Low Volume = Buy Buy Buy (SPY)
|ES_F 1 min “stairway to Heaven”|
Today the above equation proved true once again, embrace the reality of the situation. Modern supply and demand theory must be thrown out of the door in our current market because no one participant is truly aware of the real demand for stocks.
We all know the supply, which shows itself on red candles when the bears glare their teeth. When you do not know where to shift the curve you have no idea where the true equilibrium price resides. This problem is precisely what makes our current market so dangerous to those who understand price action and economic theory… to some degree…
I a not claiming to be an economist nor am i claiming to be the next Buffet, i just call it how i see it.
Trade what you see and not what you think but always be prepared for what is around the next curve. Our index’s are riddled with headline risk, especially when the headlines fly around the financial and tech sector. This is the problem in a nut shell: OUR MARKETS ARE SO HIGHLY CORRELATED VIA ETF’s and dispersion trading strategies with buku dollars behind them when one big index/ETF component moves the whole unrelated market will get a yanking.
As for today, the stairway to heaven was the ticket to paradise. Take a look at the chart above and profit from what you see. Today was nothing but a buy stop hunting mission which they were indeed found. Clearly at the close of the cash market they took the SPOOZ off a bit with a bit of size because the markets are thinner than a piece of flash paper.
Stay tuned for my late night futures update….