A Lesson On Thin Markets

Finish each day and be done with it. You have done what you could. Some blunders and absurdities no doubt crept in; forget them as soon as you can. Tomorrow is a new day; begin it well and serenely and with too high a spirit to be encumbered with your old nonsense.

-- Ralph Waldo Emerson

I will quote Chris Schumacher on the topic of trading thin markets:

I suspect the thin markets are allowing some traders to push price past certain levels only to see those positions brought in immediately, creating the sharp spike reversals that we saw Wednesday. The sharp spike lower from the open led to a quick spike back to just under 1670. Another quick spike over 1670 led to a final quick spike lower before the close. Quick spikes are not indicative of a smooth and heavily traded market and they don't offer confidence for bias creation. They are more for fast-fingered traders.

Thursday's trading session should offer more of the same. Although the 1670 level failed to act as a support again, I'm not quick to jump on the bearish bandwagon for the simple reason that we saw similar action last week that led to another move to the 1690 magnet level. Ideally this will happen again Thursday. If 1660 holds as support, a move to 1690 would throw the wrench right back in the face of the bears. As the coach in the movie "Dodgeball" might say, "If you can dodge a wrench, you can dodge a bear trap."

I'll be looking for price action Thursday to hold this level and push the index back near 1690 by Friday. Should the index close under 1660, then my bias will have failed.