ES Journal Archive (2006 - 2008)

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Quote from Pholeuon:

Hello, has somebody some idea how will affect ban of short selling trading index futures? I mean usual behavior, patters, reaction in S/R zone, to oversold conditions, etc.

I do not know if it is just ban of new shot positions because if it will be obligation cover the existing ones than covering funds will drive price through roof and than it will fall back more than techs during bubble.

But I am afraid that even just impossibility open new short position will change usual mode.
As minimum by ESTX50 i see huge spikes and falls - very unusual for it.
And look at ES - it moves like ER2 as minimum
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Japan did that. Completely messed up all intraday patterns is the least thing you should worry about.

So called temporary rule may stay if government deems the change helps "stablizing" the mkt.

If Germany and other countries follow the footstep due to their politicians trying to copy the act as the "result looks promising", most of the market dynamics as we know will be gone forever.

My diversification into instruments outside of the stock mkt seems like a very good move now. :)
 
OK, here's one from the historical price studies I used to do.

this study was based on price action 2 weeks before the presidential election through 2 weeks after the presidential elections) This is not necessarily a bottom picker, but a recognition of what has historically been a potential launching point (higher) for a few weeks.

Historically, one of the best days to be a buyer has been the close of the 6th trade day before the presidential election day. If memory serves me correctly, this was based on data back to the 1940's.

this year, that 6th trade day before the election would mean buying the close of Friday October 24.


Think about this:
The semi artificially induced rally we are in will probably produce good upside maybe until/near oct2 when the short sell restrictions run out. Once the short selling restriction is removed, there should/could be profit-taking and a good retracement.

PA rules, but I will be interested to see what daily/weekly price action looks like as we near October 24.

"Markets are never wrong; opinions are." -J.L. Livermore
 
Quote from wave:

Statistically, we should not trade above 1269 before selling off again.

I see some shorts stepping up to the plate up here.
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As the losing side, the shorts who have the $ so far to withstand the shock are trying to do what they do normally.

The problem is that they may have to give in this time as many tools are no longer available. e.g. hedged sell program, sell side bots.

Right on option exp, forcing ES back to 1250 by close would be the worst joke of all.
 
Quote from Lawrence Chan:

As the losing side, the shorts who have the $ so far to withstand the shock are trying to do what they do normally.

The problem is that they may have to give in this time as many tools are no longer available. e.g. hedged sell program, sell side bots.

Right on option exp, forcing ES back to 1250 by close would be the worst joke of all.
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LC,
Yes, I wait to see what this will do to some trading systems.

1250 close today highly possible.
 
I see this as putting a bandaid on a broken elbow.

The gov't has been very successfull at finding scapegoats and manipulating the markets under the guise of "saving america".
 
Quote from wave:

Statistically, we should not trade above 1269 before selling off again.

I see some shorts stepping up to the plate up here.
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Concur. 68-72 zone *should* provide resistance. However 1288-95 zone is more applicable IMO.

Do not forget... FACT: this is contrived upside movement.
 
If PPT want try convince us - this is the bottom we never return here - than they probably want not leave such giant gap bellow us like obvioust short seller target. But who cares anyway...
 
A momentum trader just buys and sells and should flip sides on the reversals (a volume filter can help to decide whether to flip or hold on).

A momentum fader or his/her systems must be well versed and founded in statistics and odds. A deep study of option pricing and volatilities is very beneficial for momentum faders.
 
LC,

"Right on option exp, forcing ES back to 1250 by close would be the worst joke of all."


I wouldn't be surprised if we trade up towards 1269 and end the day at 1250. Checkmate for them.
 
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