Wednesday, March 10, 2010

Wednesday March 10th Review

Continued strength in the markets, with the small caps and the Nasdaq already breaking January highs the Dow and S+P are lagging a bit, with the ES touching its January high today.

We had slightly above average range yesterday during the open outcry market, so are range extension targets especially on the upside would be reasonable fade entries.

The market opened in value from the previous day, and took off to the upside to form the initial balance. We had our first range extension area between the -23 and -38 zones conveniently at 1148 which was the January high.

You had to take this short entry on first touch with the market being a little overextended, made for a great fade. We came back inside range as initial sellers stepped up to the plate at the yearly highs. We ended up pulling all the way back to the midpoint support, point of control and IB high of yesterday which ended up being a great long entry back into the overall trend.

Bottom chart shows the market once again accepted value higher today.

Important note: the next two days will be difficult trading days, March futures contracts get liquidated into the June Contracts, rollover time. As well we have Options Expiration, we call this quadruple witching day (Friday). Don't be surprised to see a nice gap down tommorow, I would not be surprised to see a small break down to around 1126 or so during the next two days.

But its imperative to not overtrade the mess that will more than likely transpire the next 2 days. It may be best to take the next 2 days off, enjoy the family or the weather recoup and be back Monday. Not for me however, I will still be here:)