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One of the more commonly held beliefs is that time is constant. One hour is 60 minutes or 3,600 seconds. Furthermore, the equity trading day is 6.5 hours, 390 minutes, or 23,400 seconds. This we can all agree on. However, time, when measured by price, is no longer constant. Bear with me, I promise this is going somewhere very meaningful for a trader.
Price is determined by buyers and sellers acting on emotions, psychology, and information flow. Emotion and psychology are human, information flow is mechanical. Therefore, information flow is king when discussing time. Information can be a streaming chart, a tip from a friend, earnings, a news event that has crossed the wire, etc. Understanding the history of information is crucial to understanding how time, when it refers to price, is NOT constant.
Well, good people of Slope, some nights I have a ton to say, and other nights, I have just about zilch. This night is one of the latter.
As a comment-cleaner, I will offer the mildly amusing chart below, which shows Priceline (PCLN, down about $100 after hours) coupled with the consensus among newsletter writers about whether to be long or short the stock. As you can see, there isn't a bear among them. For myself, PriceLine is one of those stocks (like Chipotle) which I love to hate but fear too much to short. I'm delighted to see it tumbling, even though I'm not going to make a dime off of it.
In any event, we'll see if any guest content comes along; I'll get my second wind in the morning.
The bulls have been stomping the bears' heads in (that, errr, would be mine) since June 4th, but I would quietly point out one sector that seems to be subtly turning – real estate. Perhaps it's dawning on at least one segment of the economy that higher interest rates won't be so peachy.
I was saying yesterday morning that we would either see a reversal at the daily upper bollinger band, or a series of small incremental moves up as SPX pushed the upper bollinger band up, and what we're seeing so far is the second option. This can last a few days though the ES 60min chart is looking a bit weak here. Here's the SPX daily chart: