Whatever They Want

This is The Powers That Be’s favorite time of the year — and, I’m not talking about the Christmas spirit.  The extra low volume ensures they are able to do pretty much whatever they want — including, of course, breaking chart patterns.

So, when we see a channel break down with bearish implications, we can’t just assume the “market” is heading south.  Such was the case yesterday with SPX.  It started the day by nailing our initial upside target — the backtest of the broken white channel — and then reversing to exactly where we expected.  From yesterday’s post The Big Picture:

Pre-open:  Futures are up 18; so, I’d be long on the open with a hard look at exiting around 2022-28.  9:33: That’s the first target down.  I’d close the long here at 2022.74 and short with tight stops (the SMA100 is just above at 2028.08.)  The initial objective is 2015-16. 9:58: That’s probably good enough for the short trade.  I’d take profits here at 2015.48…

It was good enough for 12.31 points (.61%) so I was happy to go to cash for the day — which, in hindsight, was a good idea.

Because, at that point, the rule book got tossed out the window and some very weird stuff happened — complete with the obligatory melt-up into the close.

2015-12-22 SPX 1 0618continued for members


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