Emini Trading Update – Monday 18 June 2012 (17:20)
Weak rally today and we’re lining up for cyclical resistance Tuesday or Wednesday on a whole bunch of charts. The reason I keep on banging on about this is because if we’re in a downtrend the resistance level will print quickly and we’ll move away from it strongly. So, essentially no overshoot. And if that happens then we’re going through the lows at 1,250 and there will be howling in the streets.
When we have a rally back away from the lows the general public gets complacent, thinking that the worst is over. Although they got scared at the lows and saw their equity positions really hurting, they feel better as the retracement progresses and start thinking to themselves they did the right thing by not panicking and dumping their stock.
Meanwhile the Professionals are exiting their Longs on the way up and getting positioned Short. So they’re prepared and profiting when the turn happens.
So this will be the marker. Quick turn and strong move away and we’re going down. Or slow turn, hanging around the resistance level and just a little weakness will mean we’ve done enough damage on the downside and we’re preparing for a stronger rally.
So that’s what I’m looking for.
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