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.


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,

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.

 

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

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.


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

  1. poll

    • What is your average spread on the EUR/USD?



      view results

      Loading ... Loading ...


  2. search warrant


  3. recent misdeeds

    1. No Crying Over Spilled Milk (Or Beer)
    2. Entries Do Not Matter
    3. Last Chance For The Bears
    4. Three Strikes You’re Out
    5. Binary Proposition
    6. Time To Wield The Iron
    7. Zone of Fuckery
    8. Whipsaw Galore
    9. Fridays Stunning Reversal and What it Means
    10. Eenie Meenie Miney Moe




  4. yes we can!



    NinjaTrader
    Kinetick