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.

–Romeo

Advertisements

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s