Wednesday, October 1, 2008

Delta positive at the top of the hour

Just like yesterday we have additional buying at these levels. Rarely you see a positive delta near the lower 2nd deviation of VWAP as seen in the B & C period today.
Remember that yesterday was an inside day. Finally we have some semblance of normal trading. However the volatility is in wait and come in at anytime a significant break in news surfaces. So the key is to be careful. Prior sessions has been very choppy on the profitability front. I remember a short that stopped me out at entry by 2 ticks and dropped like a rock and then Doc posts the perfect post.

Dips can be bought today if the financials continues strengthen. The inside day breakout is a small small possibility but until the end of lunch time we might not see the volume. Currently, it is not supportive of that bias. we could simply rotate and balance inside until the news (higher probability).

Tuesday, September 30, 2008

A different mood

Todays market mood is opposite of yesterday before the failure of the bailout vote.
Note that the market had a bid delta negative. Today we are the opposite: 52K positive delta indicating covering and over 30K positive on the big delta. Financials are balancing as well and the PNF chart is not trying to make new directions. Market is comfortable here for today until the next directional news. VWAP provided two small buying opputunities and the price action is not too volatile. Careful of any whipsaws if there are any political comments or consensus. Time is running out.

Monday, September 29, 2008

Bailout woes

Market tanks on possibility of a rejected bailout package. DJ down 700 points.
Rescue plan fails vote.

Bottom of the hour

Lunch time! The S&P emini has indeed mananged a flush move to the downside. And we are at the support level of the 1160s. There were some buy response that came in at 9:28 and 9:33 PST in the chart below. Selling pressure has subsided and at the POC of the day we have a 2 way auction with some shorts covering. Note the delta is at -55K.

The 1180 area is key as it is VWAP, Dev VAH as well as a minor resistance today. This flush move to the downside gobbles up any long position from the 1160s from last week and prior session. An action market makers and locals love to orchestrate. Financials are still drag until now. We need financials to turn around significantly less than 2 hours for a true reversal. Regardless of indented direction there is a high likelyhood of price whipsaws. Given the negative delta we are at. We need a significant amount of covering and buying for a reversal. Currently, odds favour resistance at VWAP. If we get to VWAP it will be the nature of the buying or covering that determines the conviction. A significant volume in covering may change the game. So far though the big contracts are still -18k negative.

White house announces that they have enough votes for the bailout.