Anyone Care to Explain Today's Rally? :)

I had experience when I tried to ask why the market was doing this and that, I felt eternally painful.

one thing for sure is that you do not want to lose big on an expiration day, actually any Friday. so be prepared next time.


:p
 
What happened is they found an excuse to sandbag some longs into selling, and some shorts into shorting more , on that oil fire, and spent the rest of the day making them regret being born.

There were some very large SPY prints during that period so who knows who sold thinking the end was upon us.
 
Quote from Momento:

Triple "bitching" fridays are always... wild
No explaining needed. No explaining can be done.
:cool:
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wasn't triple witch today. Next month.
 
Quote from BobbyMurcerFan:

Okay, I was really caught off guard by this. It didn't cost me anything b/c I stayed out today which was kind of stupid b/c the set up I was looking for happened in the am (essentially a dip in the Dow after the mild increase from the morning.)

So what caused this rally? Did any of you expect it, care to explain it, catch some ES points out of it? Thanks as always!
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Bobby,

Here's what happened today...my version of the story...

the rally that started in the Eminis around 1030am est off that intraday low has happened enough times in the past year...

it's very noticable.

Here's the basic of the market reaction to a breaking news event that's hitting the TV and/or financial networks hard.

In this particular case...there was a small rally or price surge between 1000am - 1007am est...

then...slowly a big news event begins entering the market...

stifling the rally...

next...the big new event is now hitting the important news wire...some traders with excellent realtime news feed...have started picking up on this...

either exiting what's left of that profitable Long position prior to the news or keeping losses to the minimum...and entering Short positions...

It's what I did and I didn't even know exactly what the big news was...all I knew it wasn't good and I needed to get Short.

By 1015am est...major TV networks are showing the aftermath of the explosion at the Staten Island refinery.

More downward momentum and traders are a tad bit paranoid...remember it was just the earlier this week with all the news of warnings and DUCK TAPE buying frenzy...

between 1015am - 1030am est...you are Short or stupid...

however...here's where remembering recent past events (trading notes)...

once the breaking news has been floating in the markets for awhile...traders due something natural...they begin asking questions...terrorist attack or not...

in this case...rumor is...it's not a terrorist attack...time stamp...somewhere between 1028am - 1030am est...

guess what...it's time to buy and buy big time.

I guess that was around 1030am est I hear (see Long position posts by traders that are consistent with their profits)...once again...your now either Long or stupid.

Here's where those trading notes come into play....

how strong of a bounce will this be?

In other words...you don't want to exit too soon and miss out on the big cruise.

Find that first big volume spike on a bearish candlestick soon after 10am est...

that price was about 839.00

Mark that price and you have a high probability profit-target if you started buying after asking that question...terrorist or not.

If you stayed Long after the 839.00 price level on that rally...

your either greedy or truly know how to milk them rallies.

Hopefully my explaination helps.

Yet, its useless if you don't learn anything.

Learn what?

Take good trading notes everyday...organize them for quick and easy access unless you have an incredible memory.

Then simply react to the news event.

These news events (Key economic reports or breaking news) will often produce those...

home run days. The ones traders open up that vintage wine and call it a day after exiting their last position :cool:

P.S. Today is an excellent example of a trading day via price action alone methods that would have produce the big points...

indicators would have gotten you tickets into the game...yet would have had you enjoying most of the show as a happy fan from the stands...depending of course on which team you were cheering for.

NihabaAshi
 
Harry,

would you please explain what the heck those pretty lines and charts mean? Maybe you would be so kind as to do this before the markets open...so no one can say you are explaining the action using your system with 20/20

ps this is the second time I'm asking this.
 
Great post. I think it really shows how technicals used w/o news can be very misleading. Maybe a more experienced chart reader would have been able to differentiate this move from a legitmate change in the daily trend.

I was listening to Bloomberg tv and it announced the news right when the market bottomed. I'm glad I didn't Transmit that short at the market trade that I have ready to go in case of emergency.

And it's funny, I didn't send it for two reasons. One, I hate trying to make $ off of tragedy, two I saw that market had already fallen and had started to level just a little & remembered that I'd seen this before where the news is too late to act upon.
 
Amen, good men are blessed.

:p

Quote from BobbyMurcerFan:



And it's funny, I didn't send it for two reasons. One, I hate trying to make $ off of tragedy, too late to act upon.
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