Ginormous Ranges of 2011 $SPY, $ES_F

So far 2011 has been a day trading market.  I know some swing traders with just the right mix of discipline and mental illness who’ve been crushing this market, but the majority of swing traders and trend followers have been very frustrated.  Mean reversion has been doing okay as long as you’ve been able to avoid certain guillotines sectors in the first half (Coal, Steel, Gold Miners etc.).  Some of which are having a renaissance in the last quarter.

I’ve said that we have a two-way market on our hands and I believe that is still the case.  There’s money to be made on both sides as long as you don’t fall in love with your positions.  We are in the middle of nowhere (1250), and with the news flow out of Europe, anything can happen.  It’s best to stay agnostic as the market has been making anyone picking sides look like a proper asshole lately.  But, in situations where the uncertainty is high and outcome is a coin toss I tend to always give an edge to the bullish camp.  The game is rigged, after all.

Each of the ranges below represents over 100 handles in the S&P 500 index or roughly 800 Dow points.  Surely more to come.  This is the type of market that causes traders to burn their former idols and search for salvation in new novel approaches.  They see that “nothing is working” and attempt to reboot their strategies or change their whole market paradigm just in time for the old stuff to start delivering returns again.  Beware false market idols in times of turbulence.

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