Draghi Smaaaash!@!!

It’s going to be one long day for the Euro. Several announcements were on the roaster today and everyone was expecting Draghi to announce ABS purchases. But he surprised everyone by just whacking its corridor rates across the board by 10 bps, in the process sending the Deposit Facility rate even further into negative territory, now down at -0.2%.

hulk_smash

Weak economy make Draghi aaaangry! Draghi Smaaaasssshhh!!

Here’s what happened (and is still happening):

2014-09-04_EUR_ouch

Ouch, this oughta hurt… unless you somehow short the Euro (snicker)….

2014-09-04_events

And we’re not done yet – we may see a bigger slide later this morning during the announcement of the policy statement and the ensuing press conference.

2014-09-04_dollar_briefing

As you can imagine I’m all smiles down here in the lair – my remaining DX lottery tickets (i.e. 50% of my original position) just exploded higher. I’m tempted to cut the cord but heck – let’s see what happens at 8:30 ;-)

2014-09-04_spoos_briefing

Meanwhile on the equities front we are clearly continuing to gyrate inside a limbo period – see my pertinent 2012 post on market weather for the definition and most importantly for the implications. In short – play the swings if you can.  The rocket is coming for sure but there is no saying which way it’ll take off. We may however risk small R sizes if stopped out when playing the swings at their respective extremes. Meaning – if you are going short and the range extreme based stop is touched then flip with 1/2R and pyramid higher as the position goes your way. Or do nothing – playing limbo periods is not for the faint hearted (and emotionally corruptible).

2014-09-04_crude_briefing

One measly setup today on the futures side – I’m completely staying out of Forex for the moment. Crude looking like a pretty nice long here – stop below 94.8 and you’re good to go.

This should be a fun day – I’ll check in with you guys later.

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Cheers,

Back To Work Bitches!

I can literally see your collective long faces as you’re dragging your worker bee butts back to the dreaded office or wherever you wound up trading time for Dollars. While you were following your trivial leisure time pursuits the Mole of course was being productive. What I’m hatching up on I cannot tell you (yet) but if it pans out as planned it’ll be rather mind boggling. Stay tuned.

2014-09-02_events_week

Judging by the event schedule it’s going to be another fun filled week – with the exception of tomorrow.

2014-09-02_SPX_briefing

Here’s the hourly SPX cash – or at least where it left off on Friday. As you can see the trend is getting a bit long in the tooth and either we’re dropping into a correction here or we’ll blow the bears out of the water. But what’s pretty certain here is that we’ll be seeing movement this week.

2014-09-02_spoos_hourly_briefing

Ditto on the futures side – I’ve zoomed out a little to give you a better perspective of where we are. The 100-hour Bollinger is contracting and although it’s not at an extreme it’s reasonable to expect a jump in volatility.

FWIW – my NQ and DX position are still in play and have at this point produced a mind boggling amount of profits – one of the campaigns of the year for sure. I am trailing as explained last week and am enjoying the fruit of NOT OVER THINKING A RUNNING POSITION. You know who you are ;-)

Alright, we’ll be having a bit of fun on the commodities side this morning – please step into my lair:


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

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:


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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,





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