New Channel Magic

11:00am EDT: Some very strange tape today – was talking about it with Keirsten. Something ‘feels’ different – can’t really describe it. It started when I was buying the early morning dip in the futures and it was all going very well – up by like eight handles. Suddenly – bamm!! – the ES dropped by 5 handles in about one second or so – that was pretty violent. I haven’t seen anything like that for weeks now – any downside in the recent past was more of the ‘orderly walk down variety’. I’m not going to overanalyze it but if you look at the Zero Lite this morning you’ll note that something is a bit strange – for the first time in a long while there seems to be a battle going on. Perhaps it’s got to do with the bond auction later this afternoon – we’ll see.

We seem to be painting a new channel, which is less steep – looking at the chart above it seems that we are getting closer to a top – momentum seems to be slowing down. That doesn’t mean that the top is in, just to be clear – we might still have a sudden blow off top. It’s very hard to predict as participants seem a bit confused right now.

12:04pm EDT: My channel seems to be spot on:

And of course we bounced right off it. Nothing to see here, ladies and leeches – unless we breach this thing – if we do we might actually see some fireworks. Forgive me for being skeptical 😉

Not sure if you guys noticed but the ole’ buck made a new low today and immediately bounced off the 50% fib line. Technically I would like to see 78.21 breached, which is the low from last December.