Back in the Saddle Again

4 Jan

SPY Monthly

Today kicked off a great start to 2011. Typically we don’t see the majority of volume return until after the MJK Jr. holiday, but a good way to gauge the day ahead is to look at the first 30-min bar of the S&P Cash Session (9:30-10:30 AM EST). Over 150,000 contracts traded is a signal of good participation, 200,000+ is great participation and a very liquid market, anything below 150,000 is cautionary and below 100,000 is a no trade day.

For those who feel they missed the bullish move of fall 2010, no need to rush into loading up here. As the saying goes, “When the VIX is low, lookout below.” Let the market retrace before contributing to new long term positions. This was a pretty interesting article on the current economic state and the fact that we may be in the Eye of the Storm, so to speak.

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