The collision of global markets and social mood

Wednesday, March 16, 2011

Back To Trading The Extremes

Last Thursday I posted a chart showing that the S&P had just as much work to do to the upside as to the downside. I still feel the same way.

I will trade the extremes until I'm confident enough that we've hit a low or made a major top. That means using a 30 minute chart to identify overbought and oversold areas intraday and then a 5 minute chart for entries using high-gamma options to initiate counter-trend positions.

I will most likely trade both sides, long and short, before choosing which side to build a position that hopes to profit from whatever trend materializes.

In my opinion, the situation in Japan is far from over, and sadly, may be getting worse. Bahrain is heating up as well. And Portugal was just downgraded two steps. Does this add up to a Wall Of Worry, or have we witnessed a major turning point in social mood?

Only time will tell, so trade well.

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