Friday, July 17, 2009

Trade 28 setup: SP500 - getting my feet wet on the US index

7 days with no real trades, no good situations (or hesitiation). Funny how the Jakarta attacks has caused no real negative price action in the markets - LOL, everyone has become desensitised to terror attacks?

I've shorted the SP500 index for the first time, and it's a measly 5 contracts with the following reasons -

1. Technically, the market has been moving up for the past 4 days, and very fast - it has reached a point of resistence that I feel will create range bound conditions, or at least a slight hesitation in the current upswing. My stop loss is just above the 947.5/ Target 924
Not all the technical signals are there, namely, the 5 minute trend is still going up, the MACD is still rising, however I doubt momentum alone can keep prices rising again this afternoon.

2. The general sentiment seems to be for profit taking - and the housing numbers may come in weak today (everybody knows US housing sux right now, although last night's housing index came in positive) - this may be where the slightest negative number or just the fact that there's no much news, might be the reason people are waiting for to selloff hard. Obviously if the numbers come out really good - I'll probably see my position stopped out.

3. Citigroup numbers has the potential to come in with really bad numbers (despite every seemingly cooking their books somehow).