Massive Monday 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.

It’s going to be a busy day – I got more setups this morning than I can shake stick at. Scott pointed out a possible bounce play on the ES/SPX this weekend and here is a bit more context if you want to monitor the hourly panel. The 25-day has now swung below price and if it holds into the open then that should be our line in the sand. A drop lower may bestow us one more scare to lighten the bus.

A bounce may indeed materialize but thus far the GBP/JPY correlation looks pretty meager. However, judging my last week’s push detachment I’m giving it a bit less credence this week.

But the real fun is happening on the futures and forex side this morning. Crude dropped like a rock all last week and we’re now near the lower 100-day BB. On the hourly I want to be long with a stop below 97.5. If you want to play it more conservatively put your stop below 97.05 (last week’s low).

USD/JPY – very juicy formation and I want a piece of the action. Triggers are on the chart – a short play is possible on failure but I think the 100-day SMA will be where the fun ends, so keep that in mind.

But we’re just getting warmed up – please step into my air-conditioned super luxury lair:


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Today’s event schedule:

And here’s the spike controller for you Forex traders. But please put on your sunglasses to protect your eyes – the poor girl has suffered a massive make-up accident (or is the lighting?).

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

Cheers,

Fridays Stunning Reversal and What it Means

I sincerely hope you heeded our advice to not chase the market down and trade with a long side bias on Friday. Admit it, it looked pretty good for the bears for a minute, right?

If you review the three previous options from the last post. We are either in a trading range, bear heaven, or the Bulls are about to win again. Nothing much has changed, and the highest probability is that we are in a trading range.

Why do I say a trading range is a higher probability than upside trend continuation? Primarily because we have an uptick in volatility over the last few days and historically an uptick in volatility from a historically low base is a sign that market type is changing. This is a highly reliable phenomenon across all timeframes.

Have a look at the Volstat Indicator, which measures 14 period ATR normalized for price (expressed as a percentage of price) and measured against a 100 period, 1 standard deviation bollinger. We can objectively say that volatility is low when it is below its lower bollinger. In this case after an extended period of low volatility we now have an uptick. For this reason trend continuation remains a minor probability.

Throwing away the indicators it is clear that there is a disturbance in the force. The market “feels different”, and even though dip buyers will be attracted now this is a bad time to JBTFD

The probability of trading range went through the roof on Friday, this is roughly a 70% probability. Therefore we have some highly reliable short setups about to happen from just a little higher up.

Two more setups below for the subs:


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You heard it here first, now have at it!

Scott Phillips

 

Friday 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.

On the equities side we’ve been accumulating more and more context and it has now become apparent that the 100-hour SMA on the E-Mini has been respected in the past three sessions and is now acting as a barrier to the upside. On the daily panel we are seeing lower highs and lower lows. Obviously there is little appetite out there for being short which is why I am keeping my current positions in place with a firm (bid) stop at ES 1968.5.

The SPX is a mixed picture – yes, it’s been able to recover the quick spike to the downside but it’s still being lead lower by its own 25-day SMA. And that one is about to meet up with the 100-day SMA sometime today – which means I expect to see resolution of this situation either today or Monday at the latest.

GBP/JPY still pointing lower but thus far equities continue to resist gravity. Obviously we all have seen this play out over and over again over the past few years. We should be keenly aware of the fact that we are trading against the overall trend and the only reason we wagered into short positions in the first place is due the grace of an early entry courtesy of an hourly configuration across three major futures contracts (i.e. ES, NQ, and YM). Despite the bearish tape of the past few days however no significant bearish inflection point has been breached. Which is why I now expect a 65% chance that my short positions will be stopped out. However, due to the thin participation we have seen (holiday tape) any downside could trigger a cascade thus this remains to be low probability / high return campaign.

We have quite a few juicy setups this morning, starting with silver – here we actually have two nice entry opportunities. I would prefer the long side and with a bit of mojo that NLBL at 21.545 may just be breached. Bear in mind that we may see a fake breach first – it wouldn’t be unusual. It may be best to put 1/2R into this first and add another after 21.6 or 21.4.

More goodies below the fold 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.

Today’s event schedule:


And here’s the spike controller for you Forex traders:

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

Cheers,





    Zero Indicator


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