Only The Paranoid Survive

You all know my motto: Just because you’re paranoid doesn’t mean they’re not out to get you. We are at an interesting junction here and I am seeing signs that point toward possible short term shenanigans on the horizon. Let me show you what I mean:

This is the setup – after a two week short squeeze the E-Mini has bumped into another volume hole and apparently is in the process of gathering strength to overcome it. After all we are heading right into the annual EOY Santa Rally, right?

Except that the VIX has been creeping upward all day. And the rate of ascent does not match the sideways action we are seeing in the spoos, so something is definitely up.

Also noteworthy is my VIX:VXO chart – the latter is a measure of implied volatility calculated using 30-day S&P 100 index at-the-money options. So basically ATM vol is on the rise in comparison with vol across the option chain. In plain English this means we may be seeing a short term shake out next week.

That puts me in a bit of a bind as I’m long the E-Mini right now with a stop below the 100-day SMA. For now I will keep that trade in place but my I will advance my stop below the 100-hour SMA now.

Meanwhile our GOOG trade is still looking pretty good – we got a great entry near the SMA and my stop is still below. If we get a shake out next week that one may be retested, so be prepared for that.

Here’s a little freebie to appease the leeches: AMZN has been riding up hard and is now painting an inside period two days after an outside period. You know what to do and I think both directions are good to go come Monday. If you are confused about the rules then please check our cheat sheet.

A few more goodies before we’ll call it a week:
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.

Silver has been scaring the children and fortunately we didn’t take that ST long position this morning as we dropped quite a bit lower. We are now near a daily NLSL which has already been tested. I want to be long here with a stop below today’s lows. Easy setup and if she goes then I’ll flip it for a short.

Sugar looking good thus far but I sure wish it would get out of the gate. The 100-hour seems where things keep failing and we need to see a breach here sometime soon.

Cotton is also looking very attractive as it just popped over its 100-day SMA and is painting an inside period at the same time. Great setup and if you want ST support look no further than the 25-hour SMA.

The old greenback stopped out my tentative ST long this morning and we’re even back below the 25-hour. This thing couldn’t get a bid in a Siberian prison holding a fistful of pardons. But at least it’s painting an inside day setup today and you better hope it’ll breach the upside or I’m going to charge you guys in Euros! 😉

USD/JPY has apparently been in shake out mode and now finds itself at a daily NLBL. The first stap higher has been punched back below and today’s close determines our trading direction – at least for now, the NLBL is good for another two sessions.

The GBP/USD is proving to be a handful – I got sand in my face when my original long setup got stopped out this morning. But as I’m tenacious I would be willing to try another one if it manages to pop above that 25-hour SMA. Depending on how we close I may however also look at some puts starting Sunday night. So keep an eye on this sucker – that diagonal resistance line should be good for some ill-gotten gains.


Before I let you go another friendly reminder that you can now also follow my posts on Google+, so please add me to your circle if you haven’t already. That’s it – now it’s Hefeweizen time! Have a great weekend everyone – I’ll see you Sunday.


Friday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

By the time I’m typing this the spoos have already touched the 25-hour SMA. A breach lower here may lead us back to the 100-hour. The fact that the 25-hour is flattening may suggest the juice is running out up here. So I’m pretty curious how things will unfold as we are about half an hour away from the NYSE opening bell. I will grab a few ST short positions if buyers don’t show up here.

Signs of life in the greenback. When I got up this morning I was horrified to see the EUR/USD above the 1.3 mark again (as you can imagine I’m feeling that at the ATM). It’s since weakened a bit and inversely the DX is now pushing above the 100-hour SMA. I’m going to hold the confetti for now however as this could turn into yet another failed break out similar to what we saw last Wednesday. I think a solid breach here is important or a EUR/USD of 1.3 may be in Santa’s Christmas bag.
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.

Here’s that bad boy that’s ruining our Christmas shopping experience (not really but it’s a great excuse when shopping with Mrs. Evil – hehe). Next support line is of course the 100-hour SMA. Since I took this snapshot it’s pushed back up and it’s unclear right now whether or not we’ll test it. Keep an eye on that however over the next few hours. If we push higher than the 25-hour SMA will be the next cluster of resistance.

USD/CHF right at the 100-hour SMA. I’m short with a stop above.

Silver has been running like a hare lately. Someone with deep pockets is having fun with that contract. Which is why I’m only trading in very small position sizes here – no reason to play hero here folks! Anyway I was about to try a long here but in the past few minutes it’s been running back up again, a bit late to chase it, sorry!

Pickings are slim right now and it’s very tempting to try to chase what looked like a great setup only a few minutes ago. I strongly suggest you remain disciplined and wait for another opportunity. We are still in a honeypot period and that means market makers are not taking prisoners – be careful out there!



Let’s Slow It Down

Things are getting a bit messy out there and I have alert signals light up all across my evil lair market console. As you know there are times to strike and there are times to just sit patiently and wait things out. And the tape I’m seeing right now is but engineered to draw in the suckers and drain them of their last drop of blood. It’s a bit like fly swatting – when things are running in circles it’s best to slow down and wait your turn.

The spoos took off over night, stopping me out and putting me in a long position. Of course the crossing of that 100-day SMA had to be done cloak and dagger style – I would have missed a decent entry if I didn’t have the benefit of living over here in Spain. Since the open any remnant enthusiasm has been squeezed out and we are back in slow-mo churn mode.

Several futures contracts like copper, gold, and silver rolled over today, so I’m not going to touch them for a day or two except for a quick scalp of course. Coffee however rolled over last week and the NLBL setup I suggested last night is looking pretty good right now.

I’m also still long bonds but it took some in/out Heidi Klum style – way too much work recently, which is what’s causing me to slow things down. I’m happy with our recent setups but I’m not too eager getting over positioned here.

Sugar also holding that diagonal support line and you had another opportunity to dip in this morning. If you missed it then here’s another way in as we’re now approaching a pretty interesting inflection point.
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.

Just so happens that the diagonal is going to meet the 25-day SMA in the next day or two. Which means that it will have to breach one of them – it can run but it can’t hide. So I guess the setup here is clear – long on a breach above the 25-day SMA and short on a failure and a drop below the diagonal.

And as coincidence would have it we have an almost identical setup in soybeans. What are the odds of that? I don’t know but I’ll play it the same.

GBP/USD looking positive and it’s back at the ole’ diagonal resistance line. I’m currently long with a stop below both hourly SMAs. If they breach then I may go short, depending on velocity.

EUR/CAD – currently holding the 100-hour and I’m long with a stop below that 25-day SMA. Of course the NLSL also helps. I may flip this one for a short if she drops lower.

Have fun and keep it frosty – no sense in getting too involved with the current tape.



    Zero Indicator

    Darth Mole Alerts

  1. poll

    • How many discretionary trades to you place per month?

      view results

      Loading ... Loading ...

  2. NinjaTrader

    search warrant

  3. recent misdeeds

    1. Happy Thanksgiving
    2. Great Call Flawed Execution
    3. Time For A Little Hedge
    4. Soylent Green And Orange
    5. Misses Mean Reversion 2015 Runner Ups
    6. The Mad Momo Ratio
    7. Europe Will Never Be The Same Again
    8. E-Mini Session Wrap Up Video
    9. Support Zones
    10. Short Term Inflection Point