Getting Into The Chess Of Trading

With the break of 1320.06 yesterday, I went to work as soon as the market backed off from the high. Maybe I jumped the gun a bit (the first buy was at 1317) but it was part of my plan. In fact, I was half-expecting to see the futures down this morning for a retest of 1300.

Instead, another magical 2 am spike in the futures has occurred. Oh joy. Even though I'm currently positioned to take advantage of it, it smells like manipulation. But I don't get into complaining about that stuff.

I get into the chess of trading, and anticipating what the wave patterns suggest the market may do before it does it -- the reasons take care of themselves. I'm not always right. But no one else is, either.

Today it looks like the cash S&P will follow through above 1320.06 once more should the futures hold up. Since we could be tracing out a triangle of some sort, there is nothing to stop it from probing to 1305 or so. The hard stop for true bulls (those who think the action since the October lows is a new bull market) is 1292.66.

Here's the challenge. It may be possible to get under that 1292.66 level and still lack an impulsive pattern down. It won't feel good for me if that happens, but it would still suggest above 1333.47, and that it would be the shorting opportunity of a lifetime if it gets there.

It is the market's job to shake out and confuse everyone. So don't be surprised by anything. Just try to be prepared for it.