Feeling Blue

11:00am EDT: And there you have it – it seems we are a few ticks away from Blue confirmation:

I actually hedged my puts at ES 995 right before the open – the pattern was crystal clear and all my indicators were lining up to strongly suggest a ride to the upside. Even made back about 80% of the premium I burned in the past two days – good morning so far.

Now, take a look at the chart above – we seem to be scraping the upper boundary of a channel that represents the dividing line between orange and blue. The tape looks pretty bullish so far and we are only a few ticks away from filling a gap in the ES futures at 1005.75. So, chances are right now that we’re going to fill this sucker either today or by the end of this week if they decide to tease things out a bit more.

The new POMO schedule has been posted last night and we’ve got three more of those Fed sponsored cash infusions before the end of the month. Looks to me that SPX 1050 or 1100 might be in the cards – so, I’ll stay hedged until we start making new highs and will then load up on more March strikes.

I have to run out for a few hours and will be back in the early afternoon (EDT) – hold the fort while I’m gone!

2:32pm EDT: I’m back! Looks like I didn’t miss too much while I was gone. Notable however is that we seem to consolidate sideways, haven’t lost much upside since I left this morning. That spells trouble for the bears as we are now pushing into short term oversold territory. Unless we get a sharp drop here soon the best we might get is an ES VWAP retest around 1001.5.