Get Ready For The Whipsaw And Squeeze

I’m not trading this morning as I’m running last minute tests before deploying the EC filter version of CrazyIvan. However as we are at a critical stage on the equities side I wanted to post an update really quick so that you guys are sufficiently prepared for what’s about to transpire here. Let me paint the picture:

The worst thing that could happen here right now is that the tap just takes off as it has the lowest probability and it would result in an incredible squeeze leaving most market participants behind. But if you look at the daily spoos you will see six consecutive higher highs. Yes, we have counted more than that in the past but given yesteday’s NLBL breach at 1867.5 and the fact that we are in earshot of the all time highs its reasonable to expect some kind of monkey business here before the tape finally picks a direction after two months of driving everyone nuts.

It’s quite possible that we see a fast drop lower back toward the NLBL or perhaps near 1850 and that 25-day SMA. From there it would be an ideal spot to pick entries for a push higher resulting in a squeeze.

There are subtle signs out there suggesting this may be in the works – here’s the GPB/JPY correlation which detached earlier this morning. Again, may be nothing – perhaps it’s a fake out and we really proceed higher but if we do it’ll happen very soon.

Bottom Line: IF you grabbed that NLBL entry higher yesterday then simply tighten your stop to b/e or a bit above. If we run higher you ought to be okay but if we drop today then I expect better opportunities after they’re done scaring the children and luring in the intrepid hobby bears. Talking of whom – they’re in pretty shabby shape right now but if by some miracle we drop back below the 100-day SMA then the entire situation changes. Not worth pondering on this right now but if you are grabbing longs on a drop lower put your stop below the 100-day as that is the bull’s current Maginot line.

Alright, I see you tonight near the close.

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Cheers,

Kicking Off This Week

Today is another national holiday over here in Spain (Easter Monday) and thus I’m posting the morning update a bit earlier as usual as my entire day shifts around a little. As some of you know I have been coding the entire long weekend in order to complete a much anticipated CrazyIvan release. It’s pretty exciting stuff and I’ll be devoting an entire post to explaining what all the hoopla is about. But in the interim I have a ton of very juicy short term setups on the roster this morning – especially Forex is off the hook. So if you’re around it’s time to get busy folks – let’s wield the iron while it is hot:

Starting with equities – the spoos are holding nicely thus far and the 25-hour is carrying without breaking a sweat. There’s however the matter of that daily NLBL at 1,867.5 which expires tomorrow evening. As you can see the range of candles is getting smaller as we are approaching and it’s possible that we are going to see a little shake out today – very hard to gauge as it’s still early. I do however have a ST entry on one of its three futures brethren – but I’ll keep that one for the subs ;-)

Here’s a nice one on the Forex front – EUR/CAD – nicely trending up and I want to be long above that hourly NLSL near 1.5288. My stop would be below 1.5215, putting it near that 100-hour SMa.

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


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It goes without saying that you should split your exposure amongst correlated pairs – don’t put 1R into all of them as you would be effectively trading the same currency with a higher R percentage. Alright, have fun but keep it frosty!

Cheers,

Drop The Baseline

Having been on the road until Tuesday I just realized that we’re heading into a long weekend. I suspect most of you are already on the way out or won’t catch this before Sunday night. So let’s dive right in:

The VIX Buy signal we triggered on Tuesday seems to be proceeding nicely. Worth noting is the fact that we have rapidly descended back toward a baseline near VIX 13.5 which only recently was breached. That’s quite a volatility squeeze and if you were caught with puts (and even calls) near the bottom and didn’t get out then your premiums aren’t worth jack at this point.

On the spoos we are heading toward a NLBL which represents our first technical hurdle. Nothing else to see here…

Our GBP/JPY correlation seems to be supportive – it’s served us well again this week.

My YM entry this morning has paid off very handsomely and I’m taking it off the table now as we’re touching a NLBL on the daily panel. Good chance for a little shake out here.

I know it’s a long weekend and all but I actually ran into some very nice setups. Please join me in the lair:


More charts and 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 subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

Please login or subscribe here to see the remainder of this post.

Per today’s theme I’m kicking off your Easter weekend in style by dropping a real bassline:

And another one – as it’s a three day weekend – wohoo!

Make sure no pets or younglings are nearby then grab a cold one and crank these suckers up. Wishing you all a fabulous weekend – see you guys next Monday!

Cheers,





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  1. recent misdeeds

    1. Thursday Morning Briefing
    2. Escape Velocity
    3. Get Ready For The Whipsaw And Squeeze
    4. Equity Curve Trading With Crazy Ivan
    5. Looking A Bit Iffy There
    6. Kicking Off This Week
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