Intra-Day Update: Crawl Baby Crawl!

UPDATE 9:57am EST: We are getting a red signal on the zero, and I’m paper trading a futures contract again. Otherwise the tape looks like the type of ‘crawl’ we had to sit through yesterday – better grab a good book. I have no opinion as to the final direction yet – based on the news (which I personally usually ignore) the mouth breathers should have run for the hills, but thus far wishful thinking and hope is prepping up the tape (which is exactly the reason why I usually ignore the news).

Here are today’s SPX retracement levels:

DZZ made a comment about market correlations and that reminded me of a chart I wanted to post a while ago:

This is a correlation indicator tied against the SPX and USO (sorry, Prophet does not permit us access to CL futures right now – what’s the deal with that T.K.?). See the correlation flipped in a matter of 3 weeks starting back at the end of August? Commodity traders are nomads and once one sector is out of fashion they move to another – or when they expect a market correlation to flip it’s almost a concerted decision and it happens in a relatively short amount of time. Always good to keep an eye on those things, but I think it’ll be months until we see this one flip the other way again.

UPDATE 10:07am EST: That was a nice snap up the the 1120 pivot – happened in what – 5 minutes? Which is why I caution everyone from taking trades in the first 30 minutes to one hour into the bell. Market needs to pick a direction and right now we’re still at the tipping point.

UPDATE 10:30am EST: Well, we breached that 1120 on the NQ  – some buyer out there really wanted to get passed that one (having fun Ben?).

Talking about correlations – the Yen is moving with the market today – that are usually the days I take a step back and just watch. Market is very confused and is doing the opposite of what Europe or the overnight futures were promising. TNX is also stuck around 2.72 and is not moving – usually bad for equities – but today some buyer is kicking things uphill since exactly 10:00am EST – feels like program trading to me.

UPDATE 11:00am EST: We are nearing 860 on the SPX. Here’s what 2sweeties said this morning:

…you may find that 860 is actually a very good level to go short.
In fact, regardless of where you set the 100% odds, it may actually be that 860 is a good early short level, but if you go short there, make a small bet because the odds there are low…

There you have it – I’ll jump in here with a small futures short in my ES paper trade account, in particular since the MZ is pointing down right now – but it’s not red yet, so if we breach 865 I’m out again.

BTW, I failed to mention that there is a ‘weekly’ short RL at 857, maybe that one is worth watching as well.

UPDATE 12:03pm EST: Red signal now again – hope it holds. We’ve been chopping around here for an hour now and the tape today is getting on my nerves. Show of hands – who’s having fun today?

UPDATE 12:27pm EST: Retest of the 857/860 again. I would be very very cautious trading this market today. It seems that we get creeping action to the downside for a little while and then we have those sudden bursts of buying kick in. Also, these bursts seem ‘scheduled’ – I was writing down the signal switches and look at this:

• Green 10:32am
• Red: 12:02pm
• Green: 12:30pm

Am I being paranoid or does this reek like program trading?

UPDATE 1:16pm EST: I just put up a tutorial on how to ‘auto-reload’ the actual zero image data feed in Firefox. This way you leeches can see it full-screen and no manual interaction is required. This might help in particular with the 4×1 grid I just put up. The poll seems to have strongly favored all time frames, so let’s give this a shot. If I change it into a 2×2 grid the indicators get too squeezed. Let’s see how this goes. If nothing else we might have to decide which time frames are the favorites if we have to go back to a 2×1 grid. Let me know what you guys think.

BTW, hating the tape today – not touching this. Never seen the zero switch that often in a matter of 2 hours – very annoying.

UPDATE 1:41pm EST: Okay, we are approaching pivots on the YM, ES, and NQ right now. Watch your short positions and be on a look out for either a snap back or a little retest at least:

• YM: 8340
• ES: 838
• NQ: 1120

UPDATE 2:07pm EST: Have you guys noticed there is always a fake-out move on the ES at the time of those reports being released? In 75% of the cases if you see it swing up it goes down two minutes later. Cheeky monkeys those institutionals 😉

UPDATE 2:12pm EST: Great – now we rally on weak economic data – which is why I usually dismiss the news. Case in point again – investors out there have reached a state of complete irrationality.