Lately on #TradeBuddiesLive we have been keeping an eye on spreads, and man there have been some interesting things going on. Here’s some charts I’m very much interested in. Tune in on today’s live show for more info.
OMG! The most insane action I’ll probably ever see! After 4 or so Limit Up’s hit we now see 2 Limit Downs following the Thursday open which was an instant gap to limit up, CRAZY!! I watched the price action on my ladder all morning on Thursday and man was it interesting to watch the big dogs slowly chop away at the limit orders that were stacked on the top. After a few thousand contracts were filled there was finally a relief and then the stops just flowed and you could watch them taking their profits as the top blew off, thus being a “blow off” top. A lot of times the following day will be a doji and them a quick double top before a larger move down but the selling just kept up with all longs liquidating. It’s impressive to watch.
On the chart we can see the gap fill following the contract roll which was a $14 difference then the bog pop. Gap up a to limit up is ridiculous and I don’t think I’ll ever see anything like it again.
And now we see the lock limit down and none of the longs can get out and are trapped.
We could see another big day on Monday cause there could be another considerable gap but a lot of times you’ll see the limit orders are set to “day” meaning they will cancel at the end of the session so right at the close you will sometimes see thousands of contracts “pull” (removed). Going from Wed to Thursday I don’t believe think they pulled a lot of them or they were set to “Good Till Cancel”.