Escape Velocity

In physics, escape velocity is the speed at which the kinetic energy plus the gravitational potential energy of an object is zero. It is the speed needed to ‘break free’ from the gravitational attraction of a massive body, without further propulsion. Now if you apply this concept to the current situation in equities then it’s easy to see the gravity well that’s been holding our butts inside this year’s sideways churn zone from hell:

I’ve pointing at this volume profile chart for weeks now and for a good reason. Every time we get near the edges we get pulled back in. Manna from heaven for skilled swing traders but a bit exhausting for anyone waiting for this thing to pick a direction. I frankly couldn’t care less as I’m drowning in setups today but as you guys are hell bent on playing equities I’ll be Huckleberry.

However I have to concede that we are looking good on the equities front. I mean come on – a small inside day candle near upside resistance, that’s the stuff we’ve been waiting for. I did expect a little shake out, yes – but quite frankly I didn’t expect it to be this little.

Same setup on the YM – almost identical. FWIW – I won’t be taking either of them as I have two with better context. Unfortunately for you leeches those I’ll reserve for my loyal subs :-P

I won’t be an Unmensch however, so here’s gold which I think is painting awesome context and now we’ve got an inside candle to get us positioned. Either direction on that IP candle is looking good IMNSHO.

USD/CAD – you’ve got two options on this sucker. Either long courtesy of that shooting star (which we would like to fail if it’s not too much to ask) or long above that NLSL. Maybe we’ll have to play both to get positioned. And yes, although the downside cannot be ruled out I think that the upside would be the easier play. As you know I like my victims in prime condition and ready for the plucking.

Alright, quite a bit more where this came from – please step into my lovely spring lair:


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So, did I promise too much? Didn’t think so! And on top of all that I managed to finish testing the new CrazyIvan release which will be deployed tonight. Very excited about that and I hope everything is going to run smooth.

Cheers,

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,

Looking A Bit Iffy There

As Europe is enjoying the last day of a four day Easter weekend I expected a slow session across the front. But there are subtle signs that we may be looking at a short term correction later this week. As I’m still on excessive coding duty with several hours of testing ahead tonight allow me to make this one quick and snappy:

For one we are pushing higher but DVOL is exceeding UVOL on the NYSEL today. On its own I would probably dismiss it for some Easter holiday monkey business.

But there’s also a divergence on the VIX:VXO ratio suggesting that market makers are lifting premiums a little near the money. Could suggest a down day or two.

There is technical context that would support it after all – the best one is on the YM right now near the NLBL at 16,384 – we have been pinned below it thus far. The spoos are looking similar but we have a few more ticks until we reach the NLBL on that chart. I think a long breach on the YM would probably negate the concerns mentioned above – definitely would have to go with price.

Wheat update – if you took that one then you’re over 1R in the green at this point – congrats! Put your stop at 670/75 and keep her in the running – unless of course we close above it today, in which case the campaign ends.

Crude is looking pretty good here as we’ve got an NR4 (narrowest range in four days), an IP, and an RTV-S. So pick your poison. Admittedly a long here would be my favorite as the downside potential appears to be limited.


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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
    7. Drop The Baseline
    8. Lazy Thursday Morning Briefing
    9. Back In The Thick Of It
    10. The Squeeze Is On!
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