30min PnF chart paints the same picture of support and resistance.  Once again you can see 1773 area (this time 1772) acting as support as price dropped from all time highs.  I want to point out that the variance in support and resistance is due to volatility.  Just look at the box size and how it changes.   Again we are only taking about 1 or 2 points or fractions of a percent.

Fast forward to today's massive move triggered by the Feds announcing a reduction of the bond buying program.  I remember a time not too long ago that the mention of tapering would have trigger a decent decline but I guess times have changed.  Support and resistance does not change and once again 1773 (1771) reveals itself as a significant area of support and resistance.  Additionally, we can now see that 1810 is current resistance.  So we now have a boarder trading range between 1810-1773 which for a short term trader is a decent size trading range.   Today's volume was massive which at these nose bleed levels is either the start of a new uptrend or the beginning of distribution to those that honestly believe that tapering will lead to a continued move up for the markets (and lower bond yields).    I'm leaning towards the distribution option myself.  The market will reveal its intentions in the next couple of days since we are at a key inflection point.  So lets wait and see.

As for me, this will be the last post for the year for me.  The past couple of months have been tough personally which served to distract me from analyzing the markets and of course posting regularly.  This year has however, been one of the most educational for me in my journey to better understanding the markets which I plan on continuing into 2014 and beyond.  I've posted close to 70 entries and often find myself repeating the same content which is boring me and probably everyone else.  For 2014 I will be changing things up by posting only when I see a trade setup and initiate my own trades based on that analysis.  I think that will be much more interesting to write and read about.

I just want to say to all my readers and followers to have a wonderful holiday and enjoy the time with loved ones.  The markets will always be here tomorrow so spend quality time with those around you.  Acts of benevolence provide far greater rewards then monetary riches.

"Happy Christmas to all, and to all a good-night!"

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