Is it Time to Rotate Lower?

by Larry Levin

Do you know what pushed the market lower yesterday? Well if you listen to the news they will tell you higher oil prices are to blame. But you know what?

It's not oil prices, and it's not concern that the Fed is not going to lower interest rates. The real reason is this market is simply running out of buyers for right now.

This market is due for a push to lower prices and here's how I know that's true:

In the S&P pit the last several days I've seen the same thing. Every time we move lower, we get big institutional buying taking place.

Now that buying doesn't always push the market higher, but never the less it's still coming in the pit.

But it's not holding up and we are starting to "rotate" lower. This tells me the market is slowly running out of buyers and we need to test some lower prices before we can pick the rally back up. Keep an eye on 1550 in the S&P futures contract and see if we stay below it for a little while.

Real Time Trading Signals*for

Trade Date: 10/15/07

E-Mini S&P Trades*
(before fees and commissions):


8:34 B/A Buy 74.50 = -1.75 all

9:07 VA Buy 67.75 = +.75, +.25, b/e

9:41 ENG Buy 67.50 = -1.50 all

1:32 OTF Sell 55.75 = +.75, b/e, b/e


E-Mini Russell Trades*
(before fees and commissions):

1) Buy @ 8:30am at 845.5 = +.5, +.5, -1.0

2) Sell @ 8:53am at 843.0 = +.5, +1.0, +2.5

3) Sell @ 9:37am at 841.5 = +3.5 (1 lot)

4) Sell @ 9:54am at 837.6 = +2.0 (1 lot)

5) Sell @ 10:04am at 835.5 = +.5 (1 lot)

6) Sell @ 10:26am at 834.5 = -.9, -.9, -.9

7) Buy @ 10:47am at 836.3 = -.5, -.5

8) Buy @ 11:01am at 836.4 = b/e, +.5, +1.4

9) Buy @ 11:23am at 836.3 = -1.2, -1.2

10) Sell @ 12:50pm at 831.8 = -.5, -1.0, -1.0

11) Buy @ 1:34pm at 831.4 = +.5, +1.0, +1.5

12) Buy @ 2:06pm at 832.7 = +.5, -.5

13) Sell @ 2:20pm at 831.5 = +1.0, +.6

14) Buy @ 2:38pm at 830.3 = +1.7 (1 lot)

15) Buy @ 2:54pm at 832.3 = +3.0 (1 lot)

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