Let ‘Er Run

I’ll be quick today as there isn’t much to be said until the boyz at Jackson Hole are done laughing in their gold plated seats. Just about now they should be getting frisky and inaugurate the entertaining part of the conference by throwing darts at an IMAX size map of the world. As good ole’ George once said – it’s a big club and you ain’t in it. Console yourself by the fact that at least you’re here, which means you saw the light and learned how to focus on the few parameters you have control over. The rest is just noise – it’s entertaining here and there but mostly it’s just noise. Focus on yourself and your loved ones and you’re going to be fine.

Anyway, I do not recommend taking on any positions at the moment, the exception being your automated systems and even there I would suggest reduced position sizing.

2014-08-21_NQ_update

On the equities side it’s turned into a squeeze from hell, but as you can see the candle ranges are getting shorter and that means we’ll most likely are going to see either a fast blow off top or a correction by the EOW. As I’m managing this campaign Heisenberg style I’m now trailing it (manually) at 25% of 5R. Which means that spot below the daily NLSL is perfect for riding out any shallow reversals. If we get more than that it’ll probably dip much deeper, perhaps up to 50%. It’s been a brilliant campaign so far and at this point we just watch and let it play out.

2014-08-21_DX_update

 

Ditto on the Dollar side – it spiked to 6R today and I intend to hold this one as long as possible. Remember, let those winners run. Sorry the chart is wrong – I was blinded by all that green apparently. It should say 6R but my stop is in the right place, trailing at 1.5R (~25% Maximum Favorable Excursion). I never thought this one would run this far but I’m not one to look a gift horse in the mouth – some of those mares have a bad temper!

So, no setups until Monday – I’m actually keeping myself busy with some pretty advanced quant project. Nothing like giving that ole’ noggin’ a little kick every once in a while. BTW, how’s everyone enjoying DarthMole?

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,

Squeeze-A-Licious

The squeeze continues on all fronts and we are either at the cusp of some major move in both forex and equities or we are at the end of a beautiful run. And if it’s the former it has to happen today before the close. No, we can’t have it both ways, so let me elaborate.

The E-Mini has made a phenomenal recovery since those 1890 lows – we’re talking nearly 90 handles in eight sessions. If you were caught short near the bottom you just got your ass handed to you. I trust none of your rats were that stupid – if you were then you didn’t pay attention.

The situation we’re facing now is an interesting one. This has massive short squeeze written all over it as we’re but handles away from the old ‘not so fast’ zone delineated by ES 1980. And if it was any other week I’d say we’ll probably paint an obligatory red candle and then take the bears to the woodshed.

However, this isn’t an ordinary week – starting tomorrow we are graced once again by this month’s FOMC minutes – the good ole’ Yeller is so reliable. But expect price volatility to (as measured by for instance ATR) come to a screeching halt as the global cabal of banksters hold their annual conference at Jackson Hole.

I actually was invited but decided to abstain for – ahem – personal reasons. Anyway, as usual the tape will most likely start freezing up starting tomorrow, which also means I won’t be doing much on the trading side. So let’s review some of our recent gems – there’s a good chance that at least one of them is going to hit their stop once things start swinging widely.

You all recall (and some hopefully enjoy) the NQ trade we’ve been holding since 3917. Fortunately I am not employing CrazyIvan campaign management as I suspected that this one may turn into a squeeze and cheated by switching to Heisenberg style campaign. Otherwise I would have technically been forced to close out yesterday as it touched 3R (almost exactly). And there is still a chance that it’ll run much higher – the ES is at 1981 as I’m typing this and we still have 90 minutes to go go go go!!

Now on the currency side you may have long forgotten about that LT campaign on the Dollar. That sucker has banked me almost 5R by now – it’s been one of the best setups of the year. As some of you may recall – that has been a Heisenberg style campaign from the get-go. There was a very low probability it would get above 80 and when it did a lot of Dollar shorts starting running for the exits. I’m holding this one and my stop has been advanced now to 25% trailing.

Now the EUR/USD is looking extremely sweet to this lowly expat – in a way I am perpetually short the EUR as I earn in Dollars and live in Europe. Which is why I hedged myself near LT support (see yesterday’s post) and was happy to be stopped out today. However, it may not last – for the same reasons outlined above. Either this thing drops now – today – or most likely the rumor mill will take over and punish the early shorts. Right now I don’t have a dog in this fight but I hope that it’ll drop a few more pips before things start slowing down.

For the reminder of the week I may mix things up a little to keep you guys entertained. I always considering to post a little series on cognitive biases – what do you think? It’s something most of you have probably come across but it bodes repeating as we humans are unfortunately so easily corruptible. Or perhaps fortunately? ;-)

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,

Massive Monday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

It’s going to be a busy day – I got more setups this morning than I can shake stick at. Scott pointed out a possible bounce play on the ES/SPX this weekend and here is a bit more context if you want to monitor the hourly panel. The 25-day has now swung below price and if it holds into the open then that should be our line in the sand. A drop lower may bestow us one more scare to lighten the bus.

A bounce may indeed materialize but thus far the GBP/JPY correlation looks pretty meager. However, judging my last week’s push detachment I’m giving it a bit less credence this week.

But the real fun is happening on the futures and forex side this morning. Crude dropped like a rock all last week and we’re now near the lower 100-day BB. On the hourly I want to be long with a stop below 97.5. If you want to play it more conservatively put your stop below 97.05 (last week’s low).

USD/JPY – very juicy formation and I want a piece of the action. Triggers are on the chart – a short play is possible on failure but I think the 100-day SMA will be where the fun ends, so keep that in mind.

But we’re just getting warmed up – please step into my air-conditioned super luxury lair:


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Today’s event schedule:

And here’s the spike controller for you Forex traders. But please put on your sunglasses to protect your eyes – the poor girl has suffered a massive make-up accident (or is the lighting?).

You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

Cheers,





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