this morning, I\'m bullish from here (1115) *NM*
 

still bullish, but getting bored now (1121) *NM*
 

mechanics long, discretions flat, newsies watching *NM*
 

still bullish, discretions scalping, touchy now... *NM*
 

they broke an egg - but...
 

By breaking an egg, I simply mean there was one "expected" group of correlated buyers under the market, due to come in, and there was an equal-sized targeted, customized pocket of long front-runners, in anticipation of them. But this invisible pocket of "clients" didn't show up on schedule, so they broke the egg of inventories that had been built to mirror them.


As hard as the front-runners try to coordinate handoffs on the way up or down in one direction or the other - and as symmetrically and non-redundantly as they try to reflect buyers or sellers getting left behind - eventually somebody's invisible target pocket - whom they're tracking like radar - fail to come in behind them like clockwork, and they have to bail out in a vacuum with nobody to meet the other side.


This then triggers the next group of front-runners, and the next group, until the whole crystal falls out of whack, and it becomes impossible to tell which trades are lost front-runners - having lost track of their offsets - bailing and reentering, and which trades are their lost offsets suddenly showing up at some random spot.


So, the first error gets handded off, triggering new errors, and ricochets around for a while, until the market spikes to a new near-term low or high. At that outer point, external buyers or sellers are finally introduced into the system to make up for the original missing pocket, and the error is finally passed like a kidney stone. And then the coordinated reaction-and-handoff dance between atomistic front-runners can start to reassemble itself.


But I'd sit out this kidney-stone handoff, and just ride this long at least 'til lunch! I think the pocket of near-term buyers underneath the market - camouflaged as it may be - is still there.


eLROY

blah - inventory symmetry reached (1121)
 

There should be about the same sized eggs hanging above and below the market now - at least until after lunch when they introduce some newcomers.


Of course, you can always try to trade the rangebound chop back and forth, as the opposite-side eggs try to find each other and offset in alternating waves.


Course, if another new pocket starts to emerge inside this chop, it's almost impossible to detect it. Usually, the market doesn't rise or fall in such an orderly, revelation-inventory-handoff pattern like this morning, and there are eggs breaking left and right.


With all those eggs breaking, and everybody triggering each other going back and forth, it's tough to have any idea what you can latch onto and front run - and then suddenly the market gets away from you.


I still think that missing pocket of buyers will show up after lunch, but I have to go now.


eLROY

final note...
 

If you're not short on capital or time - and watching the market uninterrupted doesn't put you at risk of burning out your thinker before 4:15 - you should probably just stay in your position when the market reaches inventory symmetry, or at least randomness.


After all, when you have lost any clue, the next sign could just as likely come in the direction you're already in, and you'll save a commission and slippage reentering:)


eLROY