Dec

8

I Wonder … from Jim Sogi

December 8, 2006 |

The employment announcement caused the type of big spike up and down this morning that the FED day used to cause, but since it happened pre-market, the market is thin the effect was exaggerated. The micro structural effects reveal information relating to longer term price. As with the fat finger spike earlier this year that led to the eventual retracement in full of the spike and extension beyond. For example a spike reveals that people are trying to trade news which is good to know especially when one knows when there will be market moving news and that the market is thin in advance. The orders are purposefully hidden and only a few ticks on Globex are shown at each price, but, as with the prior fat finger, the quick excursion revealed hidden information faster than the eye could see. The day session eventually retraced much of the pre-market spike. The spike may have a purgative Roto Rooter type effect and cleansing with salubrious effect. Traditionally the Doji shooting star candle technical pattern was interpreted to be a reversal if at a relative top and when at 20 day , but the spike does not seem to add more oomph than any 20 day high of any shape. Nison explains however that its occurrence in the middle of a range reduces the effect, but actually recently the “spikes” have been very bullish.


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