Fed Intervention Will Swoop In to Inflate Markets

CL 5 Minute & 100 Volume Charts

While China’s stock market continues to come unglued at the seams, the U.S. stock markets continue to get propped by the same old powers that be since all those squeeze-bomb sessions back in years 2000 thru 2003 and again during 2007 thru 2009.

One thing stock traders can count on when the selling takes hold… fed intervention will predictably pull all proverbial stops to keep markets up. For the active day traders in stock index futures, it is a wild ride and will continue to be just that or more.

CL 5 Minute & 100 Volume Charts

Now if only crude oil futures would take a cue from that and unwind a fair bit themselves. Curiously enough and inexplicably to all, CL remains illiquid, congestive, choppy and muted. Why? Nobody really knows.

Nor does it really matter. Only the what matters, and what CL traders see is a congestive tape rife with chop with brief but explosive spikes and slams either direction. In today’s case, scalper management kept loss nil and turned unrealized gains to realized asap.

CL 5 Minute & 100 Volume Charts

In yesterday’s case, it was a 50ish ticks total range with nothing but v-turn chop. One long sequence went +40 ticks cumulative for the day in favor… for a brief blip up and down at the spiked highs. A mere second or two was the difference between jamming a trailed stop order into those unrealized gains versus having price smash right back down before a resting stop order could adjust. Ceste.

Of course this periodic malaise won’t last forever nor even very much longer. Just modern-day markets doing what they do until they do the opposite extreme. Nothing to get nervous about, you simply go with the flow and don’t fight the tapes. Fighting markets by “working harder” per se never got anyone anything except net losses or busted out and broke.

Fed Up
Tomorrow is the usual sandwich session with weekly inventory at 10:30am est and Fed news at 2:00pm est. I’ll look at the charts and see if anything methodical exists intraday, one never knows. Thursday is medical tests day and Friday is funeral attendance day so the balance of my work week ends on Wednesday.

We’ll see what the market offers all her traders alike, and we’ll work with that potential accordingly.

For more daily updates from Austin, visit his blog at Coiled Markets.