Market Anthropology: A Trapped Tape

Tuesday, July 12, 2011

A Trapped Tape

A funny thing happened on the way to a higher high…

The bulls got trapped – again
Maybe it will be as fleeting as the half pirouette the market pulled at the 200 day moving average a few weeks back. One thing is certain – the market has been in a trading range for over the past six months and is currently sitting at the mid point of that range. This is actually quite similar to what became last years consolidation phase  – but tighter and softer. I say softer because although the headlines and tangible risk propellants are even more worrisome than when the sovereign debt crisis erupted last year – fear has yet to grip the tape in the same indiscriminate fashion. 

Bulls can look at the price structure of the market and find consolidation within a relatively narrow range. Bears can look at the same structure and find a broadening top with diminishing participation and desensitized participants. 

The devil is in the details. 

I just joined Twitter. All my active trades and occasional market musings are disclosed in real-time here

(Position in UUP, AGQ & SPXU)

Disclaimer: This is not investment advice. Always do your own due diligence. Erik Swarts is not a registered investment advisor. Under no circumstances should any content from this website be used or interpreted as a recommendation for any investment or trading approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor.