Feeling Volatile

The comment section has gone into flatline mode so I must assume that many of you guys are enjoying an extended weekend. Well, the market waits for no man (or woman) – since it’s only the hardcore crew I’ll be brief but I will make it count as we have nice setups today:

2014-09-03_spoos_update

So I told you guys to short near 2010 and judging by the thundering silence none of you rats did. A bit frustrating, but not for yours truly as I pocketed some green on the way down. I can tell you where the good spots are but if you guys don’t pull the trigger – well, refer to my comment in the intro.

Now what does this chart above tell us? Quite a bit of short term price volatility there – it’s been going on for a week now. Where does this sort of thing (sideways/volatile) usually happen? That’s right – before big moves. Again, direction is unclear but the more time we spend here the greater the chance we’ll actually get a good entry. FYI – I have no directional bias.

2014-09-03_zero

Before we get to the setups. The Zero indicator did a bang job again today – very nice divergence near the lows – just like yesterday. If you are a sub and didn’t play those then please proceed directly to the tutorial page for a refresher.

2014-09-03_gold_update

Seems like that speculative gold entry yesterday (sorry – subs only) may just have a leg to stand on. I also like the proximity of the 25-week Bollinger (a touch would have been better). Best we can do right now is to leave our stop below 1260 and forget about it for a few days.

2014-09-03_PL_setup

While we’re in the precious metals aisle – I’m long platinum on a breach of that hammer. I think Scott would actually like this one, hammers and shooting stars are his new thing (with a few additional rules thrown into the mix). Anyway stop below today’s lows – or you can put it below the 100day BB nearby.

2014-09-03_sugar_setup

Sugar is looking sweet again – may just be able to muster up the mojo for a bounce. Long here with a stop just a few ticks below (i.e. < 15.5). A bit speculative – you may reduce R size to 0.5.

2014-09-03_AUDUSD_setup

AUD/USD – nice reversal – I want to be long above the NLBL on the daily. FWIW – beautiful BB compression on the weekly. I think we may just see some movement here into fall.

2014-09-03_USDCAD_setup

USD/CAD back near the 100-day SMA – it’s now or never. If it fails it then we’re pretty going to see a more complex correction – the easy path is to bounce here and take off. Decent probability and I’m in with 1R – stop a respectable distance below the 100-day as shown on the chart.

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,

Short Term Opportunity

Forgive my absence this morning, as you may imagine I’m still recovering from my back injury. However, I have not been completely useless as I’m actually working on a very cool surprise for you guys. I’ll explain it all either tomorrow or Monday, depending on how fast I get it done. In the meantime I have been observing the recent gyrations on the E-Mini and given the ES 1903 retest a little earlier I think we have ourselves a juicy short term setup opportunity. That is IF we wield the iron while it’s hot!

You may recall that 1903 was yesterday’s low as well and it tested once again today. I cannot guarantee you that it’ll hold, we simply have to wait things out. But we do have a rare opportunity right now for a long campaign with a stop just a few handles away. Get long here and put your stop a few ticks below 1903 – that’s it. Don’t play options as vega squeeze would rob you of most of your profits – stick with the futures or if you want your favorite ETF (short term they are fine).

That’s the view courtesy of the Zero indicator – over the past three sessions the hourly panel has been producing a pretty distinct divergence. Again, that doesn’t mean that the lows cannot be breached but until this happens (and we drop through 1903) there are decent odds down here for a bounce and perhaps a little short squeeze. Below 1903 Lucifer awaits and all bullish bets are off.

UPDATE  1:49pm EDT: As I’m typing this we are right below VWAP at 1912 – a push above it before the close probably seals the deal on a little bounce higher. If VWAP cannot be breached then it’s fair to hold any long (futures) positions beyond the NYSE close but make sure you are around to manage them. Now let’s grab the popcorn and see what happens.

UPDATE  EOS: The bulls didn’t have the mojo to drive the tape higher. This may get ugly and turn into Soylent Red. We’ll watch the tape but we won’t be trying any long positions until a bullish or bearish inflection point has been reached.

See you guys tomorrow – have fun but keep it frosty.

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,

Watch Your Six

It’ll be a short week as many vacation deprived worker bees over in the U.S. are busy preparing for an extended 4th of July weekend. So expect low participation on the market front starting Wednesday and turning into a flatline on Thursday. Which unfortunately works against us this week as this is probably just the quiet before the storm. Since I was gone Friday I’ll start this off with a wrap up of where we are followed by a few pointers on how to get positioned and of course some short term setups:

Here’s the E-Mini volume profile. Apparently we are not only heading into a holiday weekend but we’re also in the mid of a nasty chop suey zone. There is no saying how long it’ll draw out but I concur with Scott when he advices that it’s best not to be caught in between the swings.

On the short term side the spoos are looking pretty ugly. The recurring theme appears to be a test of the 100-hour SMA – so if you must/need to play then you should use that one to your advantage.

Also on a short term basis – the GBP/JPY correlation we have been watching over the past few weeks. It’s pointing down on a general basis. Watch this one during the session – if this divergence continues gravity may set in on the equities side.

Which brings me to the big whopper. I updated the daily Zero this morning and was rather stunned by the extended divergence that has developed over the past week. As it runs on the daily chart we use it mainly to assess the overall trend and in particular to spot situations where the long side may become hazardous. I have highlighted prior occurrences and as you can see we usually get some kind of correction although its magnitude cannot be predicted. IF you are trading on a long term basis (i.e. daily or weekly charts) then I suggest you make sure that your stops are set where you need them to be. There is yet no reason to panic but I would follow price very carefully – I will be posting two equity setups below which should guide you through this week just fine.

On the SPX cash side we are still in good shape and unless 1948 gives way any sudden drops to the downside are most likely going to find some dip buyers. However if that line is crossed things could accelerate quickly – an impending long weekend be damned.

More goodies below the fold – please step into my 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!

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Cheers,





    Zero Indicator


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