By Sell Puts
The stair step pattern after ISM came in "positive". The market looks as if we were going to have a Gap and Crap trade the first half hour as we sold back. Pretty sneaky if ya ask me, though I am im sure you have seen this pattern before. I will admit i was short off the open, though when we hit support and got a strong NYSE tick off the 111.50 level i covered and got long a small feeler position.
This pattern gets people short who are fading the gap up, the trade works until a massive candle comes in pushing the price back up to the opening gap price then pops through that level which was 112.24.Once we broke through high shorts clamored to cover perpetuating the move higher.
Take a look at the chart to the left, you can tell very easily we are going to trend higher at least until the daily noon sideways channel forms at the VWAP. As of this post, 11:15ish the market has remained flat for about an hour, pretty standard movement after a big spike or volume places the index's on a shelf which they cannot fall from or rise from without a staggering amount of volume. Lets see how it goes, i posted on Friday stating i felt the market could make a move significant move soon or even Monday, i was leaning to the downside though i did say she could go either way, lets let this pattern play out for a few days. This will allow time for break out confirmation or reversal indication.
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