The 100-day SMA Sprint

There seems to be a new Olympic discipline that’s quickly gaining popularity – the 100-day SMA sprint. As a matter of fact I’m seeing this one on several fronts right now as traders across the board are being exposed to be a bit of mid summer heat. I recommend you crack open a cold one, put on your game face, and keep things frosty.

Here’s coffee – all entangled in its own Maginot Line. We may need some wire cutters to get this one out. The tough part about being long here is that the 100-day SMA is slowly dropping. So if you’re using that as your line in the sand then you need to disciplined and stick with your original stop. Yes, it is possible that she drops some more and then takes off without you. This will happen many times in your trading career and it’s something you need to be Zen about. Don’t take it personal – get even by banking coin in another contract. If we get lucky she’ll either hold or we get another reason for entry (e.g. Net-Line or inside candle, RTV buy, etc.

However my gold metal contender for the 100-day SMA sprint I reserve for my intrepid subs:
More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

And rather ironically I am talking about gold. The 100-hour SMA just got taken out but it seems the 100-day is still in play. If you are long here then you are probably looking at that upper diagonal for support and under normal circumstances I would agree. However there is a little problem…

And it’s the fact that we just got a short entry via yesterday’s inside day. And that’s an inverse entry and I will have to go with that one for now. The good news about this is that we have two competing setups. If gold continues lower and actually drops below the 100-day then that’s just fine with me. If it reverses and clears the 100-day SMA then we probably are in for a good ride as well. So let the better setup win!

Sugar was also testing the 100-day for a while and then finally took off. Just to return and it’s now testing the 25-day SMA after giving us a long entry yesterday. So yes – it’s acting up a little and we should probably put our stop below 22.41 and then let the dice fall where they may.

AUD/JPY is also doing its own 100-day SMA dance. And quite frankly it’s getting a bit old and it’s time that it clears it once and for all. Right now we have that and a NLBL below – the latter of which is good for another day. We do nothing until either our stop is hit or we finally take off.

Ole bucky – I take it you remember the ID + NR7 setup yesterday. Today’s breach has me short but it could be a fake out. So if it pops back above then I’ll head back into cash and wait for new instructions.

On the equities front I have no new opinions except that our P&F target has been touched – period. Either we reverse here or the tape gives us a good reason to add new/more longs. I hoped for an inside day but that apparently was not in the cards today. Until something interesting happens I recommend you stay away. There are better/easier trades out there – and it’s okay to realx and wait for better weather.



Tender Loving Setup Care

Some of last week’s setups are in need of some TLC and despite the rather annoying tape there are handful of new developments worth sharing. As I only see a summer skeleton crew I decided to make this a freebie – so leeches everywhere rejoice! ­čśë

Let’s start with currencies – the AUD/JPY is painting an inside day + NR4 combo. I would prefer seeing a continuation upward after last week’s NLBL breach, however if we drop through today’s lows tomorrow then I may take a few positions off the table. A drop through that NLBL would of course put us back into shorts.

Another inside day + NR4 combo over on the CAD/JPY – you know the rules. If not then please consult the cheat sheet which is available from the menu bar.

EUR/JPY may have gotten you long on Friday but you should have closed or reverted into a short by the bell as we remained below that NLBL. And that Net-Line will remain to be our long/short separator until Wednesday.

EUR/USD is making our life difficult today – today’s drop represents a reversal into short positions, assuming of course we don’t push back above by the close.

Ole’ bucky meanwhile is painting a trifecta – an inside day + NR4 + a NLSL retest. It trades like a regular ID setup but I would love love love to see a push higher here, which would also represent a NLSL reversal. Could really shake things up. But let’s not have wishful thinking get in the way of a good setup – we’ll take this bugger either way.

Cable is also painting an inside day + NR4 combo today. Same rules – you know what to do.

USD/CHF is mirroring the EUR/USD and we are now long, again assuming we don’t drop below 0.9777 by the close of the session.

On to commodities – crude has me back in cash until it picks a direction.

Gold lagging behind silver today – very interesting. Either way it’s also painting an inside day + NR4 combo – trade accordingly.

Natgas just breached a NLBL – which represents a long trigger. Of course after a long candle like this anything can happen, which is why the NLBL is our fork in the road for either playing continuation or a reversal.

