| Bob Byrne is a full-time private daytrader with 10 years’ experience. His trading relies on technical analysis and focuses primarily on energy and metals.
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Monday’s trading saw the dollar drop, pop, and drop again. The pop was caused by something uncle Ben (Bernanke) said, but once everyone remembered that no one in the government really cares if the dollar continues to head south…it was back to selling the greenback.
The Emini wasted little time surging through the 1100 mark and heading straight to 1110. I continue to think the two key short term levels are 1114 and 1138. I shorted SPY today in my swing account on a bet that we have seen the highs for the week. We will know soon enough if I am right or not. The SPY short is relatively small as I am willing to add to it near 1114. However, I would be inclined to cover if we look to close much 1114 on a daily basis. I will certainly mention on the chat if I am adding or covering the position.
I do not trust the market at these levels (for the remainder of the week)…so any long trades I take are likely to be short in duration and small in size. My current thinking—we see all rips (pops in price) sold for the next several days (into options expiration) and then another leg higher beginning next week. I think the next leg higher would take us towards 1138.
Unless otherwise noted, my standard protective stop will be the prior intermediate low (if long) or high (if short) on a five minute chart. Also, if stocks you are interested in gap up or down and “get away from you”…be careful about chasing price momentum.
The oscillator you see in many of the charts I post is the stochastic oscillator. The settings I use are 9, 3, and 3.
BVN
EGP
HMIN
HSP
RRD
TRW
WFMI
Disclosure: Short SPY
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