November 9 2009 Overlay, Trades, and Commentary

CLICK HERE FOR TODAY'S LONG TRADE 4 HOURS EDITED DOWN TO 2 MINUTES VIDEO IN HD

The 1073.00 inside support identified on the prep held just after the open.

I took an unconfirmed long just after that. There was no confirmation necessary. The pull back structure coming off the overnight high was clearly bullish.

It is fairly rare to get this clear of an entry with no heat. After the area held, I could tell that the market would grind up. There was no real resistance above the market.

Basically, there was a vacuum. The price moved up slowly because most retail traders were repeatedly fading this move up. In essence, providing liquidity on the way up.

I had no problem just sitting on the trade. The hard part is the exit. I believed that market would grind up all day and probably close at or near it's high but at some point the math has to take over.

I would like to catch the open to the close just once but that would pretty much be a gamble after holding through an obvious exit area. It is OK to gamble but a blind hold is not repeatable.

Often when the market grinds like this and runs out of buyers, there can be a quick move down because a vacuum will form under the price action. This can cause a loss of 1/2 or more of your open equity which would probably result in a break even for me because I would likely not exit.

I exited just after the price thrust into my local resistance area at 1087.50. This was a logical exit.

There was no reason for me to re-enter. Even if I thought the market had 10 more points to go, re-entries in extended markets tend to just cause me to give back.

Good start to the week.