Mar 022011

As I wrote yesterday, I’m watching both Bund, Stoxx & ES.  I’m short the stoxx with a partial position left.

The bund had two negative days but still manages to stay inside it’s balance area.  It’s now testing this in after-hours trading (currently at 123.75).

First, this makes a great long setup so I’ll be looking for a long tomorrow, with 124.10 & 124.60 as targets.

Second, if the bund gets accepted in the previous balance area, then I’ll look for a short with a target of 123.70 and then 123.51.  And that will also be a warning that ES could bounce up.  I still think ES will test the gap I mentioned but lately I’m forcing myself to consider all alternatives.  Can’t be too prepared.

Today’s action in ES was balanced and that’s to be expected after a monster move down.  The move outside this balance will be key.  And we can balance some more too.

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