As most of you know, two financial bloggers – – Atilla and myself – – are on opposite sides of the /ES trade right now. He is short, and I am long.
Now, as is also known, my tenancity with my longs pales to Atilla's tenacity on his shorts. He sometimes has made moves early, but even if the market moves hard against him, he usually holds on to the bitter end at a great profit. So this /ES short could move against him, but if history is any guide, he will direct the appropriate middle digit at the market, short some more, and come out a winner in the end.
But the basis for my long position is a simple one. Take a look at the $SPX with me:
Now check this out………..the high was 943.85 on January 6th. The neckline was 804.30. The classic targeted move would be to subtract the spread (139.55) from the neckline, yielding a target of 664.75.
How low did the S&P go? 666.79. How about that! I would call that marvelously on-target.
Having fulfilled this target, the S&P is clawing its way higher. This could be a beautiful trade (setting aside the fact I purchased this at 672 and got stopped out; cough cough; but we shan't go there).
The exciting part for me is that, if it does manage to get within spitting distance of 800, it will represent the kind of shorting opportunity that make grown bears weep with delight. I will cheerfully join Atilla in his trade if and when that time comes. If the market simply plunges from here, well, I'm wrong then. We shall see. But I think there's an opportunity for us both to be right in the end.
