Inflection Points

Equities are now beginning to accumulate sufficient context, allowing us to consider various inflection points where the odds either support continuation lower or a reversal toward the recent highs. Let’s review the daily context first:

In order to simplify it for you guys I’m hereby resurrecting an old tradition of mine – the Soylent line up. The volume profile chart show a pretty shallow volume hole near yesterday’s highs, just below ES 1940. The bounce didn’t have much meat in it but it may just have been a first foray into lost territory, perhaps leading to continuation either today or tomorrow.

Below us we of course have a bit of bearish wiggle room until about 1917, after which you can see a gradual drop off in the volume profile terminating in a textbook volume hole around 1900. That’s obviously a psychological line in the sand the bulls will want to hold. If it fails we’re going toward 1850ish – our current point and figure price objective on the P&F.

  • Soylent Green: At this point being long above 1940 is a pretty decent play if the GBP/JPY correlation shown below holds up. If breached a ride toward 1960 is in the cards and based on velocity/momentum/participation we’ll have to evaluate once/if we get there.
  • Soylent Orange: The highest odds right now are continuation lower toward 1900 unless we breach 1940. It does not have to be a black & white approach – watch the Zero indicator after the open for signs of increasing buying interest (or lack thereof). I think today is an excellent day to follow the Zero Lite for clues.
  • Soylent Red: Only applicable if we drop straight through 1900 without much of a bounce. If panic selling ensues a drop through that mark leads us toward 1850. The odds for that to happen are very slim right now. Recall what I showed you on the LT VIX chart on Friday.

The spoos to GBP/JPY correlation is pointing upward right now. That’s positive for the bulls and why I wouldn’t count the bulls out just yet. But equities need to follow higher now – the onus is once again on the bulls to draw the line here before major damage is incurred which may threaten the medium term and perhaps even the long term trend.

On the price side here’s a bit more detail. You can of course trade the E-Mini or the Spiders, or your favorite ETF, what have you. The 100-hour SMA is near our 1940 inflection point, so I think we have a pretty solid ST guide here.

I would however play the short side via the Russell futures – at least 50% of my exposure. After all it does make sense to short the weakest index and buy the strongest.

Which brings me to the NQ which still looks weak but should we see a reversal today then here are your long triggers and the stop. This may change as the day unfolds – so watch this chart as it may paint a nice diagonal higher under which you can place a stop.

Once again I found a ton of juicy ST setups this morning. Here’s gold which I want to buy on a push above that diagonal I painted on the chart. A short position is definitely possible here until that happens – in that case put your stop above 1295.

Quite a few more goodies are looming below – please meet 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.

Anyone? Damn it, I don’t get no respect… (you have to be a sub to get the reference)

 

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.

So the GBP/JPY is painting a pretty distinct divergence right now. Not a reason to grab long positions but it’s an early warning sign that we may see a bounce today.

The conditions are favorable for a dead cat bounce at least – here’s the hourly SPX cash. As you can see it’s managed to hold the 100-hour SMA as I previously suggested. The SMA is still rising however and that puts the onus on the bulls to stave off further selling. Even if we see a push higher today however there is still the possibility for it turning into a dead cat bounce. We’ll have to closely monitor the internals today – so keep an eye on the Zero Lite for divergences and early signs of monkey business.

Here’s the hourly spoos in the context of my BBs – we’re somewhere in the mid of nowhere right now. What’s interesting is the tentative rising diagonal it’s producing. We may see a quick stab lower near the open to scare out some of the children – I don’t think the bulls are in real trouble until below ES 1916.

But we have work to do this morning, so let’s get rolling. Here’s crude which looks like a good buy above 107.39. Stop below 107 – and I mean below, don’t tack it right there.

EUR/CAD – attempt to paint a floor and although we may see a retest of that NLSL I want to be long above that 100-hour SMA.

If you weren’t a sub last week then you may be experiencing a pounding pressure in your cranium. May I suggest a dose of Excedrin – Oberyn Martell strongly recommends it.┬áLess invasive (home-grown organic) treatment available below the fold:


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,

P.S.: No skulls were crushed during the production of this post.

Monday Morning Briefing

Welcome to our Monday 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.

Equities still holding strong this morning and a pop above ES 1923.5 probably leads us higher. The 25-hour SMA has now been well established as support and if we breach it it’s possible we gain some traction for a visit of the 100-hour SMA.

Gold – also following the 25-hour but to the downside. Here I want to be short with a stop above 1250. From there a long is possible but I probably wouldn’t take it as the 100-hour is a bit over 5 handles away. I may change my mind if we get a very small trigger candle and an entry pattern I can’t refuse.

GBP/CAD – it’s just overcame its 100-hour for the second time and if it drops just a bit more I am long with a stop below 1.8179.

More below the fold for my intrepid subs – 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.

Cheers,





    Zero Indicator


    Darth Mole Alerts

  1. poll

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



      view results

      Loading ... Loading ...


  2. search warrant


  3. recent misdeeds

    1. Forex Plays
    2. Long Term Perspectives
    3. How To Let Your Winners Run
    4. Double Whammy
    5. Let ‘Er Run
    6. Irrational Escalation
    7. Squeeze-A-Licious
    8. Tuesday Morning Briefing
    9. Welcome To The Wood Chipper (Again)
    10. Hold The Line




  4. yes we can!



    NinjaTrader
    Kinetick