For A Fistful Of Charts

It’s Monday morning and I would like nothing better than to dazzle you all with insightful charts, awe inspiring market analysis, and setups galore. There’s only one problem: This damn market stubbornly continues to churn higher without much of a hiccup, thus frustrating a legion of traders who hated it at the lows, shorted it every step on the way, and is now incapable of adjusting to the bull’s new law of the land.

From a financial blogger’s perspective this is challenging to say the least. For if you’re one of the few who went long then your recurring updates are tantamount to pouring salt into the open wounds of traders who incurred consecutive flesh wounds via their (often over leveraged) contrarian entries.

As such every R increment higher serves as yet another unwelcome reminder that participation in the financial markets whilst holding a directional bias will not only be detrimental to one’s trading account but one’s general frame of mind as well.

Which may explain the meteoric success of sites which constantly get it wrong but instead of learning from past mistakes resort to conspiracy theories, proclaiming that yet another missed market rally has clearly been engineered, is morally unjust, obviously unsustainable, and simply should not be happening for reasons X, Y, and of course Z.

The simple cure to all this is emotional detachment and recurring introspection, as personal opinions or whims are rarely conducive to one’s bottom line. But frankly it’s quite a tough sell and despite good intentions abound calls to simply follow the tape wherever it wants to go remain largely unheeded, especially in an attention deficit driven social media enthralled culture.

Now the other day I put up a post in that I quoted a central tenant expressed by trend traders, which is to buy high and sell low. Admittedly this is an over simplification but any trend trader worth his/her salt would agree that the basic principle stands.

Most people seem to have a hard time wrapping their head around this idea, which frankly puzzles me to no end but probably not for the reasons you would suspect. Rather I have found that a large portion of traders seem to fervently hate rallies near lows but then for some reason love them near highs, may this be due to capitulation or fear of missing out.

Maybe I was dropped as a child a few times – my mom sure wouldn’t tell me – but I never really suffered from this affliction and don’t have any compunction about going long an established trend. Of course a little dip is always welcome, especially given the intra-day volatility we had to up with lately.

More specifically on the E-Mini I’m looking for a retest of ES 2930 where I would be on the look out for a juicy spike low with a dash of a retest.

My crude campaign got snagged at only 1.5R in profits last week but not all is lost as I’m already back at my old shenanigans with an ISL < 62. That dip lower to the 25-day SMA is by no means a guarantee of a reversal higher but given the medium term trend it does suggest decent odds of success.

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