The Other Shoe Just Dropped

Yesterday I mused that the onus was now on the bulls to push the spoos above 1997 and that an inability to do so may lead to grave consequences sometime next week. It seems like my concerns were justified but the situation escalated a bit earlier than anticipated:

2014-09-12_ES_hourly

Don’t get confused if 1997 is suddenly a mile away – we just rolled over into the December futures contract and thus fair value is at its most extreme. Basically 1990 is now roughly yesterday’s 1997. And that’s almost exactly where the bulls fumbled today and the rest is history as they saying goes. There seems to be a support line on the hourly which now points toward ES 1970. I would not entertain any long positions unless that one gets touched.

2014-09-12_ES_profile

Because of the roll over our profile volume chart is not exactly spot on right now – it’ll take a few days for things to settle properly. But adjusted to the new contract it seems that 1970 represents a volume peak and it’s smack middle in our recent congestion zone. Oh joy… haven’t we suffered enough? ;-)

2014-09-12_VIX_update

Just a few days ago I wasn’t too concerned about a correction beyond a touch of the 25-day SMA. But things have shifted a bit – more specifically the VIX is now building a diagonal support line which is slowly pushing volatility higher in a systematic fashion. That may look innocuous at first but it’s a lot more dangerous actually than a fast emotional spike higher.

2014-09-12_SPX

So unless we see a very quick and violent reversal – preferably today – it’s very much possible that this one will touch the 100-day SMA mark on the SPX which now awaits near 1940. As you can see we are at the 25-day and that’s basically ‘containment territory’ – a drop below it will trigger a bit of panic selling.

2014-09-12_EURUSD_update

Not much to report on the campaign front today. The EUR/USD has triggered a long now but I’m not sure it’ll get out of the gate. Which is surprising given how compressed the hourly Bollingers are. Something’s got to give here soon. Well, I’m long with a stop below yesterday’s lows – system is a system.

2014-09-12_ZN_update

The 10-year bond campaign however is progressing very nicely and it’s time to take 50% off the table as we’re approaching the 3R mark. I’ll shift my stop to the 2R mark in hopes that we’ll touch my target zone at 123’3.

And that’s all I have for this week. Be advised that I’ll be absent Monday through Tuesday morning. But no worries – Scott graciously volunteered to be on point and if needed defend the fort from invading hordes of bear-barians. I will probably put up a quick post Tuesday near the close – see you all then!

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,

Sitting Pretty

I’m glad I stayed out of that equities campaign as it continues to test everyone’s patience. If you’re short since yesterday then you may be wondering if this is merely one last stab higher before the big drop. Well, maybe – I don’t have a dog in this fight which affords me a reasonable sense of objectivity. And the way it’s looking right now this beast could swing either way. But as I pointed out yesterday, terrible conditions with limited downside potential. But hey if you must dabble – be my guest – here are a few pertinent perspectives:

2014-09-10_spoos_profile

Rather interestingly we saw a bounce right at the end of a tiny volume hole. Another tick or two below and the bears would have enjoyed a much needed injection of participation. But for some reason the spoos touched 1980 and jumped right back into the dreaded whipsaw zone. Seemed utterly avoidable given the recent lack of participation, thus it begs the question as to whether this may be a bull trap. IF it really is then we need to turn back lower sharply before the end of the session – the more time we spend up here the worse for the much battered grizzlies.

2014-09-10_SPX_hourly

The hourly SPX shows us a touch of the lower 100-hour Bollinger. And boy – is that one compressed to the max right now – we’re talking less than 20 handles top to bottom. So something’s got to give here soon and most likely it will. Now, if our Sorgenkind indeed resolves lower then we may actually drop all the way to that 100-day SMA near 1940.

Here are a few short term momo charts – subs only. The free portion of this post continues further below:


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Alright – I’ve done my duty to your equities addicts – now to the interesting part ;-)

2014-09-10_EURCAD_update

Update on our EUR/CAD campaign – well, it dropped back to whence it came. Fortunately we enjoyed a very fortunate early entry and thus can afford to sit out a possible retest of the 100-week SMA. Nothing to do here right now.

2014-09-10_cotton_update

Cotton however has fared rather well and we almost touched 3R today. Which means we’re moving our stop to the 2R mark. This may actually work out fine as it gives us a bit room for a possible shake out day or two. IF this one manages to breach the upper 25-day BB it may just turn into a runner. So I personally will only use 50% of my stop at the 2R mark – the remainder goes to the 1R mark.  The long term potential here justifies a bit of campaign management discretion. This approach has served us well over the past few weeks.

2014-09-10_cocoa_update

Cocoa – and it’s off to the races! Well, we hope…. excellent entry with minimal risk yesterday. This is why I love those last kiss goodbye entries. So sweet when they actually trigger. Nothing to do here either – it’s do or die time – we have done our part.

Cheers,

Substandard High Intensity Tape

In the past week we have been seeing increasing volatility in all equity indices – as of right now we remain locked in a limbo period (for more info on the definition please point your browser to my pertinent post). In a nutshell the implications here are to a) stay the heck out or b) play the swings to your best abilities.

2014-09-05_spoos_update

Now when it comes to limbo tape there are of course various flavors. All of them are highly volatile of course as the idea is to produce maximum amount of noise in order to draw impatient participants into emotional trades. Revenge trading and tape chasing is the order of the day and market makers usually love every minute of it. But there is one flavor that’s particularly nasty and it’s the type we’re stuck in right now – long wicks combined with small real bodies and all that in a sideways trading range. The technical term for it is Substandard High Intensity Tape – or more commonly referred to as SHIT.

2014-09-05_spoos_ST

Suffice to say that if you happen to come across SHIT tape you stay the [insert expletive of your choice] out.

Seriously speaking however – this thing should have been resolved by now and the more it coils up the more explosive I expect to be its resolution. Unfortunately I do NOT see any directional signals here that I would feel comfortable considering, let alone use for anything but intra-day swing trades. At this point we should embrace the fact that we do not know which way it’ll turn, at least not yet. And if that means we may miss the rocket then that’s okay. This is the type of game you’ll only win by not playing.

2014-09-05_shut_up

Alright – I know: “Mole, shut the hell up about your damn Dollar campaign already!” I apologize for having to post this chart again but there has been a change. Given the current velocity I have decided to set my trailing stop to 15% MFE and turn it into a monthly campaign. I am certain a shake out is coming soon here but I now see the potential for a run into 85,

2014-09-05_Dollar_PNF

I looked at several intervals on my P&F chart and ~85 seemed to be the consensus. So let’s see if it plays out.

Two juicy commodity setups below the fold – so please grab your secret decoder rings:


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.

Alright, I think we’ve done enough damage for this week – it’s been fun. And you all know what comes next for the Mole:

beer3

 

That looks about right. (the beer of course)

Cheers,





    Zero Indicator


    Darth Mole Alerts

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  3. recent misdeeds

    1. A rare but good long setup in equities
    2. This Market Sucks Update
    3. The Other Shoe Just Dropped
    4. The Long Con
    5. Sitting Pretty
    6. Sitting This One Out
    7. Decision Time
    8. Fun With Forex
    9. This Could Drag Out
    10. Substandard High Intensity Tape




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