They’re Back… Short Term Speculators That is!

Published on: February 27, 2018

You know the market is returning to normal when traders start complaining about how slow it is….

In yesterdays blog post, we discussed getting ready for the same ‘plays’ or behaviors in the market that have been largely missing since the 5th Feb.

This video, from yesterdays open shows a good example of that. We’d market out an area of high volume leading into the open and then we bounced around that area in the first few minutes. This is common behavior in an orderly S&P 500 market.

At both extremes, we saw the market get to a point it couldn’t ‘eat’ though. Then it gave up and went in the other direction.

For sure – some will argue (yes Phil – I got the email ;-)) – that the liquidity isn’t back to former levels yet and I agree 100%. But the behavior is back, the short term speculators are back – or rather, the S&P Futures are being traded in the way we’ve become accustomed. We are no longer seeing the market sweep 10 levels in a second, we are seeing headfakes, volume spikes, icebergs – common & tradable behaviors.

So what does this mean? Well simply that if you’ve had time off the markets because of the extreme conditions, it’s time to come back and have a look again. If you were looking at Order Flow for the first time, then look again because the market is more orderly now.