Tuesday, September 6, 2011

High volatility, bearflag not broken yet

US-markets were closed due to Labor Day, but in Europe the action carried on. With lots of bad news out in the Eurozone, and US-data not that great either on Friday, futures travelled a lot lower between Sunday evening and Tuesday morning.

The indices came off the pre-market lows and spiked on the ISM-numbers, only to reverse at the opening level. The bounce brought us above the morning high and over pre-market highs, even taking a shot at Friday's lows.

Translated to the S&P-futures that gives: up 15 points, down 15 points and up 27 again... (see 5m ES-futures chart above) Volatile enough for ya? The big gap nearly closed and for now the lower trendline of the assumed bearflag, still holds (see depicted daily chart of DIA below).

Gold gapped higher but a strong intraday reversal followed. A double top is possible on the daily chart. Silver was acting much weaker than gold while oil moved almost parallel with the market for most of the time.
EUR/USD at 1.40 now, the dollar is moving strong in the last 4 sessions. The euro finally gets punished after all the bad news from the eurozone lately, even despite a sharp spike up on the CHF-news.

Despite being down quite some intraday, the inverse ETF's in my portfolio still ended up between 1% and 5% in the green. I moved up my stops, still leaving enough room for a pullback. I sold half of EDZ at 2R. All trades are now half the starting size, i'm looking to add bigger size when price/action/volume seems right.

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