Diary of a Financier

From the Trading Desk: Trade Reconciliation (Week of October 31)

In Trading Desk on Sun 6 Nov 2011 at 17:32

Updating the S&P 500 (SPX) 2008 v 2011 analogue, I see that we’re an upside spurt away from starting the ultimate descent from atop this Bull Trap:

ES 2008 v 2011 daily

The weekly stochastic shows a spike back in 2008, illustrative of a bull trap. Traders cover shorts, then investors are lured back into the market, just in time for a collapse. One last “upside spurt” can put SPX on the threshold of such collapse–the trigger being a weekly chart entering overbought territory, as I’ve mentioned:

ES weekly & monthly


Without further ado, refer to the Trading Desk for this week’s Trade Reconciliation.




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