Rolling With The Zero

If you are a sub then you know that an important aspect of what separates the Zero from traditional short term momentum/trend indicators are divergences. It’s not that other indicators (e.g. stochastics, RSI, MACD, etc.) won’t paint them – they do. But many times they trigger either too early or in many cases way too late, thus diminishing your potential edge. The holy grail, so to speak, is an indicator that paints appropriate signals before prices reverse, not afterward. I am not sure if the Zero should be called that but quite a few subscribers have been happy (and profitable) campers for several years now.

There are actually several good divergences in the past two days but today’s session is almost a textbook example of how to play them – in particular as we got one to the up and one to the down side – the Zero of course loves to play both. As you can see two hours into the session we are painting new lows but the Zero Lite (on the 5-min panel) is already starting to point up. You may have gotten in early or waited for a retest of VWAP after which we started to paint a positive signal. The inverse happened near today’s highs (at least as of this writing) – we rapidly pushed higher but the signal was slowing down – plus we were painting outside our 2.0 BB. If swing trading is your game then this is the kind of stuff you want to see. And if you want to see the Zero in action then you may be interested in some of my EOD Wrap Up videos – it’s a great opportunity to see first hand what separates the Zero from the rest.

Recently I also added scalp signals to our chart which are based on the Mole indicator shown on the very bottom right. If you are interested in more details then look no further than my recent post Scalping With The Mole.

On the charting side there’s not too much to write home about today – let’s look at the spoos. Thus far the 1330 resistance cluster on our daily chart remains in good shape. As you may recall we are more interested in what’ll happen over on the monthly panel:

As we today will finish the month of May I am eager to see how we close out – as always we should be cognizant of possible EOM tape painting. I am not going to call the bulls in trouble just yet but suffice to say that we have two more hours in the session to go until this monthly candle concludes. IF we close below then it would be one more strike against the continuation of what was a six month up trend. The next breach we are looking for was mentioned on my P&F chart – sorry subs only ;-)

Speaking of which – there has been too much freeloading lately – please step into my summer lair:


More charts and cynical 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 or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

Please login or register for Zero Data Feed (non-recurring) or Zero Data Feed (recurring) or ES Gold (non-recurring) or ES Gold (recurring) or geronimo/ES (recurring) to view this content.

Target Alert:

We have a target alert on Natgas – you may recall that inside day entry three sessions ago. Not a trade for the history books but don’t underestimate how consistent nickel and diming can mean the difference between a good or a bad year.

Cheers,

Medium To Long Term Perspective

Let me start out by stating that I don’t trust this tape at all. It feels a bit engineered and a short trading week usually opens the gates to much monkey business. But as a few bearish charts are starting to come into sync I decided to devote a follow up post to some of the perspectives I have shared in the past few weeks.

Yesterday we took a quick peek at the long term spoos chart. My sense was that a close below that monthly NLSL would be bad medicine for the bulls. I also threw out the potential of a last kiss goodbye at the 25-week SMA. All in all it was a great shorting opportunity though with only a few handles of risk. But that was a short term trade and if you took it you should be out by now, no matter where we’ll end up today.

This is actually the most bullish chart I was able to dig up today. My SPX P&F is currently suggesting a bullish price objective of 1395. In the context of what follows below this is a bit curious – but who am I to argue with a chart that has treated us rather well for the past few years. Rather let’s focus on defining the inflection points at which we see confirmation or failure for this projected price objective. In my mind 1295 is where the bullish case dies – and 1330 (remember our volume hole?) is where the bulls gain traction and probably win the day. In the between we remain in whipsaw central and none of you are going to have much fun.

Alright, and now on to the good stuff – I do have a few medium term divergences in store which you should be aware of:


More charts and cynical 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 or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

Please login or register for Zero Data Feed (non-recurring) or Zero Data Feed (recurring) or ES Gold (non-recurring) or ES Gold (recurring) or geronimo/ES (recurring) to view this content.

Cheers,

Honest Now

It’s early in the session but I thought I’d chime in real quick as we have some movement. Now, I hate to quote myself (not really) but alas:

I think it’s great to be short here until we push above that 25-week SMA at 1336.

And I admit that this may have been a scary trade but not really if you kept an eye on the spoos and set your stop accordingly. Where are we painting right now?

Honest now – who of you guys took this setup? I want to see hands – especially you subs. Anyway, I think I’m pretty comfortable with taking profits right here and now. Truth be told it was a small position as I tend to listen to my own advice, but…

… given a 11% jump in IV my OTM puts are looking rather sweet.

I’ll put up another post later but if this holds through the EOM then it may have medium to long term implications.

Carry on!





    Zero Indicator
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