HCPG Blog: A market in need of inspiration

Monday, May 16, 2011

A market in need of inspiration

Our interest in trading this market has dropped off a cliff in the last week. There’s no more silver tops nor Osama tops to short, nor falling silver miners to catch. The hard edges are gone and what we have now is a range stuck in congestion. Here are a few levels that would inspire us to trade actively (we still do trade every day, just a lot less and with less size) again:

ES_F has two areas which would shake things up — through new highs or first trend-line test near 1300. We’d be buyers of FIRST test of trend-line.

The second more major trend-line is near 1230. We hope it doesn’t get there but technically market is still in an uptrend as long as the major trend-line holds.

OIH is one of our favorite ETFs to trade — and it’s a complete mess right now. We’ll probably have some shorts set-up in this sector soon and nothing long until 136 area.

AAPL also is one of our favorite tells – two big levels are the trend-line break which is fast fading, and 316 support. Nothing in the middle interests us too much. Special kudos to @gtotoy for his post earnings short in the stock.

SLV is a complete muddy mess — again no interest here until at least first test of 30 (and then 28).

And here’s the game-changer, the USD. Extended market, very oversold dollar — prepare for a trading range stuck in congestion.

One of the keys to survival as a trader is hitting it hard when you have an edge and then retreating to a more passive state when you don’t. As always we’ll take scalps here and there but we would need to break out of the recent range for us to take on any trades with substantial size.