Technical Limbo

I think at this point the level of exhaustion among market participants is reaching that of systemic adrenal fatigue. It certainly has been affecting the comment section and I can’t really blame you guys. Although there are setups on the Forex and futures front things have been turning a bit choppy there as well. Equities have been stuck in the same trading range since mid February with no resolution in sight. The odds of this turning into a sideways correction however are increasing by the day. Five years and counting and the bears still are incapable of dropping the spoos by more than 30 or 40 handles. I do not have any directional bias but a thorough correction would be healthy as it would refresh our technical bearings. There’s simply not much up here to hang our hats on.

Being the author of a trading blog these are tough times as there’s simply not much to offer until we see a conclusive breach beyond the current chop zone. As I indicated last week – we are completing a sideways volatile period and those are the worst of times for anyone but avid swing traders. The good news is that once the pain finally ends we should be in for a heck of a lot of fun.

I closed out an hourly long courtesy of a NLBL breach this morning – rest assured that I got my butt out of there before Yellen opened her big mouth. Good for a bit over an R but I usually don’t like to touch equities ahead of anything FOMC related. On the daily side unfortunately there is no entry pattern as of right now.┬áMy main concern remains to get us all a seat on the right bus. Let’s hope we see a technical entry in the coming days.

If you enjoy P&F charts then today’s view on the SPX is pretty interesting. We are near all time highs (by a few handles), nevertheless we still have a bearish price objective on the books. This will change as soon as we breach SPX 1880 of course. But it does speak to the sideways chop zone we have been enduring for the past weeks – the P&F chart does a great job of visualizing the pain.

Nothing else on the setup front today. It may be tempting to just throw out a few haphazard charts to my subs but I prefer to be quiet and keep you guys out of bad tape instead. Trust me, you will thank me later – this is precisely the time to keep your powder dry and wait for better market conditions. And as it has so many times before – even this shall pass ;-)

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The Squeeze Is On

Before we get to today’s charts I would like to apologize for the technical hiccups you poor guys had to put up with today. Frankly it’s been a rough start of the week on my end as I have been putting out fires in the lair since Monday morning. However the Mole is back in control – mind over matter!

So the big squeeze is on and I’m a pretty happy camper as we rode the reversal since the very bottom. Early this morning I had some concerns that Yellen’s speech may throw our charts back into turmoil but once again technical levels remained intact (as during last week’s NFP report).

We are now back in solid bull territory and if the bulls are smart they’ll squeeze this thing all the way into the close as we need a healthy buffer ahead of tomorrow’s speech delivered by ECB president Mario Draghi. Which usually results in weak hands or late comers being stomped – so be cautious tomorrow around 10:30am EST.

The YM also on fire but still lagging behind on the daily panel. That 25-day will need to be breached plus it almost exactly touches the 16,000 mark – as we all know traders respect round numbers.

I meant to keep this P&F chart for the subs but we have such nice setups today I decided to be generous and share it with the leeches. Quite a nice spike we’re painting and usually that has resulted in continuation higher. But it’s possible that we fall back a little later this week – plenty of reports/announcements that can be used to shake out the piggies. So if you have been riding this thing higher then start taking partial profits.

Gold update – if you were a sub then I hope you took that IP-L near 1260.7. We had a second opportunity after that but I don’t recall if I reported on it. Either way we have now breached the 2R mark (141 ticks = 1R) and if we close above 1288.9 then your stop moves there tonight. If we close below it then the rules stipulate that we close this trade. However, I hope that we’ll stay in – take a peek:

We are extremely well positioned here on the weekly panel. Should we continue higher I expect gold to pick up steam. So here we are – 2R in profit – with our stop right below us and we may just be able to turn this into a LT campaign. How cool is that? :-)

More goodies below the fold – please step into my lair:

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That NFP report threw me a bit of a curveball this morning. I always always check the event schedule before my post but I today I was too bogged down with domestic chores and a bit overwhelmed with posting a plethora of picture perfect setups. Got sweating a bit when everything threw a tantrum just minutes later (great timing Mole) but then was elated to see most charts march on happily in their original direction (excluding the damn bonds).

It was almost humorous to watch the bears during the first spike lower (yes, I go slumming in the mornings) – everyone suddenly ‘knew’ that the tape would continue downward and that the bear was back. It was even funnier seeing the same folks revise their opinions just minutes later. So much for that – perhaps good ole’ technical analysis isn’t dead after all? ;-)

Let’s see where we are on the SPX – the cash is now solidly embedded above its 100-day SMA. Short term there’s a bit of hourly resistance which needs to be overcome – it would be nice to see that give way today before the close.

On the weekly we see quite a candle there – nice long hammer and it recovered the NLSL we gave up earlier this week. The monthly also is donning a hammer right now – admittedly we’ve got a ‘few more days’ to go, right? But thus far we have rejected the monthly NLSL and the bears have a few more weeks to try again.

Not to say that the bulls are out of the woods just yet – there is that 25-day SMA near 1810 and that is where the bears will get their second chance to drag this market down. However there are new developments on our P&F chart which suggest a new inflection point for us:

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