The Russell futures closed right at 905 after computerized buy operations hit the market to push the price of US equities at around noon PST.
On days that are 1. not trending and 2. a little volatile, it is relatively easy to trace the price action and patterns. Today saw a nice inverted Head and Shoulders, then a reversal back down once the target price had been reached and then lower. One question that comes to mind: If the market really anticipates a Fed withdrawal from the treasury markets, why did bond prices rise?
2 +2 = 5. I write these comments everyday and give some semblance of order to the market. One could liken the market to a collection of road rules, both written and unwritten, that one discovers wherever one lives. Seattle has its published rules, and its unwritten ones. Taiwan is more complex in its street rules, at least somewhere south of Taipei. But the rules can be assimilated through some study. Do knowing the rules enable one to go faster? Not necessarily, unless one is willing to risk a scooter– as I did for many years. Does knowing the rules imply better driving? Nope. better luck? Perhaps a bit. Hopefully knowing the rules can keep you moving enough to accomplish some things. I wonder about the market in this regard. After two years, I can spot key patterns. I think this knowledge will pay off, but it is a learned skill that must be applied carefully everyday. More important on the road and at my desk are qualities of self-control, awareness, and confidence that come from experience and study. One oft-ignored rule that is causing my own private traffic jam is this: keep options positions simple; one position per underlying. Another rule is this: buy high Gamma options when one wants to day trade. They are cheaper than stocks and more explosive in their movement than options that have rich time premium.