With all due respect, I think the question is naive. OF COURSE the big banks and investment houses manipulate the market! Did you ever doubt that? If you trade index futures, you had better know that as an absolute, or you will be erased (as Arnold might say). I dont trade the YM (new futures traders are steered there for a reason), but the ES rally off the open was a given and very generous. Im not sure what time you got in, but it was a Friday (meaning 1/2 size, lighter participation, exit early, etc), so profit taking after a gift is a very high prob outcome. 5 red weekly candles in a row... WHO would WANT to hold over a weekend?
They (the Big Boyz) caused and took advantage of a short sqeeze / daed cat bounce, were fat green, and took profits. Once the long move failed (12:54 EST for ES), Longs sold to lock in profits. Their sellings nudged the bears, and it was Party On!
IMHO, I suspect the time is right for a "normal correction" (at least). A close under 1300 was almost foretold. Question is, will the Govt use their execution arm (GS), to 'stimulate' the markets back up. Where is the good news? QE2 ends this month, we have a FOMC mtg coming up... pick your poison. The market have been going straight up for more than 2 yrs on weak underlying economics, a house of cards.
Bottom Line: Trade what you SEE, Not what you THINK. The futures markets are designed to sweep stops and shake out weak hands. I am a scalper, and think it is the only way to stay solvent in the coming vol....
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06-04-2011, 10:56 AM
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