Read this from the Dynamic Hedge blog, buy a megaphone and shout it in the streets:.. or at least post it in the comments section of one of those whiny blogs.
Hand Crafted Short Squeeze Reversal
For those out there who wanna cry foul, I’ve got news for you: program trading is not market manipulation or anything immoral or illegal. Remember, this is the game you signed up for. These guys have way more money than you and are MUCH better traders than you. Do not whine about how it is somehow unfair or the game is rigged. Of course the game is rigged.
Now read the whole post, it is well worth it. If you are a beginner, or your trading is not where you want it to be, the post is of enormous benefit. It just tells it likes it is, from a professional trader. I don’t think my typing is accurately conveying my feelings about this post from Dynamic Hedge. (Language warning … ) It is a F***ING GREAT post!
The writer at Dynamic Hedge blog is referring to the price action on Wednesday March 23 2011. He provides a chart on his post, here is my basic 1×1 PF chart for that day, circled:
A lot of the time I post on the garbage that is written about the markets. I know the garbage sort of stuff shouldn’t bother me, but it does. That is one of my weaknesses. So it is great to post a reference to this Dynamic Hedge post, a really good post.
OK – now the only thing I would add to it is this. Don’t let the references to ‘program trading’ distract from the main message. In the days before program trading, bigger, better traders, or simply those with some sort of firepower on the day, could do similar sorts of things. These sorts of movements have been around forever, and always will be. There is even the possibility to consider that some of the buying was a manifestation of the continued buying that has been prevalent in the ES for a long time now. Which would have helped the short squeeze along. Worth considering…
So, at the end of the post, the only question really is, what are you (and I) doing about it?