3 replies to this topic

[Darris]

Yep, lather and rinse markets with an upside bias keep us fully engaged!!! Good trading environment. Lot's of selling today, so maybe we get into the 1550's on the June ES contract Mon/Tues before the Quad Witch Rollover sell off, coincident with the week before OPEX discount. For consideration, if you study the ES futures contract price action during a Quad Witch, you will find for the last year or so, we have always "filled the gap up" when the roll over occurs beginning on Thursday within a day or two. Gary Smith has commented on the Quad witch seasonal weakness. Be ready to load up long at the point of the gap fill, and 5-10 pts below it. 35 End/1st of the month seasonal opportunity pts so far on the June ES contract, WOW! Have a great Weekend!!

[thespookyone]

Het Darris-allways enjoy your posts. As bullish as you are, I know that technicals still exist in your trading-and I feel you employ somewhat of a big picture view, like myself. I think you understand, that, intermediate term, I am much more bullish than most, but, the construction of a bull market has much to do with how it plays out. TRUE bulls should desire a fair "lather and rinse" here, as you put it-because it will not onlymake the bull much more healthy-but increase the lifespan, as well. IMHO, straight up will lead to implosion-period. I'm sure we would disagree as to the depth of the "rinse" here, but am interested in your number figuires as to where the gap would be filled-please post them if you get a moment. I also feel the correction starts into the quad. I have allways said that markets don't go down like they can with only people shorting-you need bulls to sell, as well-to get real speed. Markets can go up with bulls buying, but certainly accelerate when this is combined with shorts covering. In this same sense, I think TA is at it's best when bulls and bears share what they see-and we all end up with the best possible information. Although I love to short, I did not swim against that wicked current the last 6 or 7 months-but recently have done so with nice success by picking my spots. I do feel that short term-the risk is on the long side-as the reward is way too small here. Bulls feel safe putting small stops in, but I have a feeling that one of these mornings-they wake up stroked-on a gap down that doesn't come back. When I'm sure the correction has finished, I'll certainly be one of the biggest mooers here-and, my guess is-one of the first. I think the discount you mentioned shows where the big boys want to make their money the next couple weeks, and I'll be on the bus with them-NOT standing in front of it. Spooky

Edited by thespookyone, 02 June 2007 - 10:52 PM.

[Darris]

Spooky, good morning. I may not have been clear about the ES Gap at Rollover. This is a gap yet to be created. It occurs on Thursday June 7th between 4:15 and 4:30pm when the futures contracts rollover from June to Sept. There is no change in fair value, but a fresh supply of premium is placed in the futures front month contract, and right now based on Friday's settlements, it is about 15 pts (~1540-1555). For example, if Friday was the rollover day, I am implying that the Sept contract would then trade back to where the June contract closed at, or 1540, and maybe even 5-10 pts below within a few days after the rollover. The other gap ups that are still open in the past few weeks are May 11th, May 25th, and Jun 1st, and there are countless others over the last 4-5 years since the March 2003 low. I like to play for gap fills, but they are becoming harder to come by. Obviously, the Jun 1st gap is certainly within range, but I am starting to use a guide that once price has exceeded the gap by 2% on the upside, to just forget about it ever being filled, so the May 25th gap up is starting to lose it's significance in my opinion. On the very short term (VST), the technicals are indicating consolidation/correction the next few days, if not all of this upcoming week, IMO. The End/1st of month seasonal should end Monday around 10am, Noon, or 2pm, so if we have a good sized rally into any of these time frames, I may consider some shorts for trading purposes. Two full trading days of consolidation could set up a short on Wed morning. Will see how it goes this week, but I do not see the seasonal OPEX rally starting until the following week once the rollover gap is filled. This means the OPEX low might actually occur during the week of expiry rather than the week before. Good trading to you, and have a good week.

[thespookyone]

Thanks Darris-I have hated the size of the new premiums, in general, of late. The oih in particular is extremely expensive in terms of premium early in the contracts. In general, it has caused me ro do more index trading as the month goes on, and some of the premium has faded. I do agree with you here, in the sense that I feel the opex lows will come in the week of expiry this time around. If, however, you take some shorts for trading purposes, short term, I feel you should put one small bear symbol in fron of the two large bulls on your posts