Morning Update: 1/12/2012

1:44 am…

The  day started out with a pop to the upside, and then a steep loss to test support. Then only to immediately rebound and did so sharply, with the NQ_F jumping from 2354 to 2371 in 50 minutes. The S&P 500 jumped from 1284 up to 1290, and then they backed and filled for several hours. by the mid-afternoon they try to rally,  got up to resistance, failed, and rolled over to test support. When that held, they did rally to new highs for the day only to pullback in the last 20-30 minutes.

I had several trades today…

CL_F- This was the  “top” set up in which price has fallen below a balance area and can’t get back above that balance area.  Shorted with a 0.50 STOP and nailed the trade. Sold 1/2 for +1.00 profit holding the rest as a swing trade currently into tomorrow morning session.

6A- First attempt was a long that I wasn’t comfortable with as internals were suggesting a possible market roll over. After several hours 6A_F did make a slight move to the upside along with the market but not that much follow through and as such I decided to scratch the trade with a small profit.

YI_F– This was a short on an immature balance area 120 minute chart. Currently still being held  as a swing trade in portfolio. End of day was down slightly.

I’ve noticed the lack of directional conviction suggesting perhaps a short term top or at lest a significant pullback may be in order. Nonetheless, as I review the 60 minute, range, and daily charts it is unequivocal  that value has been progressing higher basically from end of November to now. Reinforcing my long term bias of value going higher. Today was a consolidation day that held up pretty well all things considered. Plenty of news tomorrow initial jobless claims, retail sales, core retail sales, federal budget balance. My game plan for the open is to be patient and manage my open positions. Will look to sell YI_F into any reversal or down move in the market. I would like to keep CL_F as a swing into Friday but will take what the market gives me.  As always be aware of my risk and stick to the game plan.

Trade Well,

Olof Thomas

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