Wed. 03/25/09 - V Reversal

I had a lunch meeting with a recruiter so wasn't able to trade the morning. I tried trading the afternoon session but TradeStation was not accepting my orders (order would just sit in the queue). I tried shorting 799 before the flush down to 787, but TS refused to accept the orders, so I just sat and watched. I was looking at the 15-min ES chart and noticed that price was holding above the .618 retracement. I was expecting price to bounce back to the .382 retracement in the 798 area, and close above 800, which it did. In the past few months, we've become used to seeing sell offs in the afternoon, but now we're beginning to see some strength come into the market, indicative by today's late afternoon recovery. From reading other blogs and trading sites, everyone and their mother is expecting over-head resistance, and the term "over-bought" is being mentioned a lot. The recent market action is indicating further up-side at the moment. So no trades on my side today, but I still marked up the charts for my own education.

Looking at the 15-min charts, the technology (XLK) and financial (XLF) sectors are looking OK, but there seems to be a lot of selling pressure in the energy sector (XLE), and I'm afraid that sector may hold the S&P back from a strong up-move. I'm not an expert at sector analysis, rotation, or anything else market-related for that matter, but that's just what I'm perceiving at the moment. If 818 holds tomorrow, we could see another short squeeze take place pushing ES above 828.

On another note, I probably won't be trading much tomorrow or Friday since I'm flying out of town this Sunday, and have to finish up a couple of IT projects before then.

On to the charts...

ES 610-Tick bar Chart (Morning Price Action)


ES 610-Tick bar Chart (Late Morning Price Action)


ES 610-Tick bar Chart (Afternoon Price Action)


ES 610-Tick bar Chart (Late Afternoon Price Action)


Gap filled by 1:00 PM


ES/$TICK (3-Min)


ES 15-Minute - Price remained above the 200 EMA.