The price action of July 7 was a movie that traders have seen many times before. First, the knee-jerk reaction, nearly always overdone, is understandable because of the uncertainty. Then the euphoria, if such a term can be applied considering the horrendous world events. And then, relief that things weren't so bad. New York City and Phoenix are still standing.
If one were to get really cynical, one might say that the U.S. government can flex some impressive financial muscle when it wants to. As always though, that's a force that can't be sustained, which maybe tells us that we'll be happy to stay short the indexes as the market eases back to where it wanted to go in the first place (as it always does).
But then, we're talking cynical scenario here, and we don't want to be cynical, do we?
Dynamic Monthly Biases for July 8
All daily and monthly indicators continue to point southward. Hold shorts in all three indexes.
The bottom two rows determine the signal. Dynamic Day One trumps everythingâ€"you always follow it. When it's neutral, the Monthly Perpetual provides the direction. Click here for a more in-depth explanation of the rules.
Daily CzarChart for July 8
The bottom row provides the direction of the bias at the open: long (L) or short (S). When it's neutral, it will read zero (0). Click here for a more in-depth explanation of the rules.
DISCLAIMER: It should not be assumed that the methods, techniques, or indicators presented on in this column will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on this column are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The author, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Art Collins will be speaking at the Chicago Trader's Expo on Saturday, July 16, from 8:00 to 9:30 a.m. The presentation is Identifying, Combining and Profiting from Daily Biases in the Futures Markets. E-mail Art at artcollins@ameritech.net.
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