A quick update – while I was out the spoos breached the 25-hour SMA. This means I’m closing out all remaining lottery tickets – at least for now:
The perennial buyers are obviously attempting to limit the damage. Until we drop back below the 25-hr I will remain out. Not sure about long positions just yet, I would prefer to see some retest of the SMA.
It’s been a rather interesting session thus far and I have been pretty prolific today offering some updates on playing the spoos. My entry was 1399 as most of you are probably aware of since I announced it all over the place. We dropped all the way to 1384 but have since recovered ten handles (as of this writing). Here’s where and why we bounced:
As you can see – right at the big volume hole near 1388. And we need to get below 1388 for the ole’ Flux Capacitor to kick in. We were about to pass over but we must have hit some inter-dimensional hurdle (Fed cough cough) and some emergency buyers showed up.
So if you saw this coming – why did I not scale out near 1388? Simple – because this is not the trade I’m looking for and if I jump in/out too often I’ll get left behind if we paint a big move. Has happened to me back in the day and I learned my lesson since. This is not a normal scalp, which is why I’m approaching it differently. Anyway, my stop is now above VWAP and I’m either getting stopped out near 1397 or I get to target (which is quite a bit lower).
The good news actually is that the volume hole was observed. This means that we will be able to use it in the future if we come down for a visit again. Until this happens I am however neutral until ES 1400. Depending on the close I may try another short or go long if we push above it.
In terms of setups I have very little to offer today, so let’s just get it over with. The USD/CAD is back above the 100-day after testing its 25-day (now you know why I use these things). I want to be short until I get stopped out above that diagonal on the daily. If that happens I’ll flip for a long. Sheesh – a bit too much work and gyrations this week – not my favorite tape, this. I’m pretty ecstatic about the elections finally being behind us.
EUR/AUD approaching support on the daily. I’m waiting for a breach of the 25-hour now to get long. Not interested in a short position unless we drop below the 100-day.
That’s it for today, folks. I’m going back to coding – doing some work on the NinjaTrader based Mole system again. If anything exciting happens I’ll chime in via Google+ or Twitter.
This is a special intra-day update: The spoos are now sitting at their last line of defense on both the hourly and daily panel. If you are a swing trader or scalp hunter then this may be a great opportunity for a contrarian position:
Things are looking critical – yes, again. The sheer fact that we are flipping back/forth from possible buy to sell signals several times in two weeks should make us think. Equities seem to suffer from an acute case of dissociative identity disorder and that was the big I was covering last weekend. Anyway, this is either a major fake out or it’s the beginning of a big slide. Great prediction there, Mole!
Well, since I don’t have a crystal ball this means I want to be long here until ES 1400 – once we drop below that I’m short. Very simple – no ifs and no buts, and no lofty guessimations involved. Yes, we may have to change positions a few times until this sorts itself out (before X-Mas please!) but I think the gain will be worth the pain
You have been briefed!
A quick update on the E-Mini. This morning I was lamenting that we had missed that 100-hour breach. Then I stepped out for the gym for two hours and just came back to see this:
Most interesting – we just dipped below. Also note that the daily NLBL seems to be holding thus far. It’s a bit early to jump to conclusions here but I wanted to make sure everyone is at point. It’s permissible to be short here with a stop above the 100-hour, which is doing us a favor by moving sideways.
However, I don’t think the fat lady has sung just yet. The downside range on today’s Zero Lite is very minimal. A -1.0 signal would be more promising, -2.0 or higher would be ideal. The -0.4 spikes down here speak of minimal participation while everyone is kicking the tires of the U.S. markets.
The inflection point on the hourly is valid – but I would monitor it regularly as a surprise spike would not be uncharacteristic based on prior precedence.
I’ll provide an update a little later – but this needs to be shared right away. By the way, I trust that you were monitoring the AUD/JPY after hours as the writing was on the wall early on despite several whipsaw moves thrown in between for good measure.
As the Russians say: Chart provided without commentary. You all know how I feel about the long side here. BTW, VIX just dropped to 13.99. To quote General Anthony McAuliffe: NUTS!
As expected we end 2011 on a bonafide doji. All that remains now is to thank you all for a pretty amazing year – I could not have it done without you and your support. We have truly come a long way in the past twelve months. While almost everyone else has been taken to the woodshed, we stainless steel rats had a lot of fun, a lot of laughs, and most importantly we banked some mighty coin. And if you thought 2011 was monkey ass crazy then you ain’t seen nothin’ yet…
Well, I for one intend to be the last man standing. For real – the one clear bull market I see around the corner is in the doomsday prediction racket. So knock yourself out and load up on shotguns, ammo, and MREs Burt Gummer style. I’m thinking Y2K all over again but if a bunch of Nazi Commi Zombies wind up storming the evil lair then they’ll have another thing coming. Whatever happens – as long as there’s the game we rats will continue to manhandle the tape and rub ignominious defeat into the faces of whoever dares to take the other side of our trades.
And let it be said that if any of you remember any details about New Year’s Eve the morning after I would be very disappointed. I expect you all back bright eyed hungover and busy tailed caffeine infused on January 3rd – Monday the 2nd is an NYSE holiday.
In that spirit let me all wish you a very Evil New Year!
I bet most of you guys are scrambling to get ready for the Christmas so let me line up the usual suspects for you guys:
No, not those! But I think Keyser Söze and his cronies would do quite well over on Wall Street – don’t you think?
Let’s start with the spoos – which are kind of hanging in the balance here. The bulls are doing their best to prevent a drop though the lower border of that square I painted. Once we close below the 100-day SMA the odds support a slide back down – most likely to 1160 but I would not bet any money against a slide into 1100.
Gold – aren’t you glad I told you to not get greedy and take profits near 1580? I think this could easily bust a bit higher here – in particular if we hold and close above that 25-day lower BB line.
Quite a bit more for the subs below – please step into my freshly decorated evil lair:
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