Sugar looking pretty sweet as it just reverted its Thursday/Friday NLSL breach. If this holds it could grow some legs. But bear in mind that the NLSL expires tomorrow so unless we drop back below today we won’t get a short entry if she drops below. But our stop below that NLSL still remains in place no matter what.

Treasury futures – 10-year flavor: I would not take this inside day as the candle is clearly too long. BUT I would exit any short positions from last Friday if we push above today’s high of 134’175 tomorrow.

And then there’s that beautiful NLSL reversal on soybeans – you may recall that inside day setup which was followed by a little fake out attempt on Friday. I have recently started to take 2+ day breaches as long as any fake out attempts have been small (e.g. just a few ticks) – no stats on it yet but I think it’s technically permissible.

That wraps it up folks – keep it frosty and keep it clean. Managing positions through days like this are part of being a trader – nothing glorious and probably more work than it’s worth. But they are part of the game and it’s best to do like Data – turn off your emotions chip and simply follow the rules.


Long Term Update

The Olympics are on and I couldn’t care less. Let me get this right: You train your butt off for over four years and even if you manage to win you’re not getting paid? While everyone else involved makes out like robber barons? By the way, word has it that even those ‘gold medals’ barely have any real gold in them – they’re made of 92.5 percent silver, 6.16 copper and 1.34 percent gold. Cheap bloody bastards!

Well, if you’re not glued to watching women’s gymnastics (we know who you are) then step into my lair for for another long term chart roll call. I’ll even throw in a few P&Fs for good measure.

Let’s start with the spoos, which as you may recall touched monthly support in June – and then weekly support last week. Thus far both have been holding. Which of course is no guarantee they will but looking at these LT chart I simply can’t wrap my mind around the endless bearish chatter I keep coming across. If we were were painting below both of these markers, then we’d have something to talk about. But as for right now the uptrend appears intact. You may also remember my momo update from last week and little has changed on that end.

FWIW – when it comes to equities I don’t really have much love for either the upside or the downside right now. Which means that equities will remain a secondary market for me until we either see a ramp or real sell off.

Someone mentioned the XLF in the comment section and I decided to produce a P&F for it. what I’m seeing right now is a complete lack of activity – it hasn’t gone anywhere since it triggered that high pole warning in May. But the bullish PO remains intact and┬átechnically┬áspeaking nothing bearish happens until that PO is disqualified.

More where that came from:

More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

Speaking of gold – not those diluted metals but the real stuff: It’s been holding the 100-week SMA plus two weekly NLSL. On the monthly side we got near that the 25-month SMA but never even bothered to test it.

The P&F still dons a bearish PO but if we push above 1630 I expect that to change and flip to a bullish PO. As you probably know we already are positioned to the long side on the daily side and are waiting for the final breach which should accelerate things on all fronts.

Silver has been testing a monthly NLSL for three months now – which incidentally will expire at the end of July.

The bearish PO has been met and long term support was never taken out. Well, there are a two more days left this month but at this point a few long positions with a stop below 26.5 may be good medicine.

Crude breached two weekly NLBLs earlier this month and decided to throw in a little retest to shake out some of the weak hands. Both held however and it’s looking bullish now.

There’s a bullish PO of 100.5 (wow) on our P&F and although we still need a breach of 93 as confirmation it’s looking pretty positive so far. Now compare this chart with the XLF and you’ll see how much activity we’ve had on the commodities side. The highlights by the way are monthly numbers – as you can guess 6 stands for June and 7 for July. This practice provides P&F charts with a bit of time context. In case you wonder A B & C were assigned to October, November, and December respectively.

The EUR is still fighting to paint some signs of a long term low. There’s a weekly NLBL I would love to see breached – well, honestly I’d love to see it fail as I earn in Dollars but who cares what I want!

The P&F has met its bearish PO and is even painting a low pole reversal warning. That is positive and another reason why we are looking for reasons to be long the EUR.

The AUD/JPY shows us a touch of its weekly NLSL – which however held up nicely. The monthly panel reversed not just one but two NLSL and we may even conquer that 25-month SMA. That is pretty bullish in my book!

As you can imagine the FXA is looking bullish and we are getting close to our price objective at 105.9.

The Yen’s P&F – on its own also looking bullish, which of course means that ole bucky took it on the chin again. That was a nice break out after coiling up for weeks. New bullish PO of 132.0 – wow!



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