The Outer Limits

So where are back from whence we came and I hope you enjoyed the ride. I know – who am I kidding – it’s been a rough month and let’s hope that April will not only bring us better weather but also put us into a less devious market phase. So let’s see where we’re at on the equities side:

It’s getting interesting as we now have reached the outer limits of the current whipsaw zone. No, there is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical.

Literally that is – I’m not sure there is much left on the vertical but that was a nice jump in four days. If we push above 1880 then the momentum may again propel us higher in the stair step fashion we have have seen lately. Also don’t forget that SPX 1880 will switch our P&F back into bullish mode.

Also rather compelling right now is that the VIX is starting to drop below a pretty pronounced support line. And that may herald a new low volatility period that gets us back to the 12 mark or below. OR it may be that we are dropping from here. Unfortunately I don’t see a price pattern to get us into a position right now. At least on the equities side.

But that doesn’t mean we can’t have any fun, does it? Here’s crude which I very much liked this morning and happily pimped to my subscribers. I got filled short near 101 and it’s been one wild ride ever since. Have taken partial profits but will keep 50% in the running for a touch of daily support near 99.1. And if you weren’t a sub – well then you probably missed out ;-)

On a totally different note – you recall my write up on market phases the other day. Here’s a chart that should do two things for you – demonstrate two very distinct market periods for one. And then also drive home the point that mean reversion does not always happen, especially on the Forex and futures side. So if you trade expecting platykurtotic markets you will get burned, just a matter of time. Always know which market phase you are in and that also means looking at volatility. I and Scott have written about this rather exhaustively, go hunt it down – the search box is your friend.

We have a lot of setups tonight – here’s a freebie: Bond futures – the 10-year is at NLSL support but is also painting an RTV-S. I want to be short here with the trend if the NLSL triggers tomorrow.

Quite a bit more waiting below the fold – please join me in the lair:


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Cheers,

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.

The E-Mini has been soldering higher overnight and as I’m typing this is already above our IP-L trigger whilst nibbling on that NLBL that still stands in the way. A push above it would trigger a long.

However if you are a sub then you know that I’m already long as I liked the Russell futures quite a bit better. Smaller range on the previous candle, we were already above the NLBL and the push above 1,197.5 triggered my long. FWIW – the bulls are far from being out of the woods just yet. This entire configuration is highly ambivalent and a reversal here still has good odds. I’m sticking with price but am prepared for possible whipsaw. That’s why I’m only playing 1/2R and plan to add the next 1/2 at the 1R interval (if we get there).

More goodies 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!

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Cheers,

Told Ya So

I hope you blood leeches bothered to listen yesterday as I strongly questioned the sanity of touching equities with a ten foot pole. Of course Mole’s paranoia once again was proven to be spot on as retail schmucks are being delivered to the woodshed by the bus load. Too colorful for ya? Show me a chart you say? Alright, how about this?

Rather clearly the low participation holiday jump higher established a bit of a volume island – meaning a gap below and a vacuum above. Which means we’re stuck within about 1820 and 1840 – a.k.a. the 20 handle house of pain. Enter at you own peril – if you do take a number and make sure you bring your own stash of vaseline – we’re running low over here.

Alright – let’s be productive and focus on what actually shows some promise today. Here’s ole’ bucky which is exhibiting some uncharacteristically strong mojo – what’s going on – is it spring already? May have something to do with Draghi’s musings this morning – I saw the EUR/USD fall off the plate during his speech.

Very interesting jump higher on the Dollar and it even attempted to poke through that double layer weekly SMA stack (i.e. 25-w and 100-w). I’m rooting for ya buddy but you have to show me the goods now. So let’s be objective which should be easy as we’ve got a nice inside day candle today – at least as of now. Alternatively you could be short right here with a stop above the 25-week – a few ticks away to be safe.

More goodies on the way – grab your secret decoder ring and meet me in the lair:


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Please login or subscribe here to see the remainder of this post.

Cheers,





    Zero Indicator
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