The Infomation

So far so good. Yesterday the market gave a lot of information. 1452.06 was exceeded. So the odds are that it's in a correction down, not an impulse, and the ramifications of this are huge. It tells me new highs are possible and that heavy oversold conditions should be bought.

I like to find these conditions on 30, 60, and 240-minute charts. I don't jump in every time the 5-minute chart gets oversold (although sometimes I do). Rather, I try to build a position when the larger time frames come into alignment, when set ups play out over several days.

The 1457-1458 area got tested as well, and as expected, the down sloping trend line from the 1474.51 top provided heavy resistance.

Today could see a bounce back to 1450-1452 or slightly higher before a new decline resumes. I will look to sell this area with yesterday's high (1457.14) as a stop. The 50-day moving average (1413) looks like a target, and also lines up with some Fibonacci extensions and trend lines (1410). There I will look to be a buyer.

The expectation of a rally from 1410-1474+ is an excellent risk/reward and a strong motivation to trade the long side regardless of my personal thoughts regarding the underlying health of this market.

The title of this post was inspired by Beck's album The Information. Here's a cool tune from it that reminds me of blasting through the desert of New Mexico for some reason.