Wednesday Evening

SPX Daily

The bulls stepped up again today and defended the 50day on the S&P500. If they are going to get a rally started, it should start tonight in the futures. If we rally into the end of the week, I'm expecting a move towards 1400 into the end of the month. If the bears take over and get a solid close under the 1335ish level, I'll be watching the 1310 level closely because I think we will be at a high risk of pushing back towards break even on the year (1257ish). Overall, I get the feeling we're at a pivotal moment here... up or down, I want to be ready for it.

Wednesday afternoon

The power of the void

This is one of the best things I learned from spending some time in Pristine’s trading rooms.

Price moves easier when it has no nearby support / resistance to run into.  The lack of reference points leaves a “void” on the chart.  Traders don’t have any obvious point at which to place their bids or offers, so price tends to blow through those empty areas.

Voids can be created by :

1)  Gaps.  Once price enters the gap, it is likely to fill.
2)  Straight up or straight down moves.
3)  Time.  A long sideways consolidation leaves a void both above and below.

When you see a nice void, just think easy money.

Wednesday Morning

Gator's Chart of the Day: BWLD

I've had that white support/resistance line on this chart since last year and it's still relevant.  Below is a shorter term view of the same chart but I wanted you to see where the white line originated.

Looking for a low risk trade right here right now

This may not be a high probability trade but it will be very low risk.  The support line is very clearly defined  and very close by.  While it's difficult to see, the volume has been increasing for the last three sessions and both Monday and Tuesday were above the 50 day average.  Tuesday may have been enough to finish the selling.

The Trade
I would look for an early entry but only if the price is above Tuesday's intra-day low (81.55) at the open or within the first 15-20 minutes of trading.  If not then too bad so sad.  This won't work.  If the entry does present itself I would take a 1/3 or even 1/2 position and plan to add quickly.  This is because the stop will be very tight so the risk is small.  The stop should be about 81.50 so the risk should be 2% or less.  The upside target is inside the upper Bollinger band which should allow a $7 move or about 6:1 reward/risk.