Thursday, November 04, 2010

Divergence between the YM & the ES

Was a so-so night for me as small pre-marlet losses took out some steam in my trades and at the start of the trading session, I was concentrating on re-couping them. I finally did, but not before getting frustrated with a couple of early trades that was postive by -1.50pts, only to turn negative and hitting my STOP by -0.25pts. Eventually, the night ended with just a +0.75pt gain. Rather decent I would say, as at one point, I was down by -2.25pts.

Looking at the PRICE action of the ES & the YM, the is some divergence going on. ES has continued to move higher, powering through 25th Oct's high and it actually hit a high of 1198.00 last night, just before the close. But for the YM, it is still labouring to cross the 25th Oct high and I fear that if this continues, the YM may lead the ES lower. A sell-off in the YM would simply negate the divergence altogether as the ES would simply follow suit. In the meantime, I would be mindful of this, before getting overly bullish in the market.

Again, for the record, only +0.75pts was achieved last night...

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