Thursday 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.

The squeeze is on! Last night’s Apple report spiked equity futures across and that threw a bit of a monkey wrench into our pertinent setups. We now have seven consecutive higher closes (and highs) on the books and if there will be a shake out then it will happen probably today or tomorrow. Because if we hop over the all time highs at ES 1892.5 then we’re off to the races and we may easily see eight or nine higher closes.

I think at the current time the 25-hour SMA remains to be our best guide – we almost lost it yesterday but APPL put us back on top. Even if we slip lower there’s the 100-hour tracing closely – I would expect any shakeout to find at least temporary reprieve there.

The volume profile chart has us back at the volume abyss – which supports my sentiment about the possibility of a shake out. Once we push higher from here it’ll take a lot of folks by surprise and the squeeze will be nasty. FWIW – I would like to get a seat on the bus – it’s still looking good on the TF, perhaps that one will trigger today.

Gold triggered today and we’re already 1R in the plus. If we stay below it then move your stop to 1272.2 at the end of today’s session – if not then close it out.

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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.


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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