Jun 232010
 

I guess I had the hunch on the terrible new homes number on the money. 300k. The truth is this is only the beginning. With what I’m hearing through my secret channels about true bank inventories that number is only going lower. There were a couple trades worth noting today. The first was a nice trap setup on the second push down around the OL level. It really was a feel trade though as it had pushed a bit more through than I would normally like, but given the volatility there it made sense. I wasn’t looking to bet a turn there though so that distinction needs to be made. It was a pure exhaustion scalp with trade management by feel which turned into a bit more than a scalp for sure. The trap element always has such great  immediate momentum attached to it and this was no exception. You just had to be nimble though and employ good management skills there as with most pure traps. Market making as a process ain’t easy…

 The second was on the tail end of the news flush. It landed a little short of the 79 handle where we wanted it, but it was a good bet given the pivot position. It was just one of those weird cases where the pivots ended up a little above the level so it looked like it was extra bearish breaking below the pivot, but that was an illusion as it turned out. Some in our team bet it and they were right. I didn’t if you want the truth. There is no right or wrong answer. Trading is about making bets and living with the decision. I made the wrong one by passing on it. I just wanted to hold out for the pure test of 79 and we were a point shy. BTW, sorry my levels didn’t go that low pre-market as I didn’t anticipate moving below the mid 80s on the first trade. But I’m sure you can all see the clean low volume area there – a multi-session one in fact – so you probably got it too. The big traders in this case called the turn perfectly at 80. It will be interesting to see what Uncle Ben has to say about the real estate inventory if anything. Usually when he opens his mouth it is good for a 30 handle flush. LOL…

 Posted by at 2:04 pm

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