The Blood Letting

Looks like this move caught a lot of folks by surprise as I don’t see the bears doing their occasional victory dance either. Not that they wouldn’t deserve one after all those years of pain. Which goes to show that high volatility tape without technical context can be detrimental to your account. It also shows that moves to the downside can be quite a bit faster than those to the upside. However if they move fast they usually flame out equally quickly. So let’s see where we are:

The volume profile chart shows us near the bottom of the high volume range we’ve been bouncing around in since early February. As you can gather participation drops off quickly after around 1830.

There’s not much in terms of technical support there and even the 100-day SMA on the E-Mini is looking a bit iffy. It’s been a while since it has been tested, so let’s look what else we got.

1844 came and went already since I took this snapshot. Which is why I called the 100-hour BB soft support. In strongly trending tape like this you cannot rely on upper/lower Bollingers. There need to be more in place to justify a counter directional play.

The weekly has us in mid-air until about 1817 and if things don’t slow down here near the close then it’s possible we’ll pay it a courtesy visit.

Gold campaign update – not elated about today’s drop lower but it is what it is. As we’re painting an IP we’ll move our stop to the lower trigger. You can add a contract if we run back up and breach today’s highs. May be a LKGB – we shall see…

Natgas – that one we took this morning (sub setup from Friday) and it’s looking good! Already breached a NLBL and that’s a definite plus. But don’t get too comfortable yet – Mrs. Natgas is a cruel mistress and we are not in the clear just yet.

ZB update – that also was a sub entry from this morning actually. It triggered like textbook at the NLBL and hasn’t looked back. I’m now looking for a spike low so I can advance my stop. Also a positive is the NLBL breach on the daily panel, so if all goes well we may turn this into a daily campaign. But I would keep the trending campaign management via the spike lows.

And another update – this time on the CAD/CHF. Here we were kicking butt and taking numbers but today we dropped back half of what we earned on Friday. Bugger – we’ll be closing this one out today as we have breached 2R and will probably close below it. So ignore what I typed on the chart – I got it wrong. Today’s long trigger on the IP is however valid – and so is the short trigger of course.

Two more goodies below for my intrepid subs:


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Happy hunting but keep it frosty!

Cheers,

Bad News And Good News

Some of you guys may feel a bit miffed having missed the bus to yet another fast spike to the downside. I however caution you to not let emotions rule your thinking. You may recall that the same happened on the way up a few days earlier and it could be worse as we may have easily blown higher without any chance of getting in. So the bad news is – we dropped back into the old whipsaw zone from hell. The good news – yes, we dropped back into a region where we may actually get positioned before the tape is ready to proceed to the next phase.

Here’s the view on the E-Mini – it took the express elevator down after bumping against our volume chasm starting near 1880. I don’t see any way in right now (or out if you got suckered in near the top). Best to stay out of equities as of right now. Bite your time and wait for better opportunities – let Mrs. Market come to you, not the other way around. She’ll let you know when she’s ready to party.

Quick update on the NG campaign – it got triggered this morning and is currently attempting to heave itself above that daily NLBL which is still standing in the way. If we make it above it today then we should be good for a push higher – as of now things are still hanging in the balance.


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,

The Outer Limits

So where are back from whence we came and I hope you enjoyed the ride. I know – who am I kidding – it’s been a rough month and let’s hope that April will not only bring us better weather but also put us into a less devious market phase. So let’s see where we’re at on the equities side:

It’s getting interesting as we now have reached the outer limits of the current whipsaw zone. No, there is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical.

Literally that is – I’m not sure there is much left on the vertical but that was a nice jump in four days. If we push above 1880 then the momentum may again propel us higher in the stair step fashion we have have seen lately. Also don’t forget that SPX 1880 will switch our P&F back into bullish mode.

Also rather compelling right now is that the VIX is starting to drop below a pretty pronounced support line. And that may herald a new low volatility period that gets us back to the 12 mark or below. OR it may be that we are dropping from here. Unfortunately I don’t see a price pattern to get us into a position right now. At least on the equities side.

But that doesn’t mean we can’t have any fun, does it? Here’s crude which I very much liked this morning and happily pimped to my subscribers. I got filled short near 101 and it’s been one wild ride ever since. Have taken partial profits but will keep 50% in the running for a touch of daily support near 99.1. And if you weren’t a sub – well then you probably missed out ;-)

On a totally different note – you recall my write up on market phases the other day. Here’s a chart that should do two things for you – demonstrate two very distinct market periods for one. And then also drive home the point that mean reversion does not always happen, especially on the Forex and futures side. So if you trade expecting platykurtotic markets you will get burned, just a matter of time. Always know which market phase you are in and that also means looking at volatility. I and Scott have written about this rather exhaustively, go hunt it down – the search box is your friend.

We have a lot of setups tonight – here’s a freebie: Bond futures – the 10-year is at NLSL support but is also painting an RTV-S. I want to be short here with the trend if the NLSL triggers tomorrow.

Quite a bit more waiting below the fold – please join me in the 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!

Please login or subscribe here to see the remainder of this post.

Cheers,





    Zero Indicator
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