The Dow successfully creates another 'bulltrap'

As discussed in Relief rallies on soon-to-be Ireland bailout or a bull trap? Watch HFT bid/offers for 'grind' patten and the day/s after also discussed in this post No relief rallies re: Ireland bailout (22/11/2010). The Dow, amongst other indices, have been successful in creating 'bull trap' trading environments in the last month of so with the unusual 'grinding' of ranges once the index tops out. The grind occurs after a rally, usually from marked up distribution on lowish volume, in this case at 10.10am ( when the rally started. In which the range then grinded (on low volume) until the close of trading, obviously attributed to High Frequency Trading (HFT). It then appears (towards the end of the close) that a flood of 'dumb money' poured in which was the large volume spikes prior to the close, either that or POMO (Permanent open market operations via the Fed) - which is essentially dumb 'hot' money.

Lethal.

The Dow's topped out range is between 11000 and 11400, refer to *pivot points and the trading ranges, with the *50ma being the 'grind' HFT support. With the way this market is trading and the risk 'on' and risk 'off' influenced interaction which occurs in a very short time scale, I don't think there will be huge 100+point rallies breaking through the 11400 resistance. Instead a sell on the open of next day of trading.

Refer Dow charts:

Note *50ma, and the price stabilizing along the *50ma support, also note pivot point ranges. Also note OBV and ACD trending downward.



Dow with a marked up distribution rally (lowish volume) at the start pf trading, a stabilized 'grind' patten on low volume, then a spike in volume at the close of trading.