Flying High

The ES futures are tickling 1914 (our all time high) right now and that suggests we may see a squeeze all the way into the close. We are currently seeing reversal signs across but this is one of those situation where you simply have to listen to price as we could easily see a blow off top before we ever see any signs of a correction. Wouldn’t be the first time, right?

Let me first show you what’s irking me. For one there’s that divergence on the VIX:VXO – it’s subtle however and I may just be paranoid. But then there’s also this:

At least until just recently when we touched the old highs the VIX has been rising along, so someone (i.e. market makers) is getting nervous up here. Plus let’s not forget that VIX Sell signal that’s now on the books (it’s relative to equities, not the VIX). Again, this may just be a fluke and I’m still open to the blast off scenario. I mean the tape hasn’t exactly been acting bearish, has it?

So this is how I would play it – if we don’t run up too high today then we may get an inside candle on the NQ. It’s closely following the spoos regarding strength and that’s how I would try to catch a long setup.

Now if things fall apart I want to be positioned in the laggard which is the TF. With some luck it’ll produce an RTV-S here below the 100-day SMA. Pretty neat if it triggers – but currently at least the odds are low.

Quick update on yesterday’s cocoa campaign – doing well so far and there’s nothing to do really. We haven’t earned one R yet but with a bit of luck it’ll keep pushing higher toward the upper 100-day BB.


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Cheers,

Drop The Baseline

Having been on the road until Tuesday I just realized that we’re heading into a long weekend. I suspect most of you are already on the way out or won’t catch this before Sunday night. So let’s dive right in:

The VIX Buy signal we triggered on Tuesday seems to be proceeding nicely. Worth noting is the fact that we have rapidly descended back toward a baseline near VIX 13.5 which only recently was breached. That’s quite a volatility squeeze and if you were caught with puts (and even calls) near the bottom and didn’t get out then your premiums aren’t worth jack at this point.

On the spoos we are heading toward a NLBL which represents our first technical hurdle. Nothing else to see here…

Our GBP/JPY correlation seems to be supportive – it’s served us well again this week.

My YM entry this morning has paid off very handsomely and I’m taking it off the table now as we’re touching a NLBL on the daily panel. Good chance for a little shake out here.

I know it’s a long weekend and all but I actually ran into some very nice setups. Please join me in the lair:


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Per today’s theme I’m kicking off your Easter weekend in style by dropping a real bassline:

And another one – as it’s a three day weekend – wohoo!

Make sure no pets or younglings are nearby then grab a cold one and crank these suckers up. Wishing you all a fabulous weekend – see you guys next Monday!

Cheers,

End Of This Campaign

Well it’s been a profitable campaign but today my position was closed at the 2R mark to which our stop had been advanced last Friday. That doesn’t mean equities won’t ride any higher from here but the rules are the rules:

That early morning dip lower did us in – it was a bit of a pain as the Zero Lite suggested that it was nothing but a quick Monday morning shake out. Thus the odds for a bounce back were high.

However, as you can see we’ve gone pretty flat here since and participation is dying out (right panel).

The SPX:VIX ratio is also pointing to some possible monkey business. In case this chart confuses you – the drop of the line means that VIX has been pushing higher wile the SPX painted a new all time high. The SPX managed to climb above 1800 while the spoos missed it by one tick. It’s possible this divergence is due to tomorrow’s VIX option expiration but I still don’t like it. So perhaps today’s stop out will be for the better.

Since we’re talking VIX – last Friday we closed one tick above the lower 2.0 BB. Had we closed one tick below it we would be two steps into a bonafide VIX sell signal today (relative to equities). You lucky bastards!

Congrats to everyone who participated in this campaign :-)

Nice early morning entry on the ZN futures. I think it’s worth holding this campaign as we are pretty close to getting above that monthly NLBL which was failed earlier this month.

Copper is painting a juicy inside day candle. Both of those triggers are interesting as copper just failed its 100-month (not day) SMA – thus a failure or a bounce here will probably have long term implications.

Soybeans is presenting us with an RTV-S setup – entries will be valid after the session close tonight. I also love the context here as the 25-day is meeting the 100-day with prices right on top. This is a good one and although it’s not a popular contract it’s worth considering a small position.

 

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Cheers,





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