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,

Channel Surfing

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.

The spoos are in the process of forming a falling flag and depending who you ask this may actually turn out to be bullish as well. Either way I’m more interested in the inflection points which are now 1763 (hourly NLBL and diagonal) on the upside and 1755 on the downside. As pointed out yesterday I remain pleasantly surprised but at the same time highly skeptical that our short entry near 1770 will resolve lower. But the rules are the rules and I continue holding with a stop above that daily NLBL – recall that it’s good until Friday.

By the way the VIX is now sporting a rapidly contracting Bollinger bubble – it has shrunk to a window of only two handles and either way we’re going to get a breach on one side soon. Which would start the count on an inverse VIX signal – i.e. a VIX sell on a drop below 12.35 and a VIX buy on a push above 14.23.

I know, it’s a bit confusing – a VIX sell means you would want to be short equities and a VIX buy means you want to be long equities. This one has served to confound retail traders since the dawn of humanity (i.e. we presented it here several years ago). So if you’re the inquisitive type – the rules are explained on ourĀ cheat sheet.


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Cheers,

Feeling Squeezy?

Seems like we nailed the floor down to the candle courtesy of the Zero indicator. That’s how it goes – sometimes you get nothing for a week and then there’s that one signal that puts you ahead of the crowd when it matters the most. I’ve said it before and I’ll say it again – I wouldn’t touch equities in general without it.

Nice divergences – I recommend you also check out this morning’s post which shows the prior session and puts the signals into beautiful contrast. Today the Zero Lite signal seems to be happily gyrating above the zero mark – let’s see if we can get a more juicy squeeze here before the close. Watch the Zero Lite for possible signs of exhaustion (e.g. a bearish divergence) – the bulls are not out of the woodworks just yet.

On the cash we’re now running into a hurdle – there’s the 100-hour SMA plus the 25-day backed up by a brand spanking new NLBL at 1687 plus change. I don’t think we’ll hop over that without a bit of commotion – so be prepared for that.

Odds strongly favor a bonafide VIX buy signal today – for the noobs: that’s relative to equities obviously. FWIW – I told you guys two sessions ago to stay away from being long vega. If you didn’t listen then you are probably feeling it today – quite some vega crush happening here.

Setups – setups – we do have some nice ones today. You guys have to stop staring at equities all day. There are plenty of goodies to be had across various markets, so do your homework. Don’t be afraid of posting charts to the comment section either – I’m doing all the heavy lifting and haven’t seen much of value there recently. Setups setups people! It’s not a chat room – it’s supposed to help us collaborate and bank coin. Snap!!

Anyway, grab your secret decoder ring and roll up your sleeves – we’ve got work to do:


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.

Cheers,





    Zero Indicator
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