Monday, 8 August 2011

The Market Never Sleeps

I woke up this morning just before 5 am European time. Everything except Gold was down. Both the fear and margin calls are driving prices lower, even markets that are not really impacted directly by the latest news are lower.

Those of you who have been reading the blog know that I have been expecting more of the downside. It's strange how the fundamentals just come along to make the technical picture true. Seems that a lot of people have been in denial about what has really been happening.

Commodity prices have been hit quite heavily resulting in the Aussie Dollar coming off about 6% from its recent peak.

I think we are still in the midst of the fundamental realignment that I have been talking about for a while. Looks like its going to go on for a long time and we will have huge swings in volatility as markets play out. The impact on traders is that stops and targets need to be more dynamic to accommodate the changes in volatilty on almost a daily basis. The methodology stays the same but the metrics change. I started writing the blog at about 6 am Euro time and have just seen the ES break down again after opening some 30 handles down and trying to rally. I'm showing a low for the day so far of 1161.50 and a high of 1179.00. Today's chart will be interesting. I have CNBC on to get the tone, and the fear in people's voices is quite apparent.

The realisation that the economic engine of the world, the U.S.A., is in trouble, has finally arrived.

I'm looking forward to a terrific trading day, but with a tinge of sadness for the hurt that the current state of affairs is causing.

Dow EuroStoxx50 on Eurex had a bunch of great trades this morning. You can see that even if you want to trade manually, by creating indicators that see the information and alert, it's possible to use the technology to enable me to operate at a much lower level of concentration and to look at more markets at once. An algo can have many configurations and many purposes.The last two trades bounced against yesterday's VAH. The second failure, after the chart was shot, resulted in a nice reversal down. The context rules and is why I am an advocate of Hybrid Trading.

The ES wasn't shabby either. Whether just using trade logic in alert indicators or trading algo with Flo, managing more than one market becomes easier and more consistent.


  1. hi EL: It seems that you meant to attach the EuroStoxx50 chart first and then the ES, however they are both ES.

    Looks to me like your Pressure Points are indicating change of slope of slow EMA with confirmation of the slow CCI.

    Best Regards, Rick

  2. Thanks Rick. All fixed. Yes, it uses the EMAs and a little more.