It’s Lonely At The Top

Equities across the board ran into a brick wall this morning. Being Friday and all the timing was exquisite and in my mind the whole March unemployment shpiel or [fill in explanation of your choice] was just an excuse to scare out some of the children. I actually got pretty lucky in my short term NQ long as I was stopped out before things accelerated to the downside.

A quick visit to our trusted E-Mini volume profile chart suggests that here continues to be a volume chasm starting at 1890. As the saying goes, it’s lonely at the top.

Something I pointed out yesterday and I hope some of you guys were tracking it. The GBP/JPY continued pointing down and the divergence finally caught up with equity traders. I keep telling you rats – Forex is the dog that wags the equity tail.

Here are the spoos in all their gory – as of this writing the lower 100-hour BB seems to be offering some support. On the daily we are probably going to close as a shooting star but unfortunately we are in an uptrend now and that doesn’t give us a short entry. However should the highs be breached we do have a pretty good long trigger. Whether or not that will happen is anyone’s guess – I just work here.

Besides I have better things to do than to chase after those inane stock market wankings. Here’s natgas which I still love right here near a daily NLBL. I posted this one yesterday and it’s crept a bit higher – keep an eye on this sucker starting Sunday night.

Time for some updates. Gold banked us 1R and will probably close below the mark. And that means we take profits – heck, it’s money in the bank and someone has to pay for my illustrious lifestyle.

Crude still on the way and I’ll keep it running over the weekend as is.

Cocoa – who would have thought? Boy oh boy – it’s already jumped to the 2R mark and will probably close below it. I say let’s close her out here 1.5R and call it a week.

And that would be my cue to wishing you all a smashing Hefeweizen infused early spring weekend!


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Setup Bonanza!

Interesting turn of events this morning – although my growing cautiousness concerning the equities (long) side has thus far paid off I’m not yet convinced that we’re heading into another correction. Be this as it may, I did get positioned nicely courtesy of the TF this morning and I intend to hold this position for now or until stopped out at break/even:

Although there was a quick fake out toward the NLBL my stop was well placed and thus far I’ve racked up almost two R. Which is nice but not really what I’m interested in – I’m turning this into a lottery ticket to the downside given what I’m seeing on the short term momo side:

VIX:VXO (which I showed to the subs yesterday) continues to point downward. Again, it could be a fluke or a bear trap but I already earned my entry and I’m sitting pretty right now.

Out of fairness I should however show you guys the Zero Lite which is rather flat today. So not much participation on the downside here and I give this 40% chance to continue lower. I don’t see a long entry here right now either unfortunately – once I do I’ll let you guys know.

Update on the Dollar entry which I hope some of you guys grabbed yesterday. The right panel shows us at the 2R threshold and that means we are either moving our stop up if we close above it or close our position if we close below it. That is via the CrazyIvan campaign rules. If I would employ Heisenberg then I would have taken partial profits a bit above 1R and moved my stop to b/e. So I leave this in your capable hands – it’s possible that the Dollar is going to enjoy a run higher. But heck – it’s the Dollar right? So I’ll stick with CI rules on this one ;-)

So many awesome setups today – here’s crude gracing us with a very interesting configuration I tried to explain on the chart. Could swing either way and we are near the $100 mark – will definitely take whatever trigger this throws at me.

And I cannot believe I’m actually giving this one away for free as it’s my favorite. I have already gone long via this morning’s short term entry near 104. My stop is at today’s lows and all that ties very nicely into the IP and RTV-L that any of you leeches may grab later tonight. Absolutely love this setup and I think it’s coiled up and ready to snap.

More goodies below the fold – it’s a veritable futures bonanza today – seems Hoss is getting all excited. Please grab your secret decoder rings and join me in my freshly painted spring lair:

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!

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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:

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.


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