I'm responding to your last post at a higher frame in this thread so you'll be able to respond if desired.
It's building cause, either to break up into the long-term (2009) suppy or building cause to break down into the Jan 18th and 22nd demand. You're in a tight spot here. In the near term you have demand in the background. So being short you need 2 things to happen, 1) the demand has to dry up, which appears to be happening and 2) then supply has to prove itself with a sign of weakness. You likely won't get that today on the daily; not enuf volume.
I would be paying attention to your range on the daily chart.....high 56.61....low 55.61. Today it went down and tested the low and is now above it on, as you say, "pathetic volume". So now it wants to test the high of the range again. It may have already tested the high. It got into 56.46. The upper wick of Jan 25th is 56.45 to 56.61. So it got into that wick; could be close enough for a test, also on lighter volume. So it tested the low and perhaps the high
Intraday it is ranging between the R! and R2 pivots. It is now being held down by the R2 pivot at 56.38. The 5-day R1 is just above at 56.49. So you've got good topside resistance. It'd be good to see an SOW in this intraday range.to send it back under today's pivot of 55.97.
Like I said you are in tight spot, in a trading range and it could go either way. The way I would have played it would be to wait for a SOW then let it come back up to test the present range on low volume and then short it. Your way is more aggressive.
The close was not impressive (More volume and price moves down, has been case for the last 5 trading days) My big bet is on XLF options open interest, max-pain is @ $17 strike. About 3.5% lower by Feb-16th expiry. I picked STT based on the recent run-up and valuation as a proxy and better bang for you buck if you've bearish on the financials.
That's the problem with options, the added time constraint, and like fish, the longer you hold them the stinkier they get.....I'll tell ya what I think...
It's holding the highs, being supported by Jan 22nd (big volume there and on 18th). It could be in distribution or re-accumulation. No indication of which yet....no SOS or SOW. It needs to get well into the bar of the 22nd to be bearish. The sell would be a retest back up to the bottom of this recent range.
If it was more cyclical you could throw a fib time extension grid on it, but that's not much help here. So, far its still bullish until proven otherwise.
On the monthly chart in January it got above the high of Oct 2009 with lower volume, 114M vs 142M then closed the month under it. Now in February it's back above it, 55.87, the Oct 2009 high. It could be a false break out. But it'll need some volume to break lower thru Jan 22nd and 18th.