Last Chance For The Bears

I’m going to have to be short and to the point today as I’ve worked all weekend to get Thor and FractalMonger out the door. Plus I have important other business to attend to and I’m literally squeezing this one in before running out the door.

2014-10-06_spoos_udpate

But things are actually crystal clear up here and all you need to know starting right now is the following number:

ES 1950.

Yup, that’s pretty much it – the 100-hour SMA runs through there and we just retested it. Above it the bears are toast and chances are they’re going to squeeze this thing higher. Below it we may get the chance to enjoy a most delicious Last Kiss Goodbye (LKGB) setup. I am crossing my fingers that it’ll be that scenario but who are we kidding – how often in the past five years have the bears been able to hit the ball out of the park? eXactly…

2014-10-06_VIX_update

What’s curious is that we’re seeing a slightly elevated VIX right now. Is this supposed to be some cheap bear trap? Doesn’t make much sense to me and I checked the VXV:VIX and VIX:VXO ratios – nothing suspicious there – all in line with today’s gyrations. Obviously they’re going to make this difficult here and Scott was right when he mentioned that this may be the sweetest opportunity they bears have had in a while. Whether or not they can live up to the challenge is another story. In any case – the 100-hour SMA will be our guide – simple and that’s how we like it.

2014-10-06_EURUSD_update

The EUR/USD has been on a tear today which isn’t really surprising given how oversold it’s been. Outside of both the weekly and monthly BBs – the stop watch was literally ticking. Now this is a good start but I need to see more follow through, otherwise we could easily see a LKGB here before hitting 1.2.

Two setups below the fold for my intrepid subs:


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That’s all I got time for today – see you guys tomorrow. And if you haven’t yet – sign up for FractalMole and/or Thor – both are still free right now.

Cheers,

Feeling Volatile

The comment section has gone into flatline mode so I must assume that many of you guys are enjoying an extended weekend. Well, the market waits for no man (or woman) – since it’s only the hardcore crew I’ll be brief but I will make it count as we have nice setups today:

2014-09-03_spoos_update

So I told you guys to short near 2010 and judging by the thundering silence none of you rats did. A bit frustrating, but not for yours truly as I pocketed some green on the way down. I can tell you where the good spots are but if you guys don’t pull the trigger – well, refer to my comment in the intro.

Now what does this chart above tell us? Quite a bit of short term price volatility there – it’s been going on for a week now. Where does this sort of thing (sideways/volatile) usually happen? That’s right – before big moves. Again, direction is unclear but the more time we spend here the greater the chance we’ll actually get a good entry. FYI – I have no directional bias.

2014-09-03_zero

Before we get to the setups. The Zero indicator did a bang job again today – very nice divergence near the lows – just like yesterday. If you are a sub and didn’t play those then please proceed directly to the tutorial page for a refresher.

2014-09-03_gold_update

Seems like that speculative gold entry yesterday (sorry – subs only) may just have a leg to stand on. I also like the proximity of the 25-week Bollinger (a touch would have been better). Best we can do right now is to leave our stop below 1260 and forget about it for a few days.

2014-09-03_PL_setup

While we’re in the precious metals aisle – I’m long platinum on a breach of that hammer. I think Scott would actually like this one, hammers and shooting stars are his new thing (with a few additional rules thrown into the mix). Anyway stop below today’s lows – or you can put it below the 100day BB nearby.

2014-09-03_sugar_setup

Sugar is looking sweet again – may just be able to muster up the mojo for a bounce. Long here with a stop just a few ticks below (i.e. < 15.5). A bit speculative – you may reduce R size to 0.5.

2014-09-03_AUDUSD_setup

AUD/USD – nice reversal – I want to be long above the NLBL on the daily. FWIW – beautiful BB compression on the weekly. I think we may just see some movement here into fall.

2014-09-03_USDCAD_setup

USD/CAD back near the 100-day SMA – it’s now or never. If it fails it then we’re pretty going to see a more complex correction – the easy path is to bounce here and take off. Decent probability and I’m in with 1R – stop a respectable distance below the 100-day as shown on the chart.

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,

How To Let Your Winners Run

It’s Monday morning and I’m not going to bore you guys with an exhaustive reflection on why traders should adopt a policy of cutting your losers short and letting your winners run. If you haven’t caught on to this very basic tenet of trading survival 101 then you either are new here or haven’t been paying attention.

2014-08-25_dollar_briefing

Instead I’m going to let our charts do the talking as the two specimen at hand should be considered textbook examples of how a strong trend can extend to unanticipated highs (or lows in the context of short campaigns). The Dollar campaign actually started as an hourly entry which then got converted into a daily setup when it breached a NLBL. I did make quite a fuzz about the long term implications of the inflection point at hand during that time. Unfortunately judging by the comment section it got either ignored or you guys simply disagreed.

Whatever it may be – the tape started to move in my favor for about two weeks, at which point ole’ bucky entered a sideways correction below 81.7. I could have taken partial profits there but given the squeeze potential I simply advanced my stop a healthy distance away and was able to sit things out. Now there is no real recipe for doing this properly – it takes a bit of finesse but my general approach in a nutshell is to gauge daily/weekly momentum and consider the squeeze potential that may feed continuation of the ongoing trend. In this case my verdict was to ‘let her run’ as they say. Currency markets move quite different from equities – so do futures by the way. Once a trend gets going it truly is your best friend.

2014-08-25_NQ_briefing

Similar example here on the NQ – it’s pushing 5R and I simply keep my stop a healthy distance away. In this case I’m using the NLSL at 4032.75 – which would cost me over an R in profits but once again I am unable to determine when we’ll see a correction. Given the fact that we had eight consecutive higher highs the odds are now ridiculously high (i.e. in the 98 percentile) that we’ll put in a red candle or two. If we do I would like to ride it out – hence my stop – low enough to sit out an obligatory correction but near enough to get me out if it turns into a sharp correction. Again, there is no crystal ball and it only will be clear in hindsight.

2014-08-25_spoos_profile_briefing

You may wonder why I’m not running to the bank to cash out right here and call it a trade. That reason should be apparent – we are in absolute no-man’s land and there is no context. A lot of folks are going to try to pick a top here and that’s exactly why I give this trend fair odds of continuation. If I was in cash up here I would wait things out as well – there is no reason for me to short this tape right now. Similarly I simply hold my longs and advance my stops as needed and per my best objective judgment. Whatever happens – I’ll be happily banking coin as it is – given that I am representative of strong hands who got their entry early (either due to skill or sheer luck) and aren’t really worried about missing an R or two.

Anyway, if you’re watching this campaign from the sidelines don’t spend your energy kicking yourself for having missed out. Instead take it as a learning experience for the next time when you manage to get a good entry and the tape starts moving aggressively (in your favor). Being able to simply sit and do nothing is half the battle.

A now to a few short term setups for my intrepid subs:


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.

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

Cheers,





    Zero Indicator


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