Ground Rules

UPDATE 9:35am EST: Good morning steel rats, hope you enjoyed the long weekend. First order of business is to inform you  that the free ride with Retracement Levels levels has ended. So, starting today you’ll have to cough up a rather insignificant monthly subscription fee if you want to get your greedy paws on those numbers. So get your butt over there and sign up – 2sweeties deserves to be compensated for his excellent work. This also brings up a few ground rules:

#1 – The first rule of RetracementLevels is, you do not talk about Retracement Levels.

#2 – The second rule of RetracementLevels is, you DO NOT talk about Retracement Levels.

#3 – If someone says broke, goes limp, taps out, the trade is over.

#4 – Two guys to a trade.

#5 – One trade at a time.

#6 – No shirts, no shoes during trading.

#7 – Trading will go on as long until the final NYSE hour (4pm EST).

#8 – If this is your first night at RetracementLevels, you have to trade.

I think that should cover it. Now seriously, those RLs are not public domain anymore, thus please refrain from talking about them on this blog (or any other). If you publish or mention them without prior approval by 2sweeties you will get a warning and your comment will get your comment removed. The 2nd time will get an ass whopping by me personally and the 3rd time will get you banned. Those are the rules – please abide by them.

Also, here’s this week’s economic schedule – plenty of juice coming down the pipe. I’m particularly excited about the jobless claims and housing starts on Thursday.

UPDATE 9:56am EST: Wowzers, we dropped all the way to 822, which henceforth shall be our line in the sand. Remember, in my weekend update I talked about the 820 level as I am ready to unhedge myself once we breach below. So, let’s keep a keen eye on that line, maybe we get our 2nd X-Mas earlier than expected.

UPDATE 11:02am EST: Just wanted to throw out a little warning – market participation seems very thin this morning, so be careful. Those little surprise spikes/drops will continue until we see the big boys joining the game. Stay nimble and be ready for anything – I think everyone is waiting for some miracle move based on the inauguration. Complete horsewash in my mind, but that’s why they call it the ‘slope of hope’ right?

UPDATE 11:13am EST: I’ll be pretty quiet in the next hour or so as I’m toasting goodbye to the worst president in U.S. history – good riddance. BTW, please no political discussions on this blog – this is my personal opinion and I know some disagree. Anyway, time to bring out that bottle of Cristal I bought a few months ago – just for this occasion.

UPDATE 11:24am EST: ES now already at 820 – SPX at ~825. According to EWT rules we are already in a down trend again but I’m playing it safe today due to the lack of participation – will unhedge below 820 on the SPX.

UPDATE 1:42pm EST: That was a wonderful inauguration ceremony – but we rats are not the emotional type, so back to business.

In case you haven’t caught on to today’s little game just yet: There is little participation (maybe it’s fear driven), thus the MMs are ‘encouraging’ buying and selling by bidding the price back up to the VWAP, where usually the big bears step and and push it back down. So, what you keep seeing is this wavy bouncy pattern which is pure heaven for daytraders. IF you initiate positions, even when you get a Zero signal on days like this, it’s wise to wait out a bounce and then get in.

UPDATE 2:03pm EST: We’re a few ticks away from 817.04 on the SPX – getting ready to unhedge. Wait for it – a few ticks sometimes make a world’s difference. OR, if you prefer to buy them back on the way up wait for another retest of the VWAP.