The Big Picture

Exactly one year ago yesterday Volar posted a his presidential election chart. Although he’s been sorely absent in recent months his chart (among other things) has served us very well:

I have asked him for an updated version and he graciously donated the whole McCoy:

In the past year this chart continued to be eerily accurate - including the correction between April through June I may add – albeit a little delayed. Here’s Volar’s comment:

It still appears to be working and (1) looks like we will enter the next cycle with (A) obama/look at intrade and (B) with a bull momo cycle. I believe that is not very bullish for next summer- actually bearish IMO.

Here’s a new one – the cycle momentum index. Basically its a ratio between price and the 200-day SMA. The reason this works is because we may deviate in price intensity but relative to the 200-day we maintain relative momentum.

Now THIS is absolutely fascinating. The ole’ number cruncher flipped the *bull momentum* cycle years vertically and it’s a match! That is truly evil – could trading LT swings truly be this easy?

Traditionally a rising stock market greatly benefits an incumbent president. Given the latest Intrade readings Obama is almost guaranteed to get his second term. I’m not having an opinion here as I despise both candidates equally (for different reasons) – however this almost assures that Bernanke will continue to helm the Fed, thus pumping asset prices higher.

Here’s our long term E-Mini chart – the orange square highlights the 2009 election cycle. It’s rather poignant to ponder about how many bears have been wiped out betting on a 2008 style crash throughout this entire cycle. I remember many who used to valiantly plaster bearish charts in the comment section. Where are they now? Well, hard to say but suffice to say we haven’t seen them in a long long time.

Obviously Volar’s chart suggests a continuation of the ramp well into December and my point & figure chart apparently agrees. Unless we drop into 1400 (which would trigger a High Pole Reversal Warning) the bullish case remains well on its way, most likely assuring Obama a solid win in November (like it or not).

While we’re on the topic of P&F charts – here’s the FXE as we were making lows at the end of July. As you can see it nailed its bearish PO of 120 and then bounced back up.

Here’s what happened since – whoever didn’t close out near the bottom got squeezed into submission, and it wasn’t pretty. Astute readers may also have noticed that the bearish PO lined up very nicely with our weekly and monthly Bollinger bands. Which is why we keep using them – when price and momentum correlate we often get to bank some mighty coin.

In case you were wondering – here’s the updated P&F on the FXE. As you can see we once again met our price objective and are currently on a little retrace. Unfortunately we haven’t really felt it on the Dollar side as it’s losing its purchasing power quicker than the Euro – talking about a race to the bottom…

Quite a bit more lurking below – please step into my lair:

More charts and non-biased 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.

Please login or register for Zero Data Feed (non-recurring) or Zero Data Feed (recurring) or ES Gold (non-recurring) or ES Gold (recurring) or geronimo/ES (recurring) to view this content.

Cheers,

End Of Month Session

It’s the final session of the month and instead of preparing for October I have been busy putting out technical fires all over the place today. My apologies but as the old saying goes – when it rains it pours. Nevertheless the show must go on and I managed to collect quite a few charts. But first some house cleaning chores:

Corn – touched support this morning and gave us a picture perfect entry. Although we still have a few handles to go until our first target I strongly recommend you guys take profits. Don’t you wish it was always this easy?

USD/CHF – you may remember the ID entry last week and it’s time to take profits as we are near the SMA. This took long enough and I hope you let ‘er ride.

Crude - hourly and daily support held perfectly. There is little anticipated upside until (or as long we are unable) to breach that daily NLBL.

The spoos seem to have acquired a mental block regarding the 100-hour SMA. After a little shake out we are now back at an hourly NLBL. That’s the first resistance cluster and the 100-hour is the next one. Nothing bullish happens unless we push above 1440.

Yes, there a setups – of course. You didn’t really think a burning lair would keep the Mole at bay? Emergency days are when you get to show what you’re made of!

More charts and non-biased 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.

Please login or register for Zero Data Feed (non-recurring) or Zero Data Feed (recurring) or ES Gold (non-recurring) or ES Gold (recurring) or geronimo/ES (recurring) to view this content.

As we’re at the EOM I’ll cover our LT charts this Sunday. Until then enjoy your weekend!

Cheers,

Setups Galore

It’s raining in Valencia today and on the trading front it’s raining setups. We’ve been busy beavers this morning and already reaped some fine rewards. But frankly that is thwarted by the sheer flood of excellent setups I see in the works right now. Yes, some of our recent trades – e.g. crude – got taken to the cleaners. But that’s how we roll – if the market takes a turn we don’t ask questions and shift our positions accordingly.

If you remember – the spoos held right at the 25-day SMA yesterday and it seems buyers paid attention. We had a possible floor in place but before we can think long I would like to see breach of the 100-hour SMA. Otherwise there’s really not much to do here right now.

Gold – yes, that was a sweet entry today. Congrats to all the rats who took it. When I looked at this setup this morning I liked it quite a bit as we had closed back outside the 100-day Bollinger yesterday. That’s pretty bullish and quite frankly I was crossing my fingers for a long. I don’t know how much upside edge we’ve got here right now. All I know is that this is a very bullish move for gold – the fact that we couldn’t even close back inside the 100-day BB is very positive and we may see a continued short squeeze.

Crude was not playing ball – I got stopped out of my short and am now tentatively long. Not liking this trade very much as a daily NLBL looms above. Let’s see what happens there and we talk….

AUD/USD – if you took a long then be aware that we are about to slam into that daily NLBL. We may breach it but if it slows down for mor than a few hours then it may be time close out and wait for an official daily breach.

I’ve got a lot of goodies waiting below – please step into my lair:

More charts and non-biased 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.

Please login or register for Zero Data Feed (non-recurring) or Zero Data Feed (recurring) or ES Gold (non-recurring) or ES Gold (recurring) or geronimo/ES (recurring) to view this content.

Cheers,




    Zero Indicator


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    1. Wrapping Up The Month
    2. Getting Paid On Thursday
    3. RIPQE
    4. Strike The Iron While It’s Hot
    5. Don’t Be Afraid Of The Boogeyman
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    7. Quiet Friday Morning Briefing
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