MORPHEUS

S&P 500 - SUICIDE SALE

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ESU2 Futures - 180 Minute

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1363 in the S&P is a big level everyone knows it. There is much twitter and talk about it all over the matrix. The important things to focus on are the technical conditions of the market as it approaches this final stronghold of the bears for miles around. Trend was confirmed positive at bar "+". The momentum oscillator is positive and TRENDING upwards. The moving averages are triangulating with price into this resistance point, coiling the potential breakout spring tighter and tighter. The failure of the market to follow through the down bar marked "X" that made a recent low near 1350 is a very important clue that selling pressure is unsustainable at this point in time. The fierceness of the rally suggests that people are still short, trapped, and hoping this resistance will save them by containing the charging bull allowing a pullback to 1330 or so to let them out. The buyers expect the same pullback or a dip so they can get in.

With so many hopes it will go down and no panic blowout move to the upside the situation is primed for a vertical wash. Selling short in this type of situation is suicide, even if it's only for a "short-term" or "scalp" trade. You can become trapped in this environment and unable to get out. Stubbornness can keep you in the trade...and the market will grind your account up.

Go with the momentum, the trend is your friend.

Updated 07-02-2012 at 06:58 PM by MORPHEUS

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  1. marketmaker's Avatar
    Considering that you wrote this yesterday, I mean what do you have over there a crystal ball? You nailed it!