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:


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Setups Galore Tuesday 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 spoos have advanced higher overnight and perhaps this ship has sailed. However IF (and only if) we see a retest of 1852.5 then I would be long here with a stop below 1850.

However the NQ looks good right here and now – I’m long with a stop below 3654. Yes, a bit speculative – only playing 1/2R.

VERY nice potential reversal pattern developing on copper – still a bit young but the risk is pretty contained. You can play 1/2R with a generous stop below the diagonal.

Event risk on all GBP and CAD related pairs today – so watch your butt in the coming hours (the times are in EDT).

But we’re only getting warmed up – quite a bit more waiting below the fold…


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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.

Pretty interesting morning on the equities side – thanks to yesterday’s sideways churn we’ve got a pretty pronounced BB compression and I expect it to resolve either today or tomorrow. The E-Mini has been dancing on the 25-hour SMA and I would take a small long at 1876.5, the hourly NLBL which is good a few hours into the open.

Basically the same formation over on the NQ – both trigger and stop are on the chart. FWIW – although I like to trade with the trend as opposed to against it I have no directional bias here and would love to play the downside as well. But I simply don’t see a technical entry right here and now. That may of course change over the next few hours.


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