The collision of global markets and social mood

Monday, November 14, 2011

A Retracement Inside A Triangle

Friday cleared up one thing: the S&P got above 1251.82. So for now the triangle scenario lives. This does not mean it's clear sailing to 1300 though. Now we have the luxury of a possible retracement to 1245. 1252 looks like the first area of support.

I was looking for one new high on Friday before the pullback, and saw a nice pop on the globex open in the futures last night. But for now it's a toss up. All I know is that I'm a seller higher and a buyer lower. My target is 1245. The absolute stop is 1215.42, but I wouldn't even want to see it under 1226.64.

These stops are huge, I know. But this is a big, multi-day pattern. The swings are wide enough so that you can speculate with cheap weekly SPY call options and hedge eventual profits with either short e-mini futures, or the SDS, SH, SPXU, or other inverse ETF.

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