Forum Clusters 120104.xlsx
After its gap up that allowed for an excellent reward-risk short entry, IWM went nowhere and fell continuously below its intraday VWAP after 11:00 am. This left the average buyer a net loser for 2012 so far… This is the first hint that professionals want to sell into strength.
The 20 DMF finished net negative for the day with a rush to the exits at the close by large players. This is the second hint that professionals have no plan to accumulate long positions from here.
IWM is now stuck between two messy support/resistance clusters which are mainly neutralizing one another. The LT/ST settings still favor the short side and I keep playing it light personally. I want to see a failure of support at the long timeframes pivots below before increasing my position.
Contrary to IWM, GDX spent most of the day above the intraday VWAP and, after a brief lunchtime stop-fishing expedition, roared higher into the close on a very strong money flow.
The average buyer in 2012 is here a winner, professionals are buying and we are now 2.4 days away from a potential sell signal. A rather weak floor support/resistance imbalance can ease a pullback today which I expect to be bought again by large players judging by the GDX robot money flow and the LT/ST settings and odds. Our trailing stop was raised to 49.72.
I keep playing this setup aggressively and will avoid selling any leveraged position too early.
Billy
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