BOTs remained unchanged going into the US market with PA trapped in a narrow range between the BO5 levels. The overall bias was bearish, but we saw two key reversals for the bulls signal at B27 and B64.
Tight ranges tend to produce extended break outs. The daily still hovers at the bull TL and the 50CB (horizontal TL). Pros seemed to have kept an inordinate amount of cash on the sideline. We are approaching the 4th Qtr., the traditional best period of the year. But we have those contrarians still holding out.
Scenario1: market must correct down (1410-1370) to allow money to flow back in to create profits in Q4. This would precede a push into the 1500's. This can develop with a release of the accumulated negative information about Europe, already news, but with a new spin to drop the PA anchor. This also helps October fulfill it's mission to be the month of surprises.
Scenario 2: Money tires of waiting and we get the 1500 sooner, then a contraction.
We watch the Bots, signals, and PA and trade the market. To protect longer term investments, Put action will be initiated when the contraction surfaces.
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