The Other Shoe Just Dropped

Yesterday I mused that the onus was now on the bulls to push the spoos above 1997 and that an inability to do so may lead to grave consequences sometime next week. It seems like my concerns were justified but the situation escalated a bit earlier than anticipated:

2014-09-12_ES_hourly

Don’t get confused if 1997 is suddenly a mile away – we just rolled over into the December futures contract and thus fair value is at its most extreme. Basically 1990 is now roughly yesterday’s 1997. And that’s almost exactly where the bulls fumbled today and the rest is history as they saying goes. There seems to be a support line on the hourly which now points toward ES 1970. I would not entertain any long positions unless that one gets touched.

2014-09-12_ES_profile

Because of the roll over our profile volume chart is not exactly spot on right now – it’ll take a few days for things to settle properly. But adjusted to the new contract it seems that 1970 represents a volume peak and it’s smack middle in our recent congestion zone. Oh joy… haven’t we suffered enough? ;-)

2014-09-12_VIX_update

Just a few days ago I wasn’t too concerned about a correction beyond a touch of the 25-day SMA. But things have shifted a bit – more specifically the VIX is now building a diagonal support line which is slowly pushing volatility higher in a systematic fashion. That may look innocuous at first but it’s a lot more dangerous actually than a fast emotional spike higher.

2014-09-12_SPX

So unless we see a very quick and violent reversal – preferably today – it’s very much possible that this one will touch the 100-day SMA mark on the SPX which now awaits near 1940. As you can see we are at the 25-day and that’s basically ‘containment territory’ – a drop below it will trigger a bit of panic selling.

2014-09-12_EURUSD_update

Not much to report on the campaign front today. The EUR/USD has triggered a long now but I’m not sure it’ll get out of the gate. Which is surprising given how compressed the hourly Bollingers are. Something’s got to give here soon. Well, I’m long with a stop below yesterday’s lows – system is a system.

2014-09-12_ZN_update

The 10-year bond campaign however is progressing very nicely and it’s time to take 50% off the table as we’re approaching the 3R mark. I’ll shift my stop to the 2R mark in hopes that we’ll touch my target zone at 123’3.

And that’s all I have for this week. Be advised that I’ll be absent Monday through Tuesday morning. But no worries – Scott graciously volunteered to be on point and if needed defend the fort from invading hordes of bear-barians. I will probably put up a quick post Tuesday near the close – see you all then!

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Cheers,

The Long Con

As you can imagine I wanted to wait out Draghi’s announcement before putting up a post but that didn’t leave me with much time before the bell. So here we go in no particular order:

2014-09-11_spoos_update

Equities still in whipsaw mode but I’m actually starting to give the bears more credence here. Neither side has been able to make much of a dent but let’s not forget that 1) the onus is on the bulls to continue the trend and 2) there are really no bears left. In a late bull trend downside corrections are usually generated by a lack of bulls as opposed to being caused by strong selling pressure. Which is why we have seen the tape plot extended tops followed by a quick fall to the next support zone.

Bottom line: The bulls need to push this turd back above 1997 – if we close the week below it tomorrow then there may be a price to be paid next week.

2014-09-11_ZN_update

Bonds are on the way now – my new target area is 123’295ish. Glad I flipped that initial long to a short after being stopped out. A lack of directional bias does have its rewards ;-)

2014-09-11_cotton_update

Cotton is accelerating higher and I’m moving my stop to the 2R mark. Very happy camper because I think we may have a runner here. Current target near 76 – if we touch that I may just be able to afford a turkey for Christmas!

2014-09-11_cocoa_update

The cocoa campaign also back on track and we may have another runner here as well. Target – well, who cares – there’s nothing but air below. I have to say – the fun has been in futures lately!

2014-09-11_coffee_update

Coffee is looking great today – inside day candle right on top of a very tested 100-day SMA. I’m taking either breach it’ll throw my way tomorrow/tonight.

2014-09-11_EURUSD_update

EUR/USD – may attempt a bottom here (much to my chagrin of course) – time to hedge, triggers on the chart.

2014-09-11_dollar_update

And I promise I won’t boast about my DX campaign (snicker) – but for the rest of you guys here may be a chance to play a shake out. Double inside day – usually decent odds on that as velocity seems to be slowing up here. A breach in either direction is a good play. I’ll put my stop at today’s lows – if stopped out I’ll be short with a stop near yesterday’s highs.  If we get a double whammy (stop out both ways) I’ll continue higher with my current position size.

FWIW - the long con across various futures contracts seems to be the play of the year. This is easy money folks with beautiful prime rib entries and strongly trending tape. If you keep staring at equities all day you may not just go blind but also miss out on a lot of fun. And that – my dear steel rats – would be unforgivable. So get with the program!

 

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,

This Could Drag Out

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.

2014-09-08_spoos_hourly

I looked at the zoomed out hourly E-Mini this morning and it looks like we may get stuck up here for a while. Quite a bit of sideways volatility as discussed last week and clearly the 2k mark is now being established. Whether or not we correct here is beside the point – but we are plotting a ton of context here which will either act as resistance or support later. Judging by recent history it’ll most likely be support…

2014-09-08_spoos_briefing

Last time we blasted right through the prior sideways range as if it didn’t existed. But rest assured that it would be observed on a drop lower – so if we descent my eye would be on the 1980 range for support. Which kind of is the rub here, isn’t it? If you just look at the pat month or so it looks like there’s plenty of room for correction. But then consider the previous 1980 churn zone, the 25-day SMA at 1970, the 100-day SMA at 1940. All I can say is – good luck to the bears – they need it…

Bottom line: I would love to see a drop lower here for obvious reasons – but as it stands we may spend much of the week in here. Well, I hope I’m dead wrong on this one.

2014-09-08_ZN_briefing

The 10-year is looking like a bounce candidate but frankly it’s a speculative entry at best. I do like the configuration on the daily – if we drop lower. Right now I’ll see if that NLSL is going to hold for an hour – if it does I’m long 1/4R with a stop below 125’040 – tiny risk. May pay off on the off chance that it runs higher.

Two more ST setups below the fold for my intrepid subs:


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2014-09-08_EURUSD_briefing

 

They are both actually based on the same idea, so if you take them both split your R between them. That said - both are pretty speculative and I strongly recommend you don’t risk more than 1R combined. The EUR has been sold into oblivion and it’s trying to muster up some mojo for an obligatory bounce. Frankly I hope it’ll go to hell in a hand-basked (expat living in Spain) but just in case I’m going to take out a little long position here with a stop below the lower 25-hour BB.

2014-09-08_EURCAD_briefing

 

Very same idea on the EUR/CAD – and frankly I think the odds are low. But that means IF (and only IF) this play pans out it’ll probably correct back to the 100-hour SMA. So a 4x pay off for a small risk – worth a shot.

If you’re looking for a more respectable setup – something know sharp looking chart preferably wearing wearing a tailored suit and an Armani tie… well, let’s wait a day and see if we get more lucky tomorrow ;-)

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Cheers,





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