A Trapped Tape

By: Erik Swarts | Tue, Jul 12, 2011
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A funny thing happened on the way to a higher high...

The bulls got trapped - again.

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Maybe it will be as fleeting as the half pirouette the market pulled at the 200 day moving average a few weeks back. One thing is certain - the market has been in a trading range for over the past six months and is currently sitting at the mid point of that range. This is actually quite similar to what became last years consolidation phase - but tighter and softer. I say softer because although the headlines and tangible risk propellants are even more worrisome than when the sovereign debt crisis erupted last year - fear has yet to grip the tape in the same indiscriminate fashion.

Bulls can look at the price structure of the market and find consolidation within a relatively narrow range. Bears can look at the same structure and find a broadening top with diminishing participation and desensitized participants.

The devil is in the details.

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Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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