One of the reasons why I entertained the mere notion of an E-Mini long campaign over three weeks ago was that, while market momentum certainly appeared to be maturing, there clearly was plenty of remaining potential for a continuation of the advance. Or in other words, don’t ever trade against a rally just because in your infinite wisdom you have come to believe that it has gone far enough. Lacking any clues to the contrary always stick with the ongoing trend.
Things continue to progress nicely for us on the trading front and I decided to not push my luck by entering any additional campaigns today. After all correlation risk is significant in this brave QE world as currency driven moves usually affect symbols across the board. Besides everyone and their poodle seem to be bullish right now, and to once more quote the great Mark Twain: “Whenever you find yourself on the side of the majority, it is time to pause and reflect.”
I don’t expect that many of you are spending much time trading anymore and that you’re probably busy with last minute Christmas preparations. Now before you accuse me of forgetting about the remaining 77% of the world’s population remember that a vast majority of readers are located either in the U.S., Australia, or Western Europe. Plus we trade U.S. markets which still observe Christian holidays. And last but not least – I’m probably the least politically correct SOB you’ll ever have the misfortune of running into
Now as today also marks my last active trading session of the year I thought I’ll treat you all to one final momo update. [...]
It is the first trading session in November and that means it’s time for another momo update. What I’m seeing across the board reaffirms the current low participation holding pattern which I proposed in my last update. Various attempts to break even modest support zones have failed and in the process consumed almost all short term bearish momentum over the course of the past few weeks. Although I am still holding short positions from near ES 2150 my perspective now has shifted toward short term bullish and long term bearish. Let me tell you why.