Wednesday, November 10, 2010

Nov 10: An ascetic no more

After too long a hiatus, I have carefully recommenced formal re-engagement with that unforgiving but exhilarating world of relative value; I've entered a trade. The above chart depicts the security along with the analysis. And though the price channel is hardly rocket science -- indeed, it is remarkably simple -- the casual reader must bear in mind that uncovering such an elegant opportunity as this requires searching through countless charts. Further buttressing my decision to risk a long-side trade is that, at the approximate end-point of the above chart, /ES was approaching a test of the pivotal 1200 level from above, the first test of this level since breaking through last week. And, needless to say, the virgin test is usually repelled.

With regards to the above chart, violation of approximately $66.3 would trigger a stop, while $67.9 or $68.3 would make sound profitable-exit points.

Incidentally, this morning's strong sell-off in Boeing shares -- and this is news only to those readers on the planet Mars -- is chiefly caused by an emergency evacuation of a 787 test aircraft (ZA002) yesterday after eruption of a small on-board, in-flight fire.

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