Thursday 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 is back at its 25-hour – another opportunity to get positioned. Remember to look out for the lower 25-hour BB if she breaches below before the open. Also there’s the 100-hour and a NLSL looming right below. I wouldn’t waste any thoughts on short positions until all that is sitting above. Rock on.

Copper painting an interesting trifecta this morning. If price can overcome those two entangled SMAs then I think we got  more upside on the horizon. If not then this puppy may just roll over on its back.

AUD/JPY – back at its 100-hour. I like those retest setups – currently long with a stop just below the SMA. Willing to flip n a drop through but it’s looking bullish.

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Cheers,

This entry was posted on Thursday, January 24th, 2013 at 7:24 am. Both comments and pings are currently closed.



  • Ronebadger

    Thanks Mole!  Re:  ES – I’m a little fuzzy on your short comment ” until all that is sitting above”

  • captainboom

    I interpret that as:  Don’t short until the lower 25 BB, the NLSL, and the 100 SMA are all above price.

  • Skynard

    Trimming AUD shorts for a bounce.

  • Skynard

    Currently long /QG and have not traded nat gas much, anyone know what to be expected from this storage report at 1030? Seems like it may see some volitile moves.

  • Schwerepunkt

    USD.CAD continues its climb, though shallower than yesterday’s spike-age. I missed the bump-up (but not really since I have USD and USD cash flow but live in Canada) from a trading perspective. 

    I don’t think equities can continue upwards in the face of a strengthening dollar. They could “correct” the overbought condition by moving sideways over time though. Thinking about a short here on ES. Waiting for the 25-hr to fail first. Maybe the job claims number will be a trigger event in 6-minutes.

  • Skynard

    Seeing allot of weaknes on the currency front, AUD, CAD, NZD, GBP. Makes allot of sense:)

  • Schwerepunkt

    25-hr still holding up on ES. Gotta respect the rules. Now, it’s waiting, waiting, waiting . . . 

  • Schwerepunkt

    Talking my book here, but I see HUGE upside potential in USD.CAD. I don’t know when the rocket will launch. could
    today, could be next week, next month or several months down the line. But I’m convinced it will happen. 

    http://screencast.com/t/0S3bpUIFLRC

  • http://ibergamot.blogspot.com/ i Bergamot

    IBB – biotechnology ETF.
    Building a bull flag, challenging last years high.
    Not sure if this is a good spot to buy, it can correct to 140-142 and still look good. If that happens – this bull flag on daily chart will most likely morph into something else.
    Watching 1st hour.
    IBB sold off at open every day since 1/10 without exception. Change in this behavior will be a major tell

  • Joe_Jones

    LOL @ the first 5 min SPX candle

  • Skynard

    ZL not buying it, what else is new though:)

  • ridingwaves

    The market reminds me of the movie “The Natural” and Kim Bassinger is no where to be found…

  • Schwerepunkt

    1500 SPX coming up. 

  • bdoone

    8000 E-minis offered at 1494

  • Joe_Jones

    Let us see what happens after amateurs’ hour is over. I smell a bull trap though.

    the only long that I like at this stage is AAPL for an attempt to close the gap

  • Rightside_ot_trade

    Also funny is TICK, all above zero but not very high readings so far

  • Joe_Jones

    another reason to be suspicious

  • Schwerepunkt

    It’s getting spikey now. Oil inventories at 10:30 might punk the USD a bit with all this cold weather. That’ll juice equities, as stupid as that may sound.

  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

     lol… looks like our ES longs from yesterday r doing fine. Am out now ;)

  • Joe_Jones

    A parabolic move whilst zero not playing along spells disaster.

  • http://dartht.blogspot.com/ Darth_Gerb

    smart money buying puts at any price?  (taking all comers so to speak)

  • Skynard

    Rang the bell, shorted /ES.

  • Rightside_ot_trade

    Yes watching for the inventory response. A spike doesn’t sound stupid.

  • Curiousmind3861

    AUDUSD not participating in this 1500 rally at all.

  • Joe_Jones

    Hehehe. You will go in ES history as the Stainless Steel Rat who called the top right.

  • dma0

    I trade NG a lot using ETFs. But that does not make me knowledgeable in any case. My 2 cents here, the report can be anything. I think it will be bullish today, but I plan to use it for a better short entry. I think NG is going to descend in the following week(s). 

    EDIT: 5 minutes left, have to find time to put my stop buys… but wanted to explain a little. Seems to me this week was a distribution activity. All the weather forecasts have been bullish. The price might embed too much upside now.

  • Schwerepunkt

    NG at 10:30, THEN oil at 11:00. 

  • http://dartht.blogspot.com/ Darth_Gerb

    clever girl.  like Jurassic Park, I’m not sure if i’m hunting, or being Hunted!
    [AUD/JPY]
    http://s1.postimage.org/8pdu96zdb/hunted.png

  • ridingwaves

    watch the fake out move…it seems to happen with NG time and time again..I think next week will be even more bullish…

  • Skynard

    Reduced my shorts and now banging my head:)

  • Curiousmind3861

    so it is T time again, huh? Which way will it go though when the time comes??

  • ridingwaves

    I would expect mm’s to pin it above 1500 thru tomorrow to ring the bell loudly in the press…

  • http://dartht.blogspot.com/ Darth_Gerb

    down to the fan line.
    I was looking for an overnight swan dive, leading equities down, and it did the opposite.
    if there is no reaction in the next 2 hrs.  I’m throwing it out.

  • ridingwaves

    NG report is bullish..no reaction yet
    U.S. natgas stocks down 172 bln cubic feet: EIA

  • Schwerepunkt

    Seems to have been a non-event. Dollar rallying v. energy/commodity/risk currencies.

  • ridingwaves

    priced in?
    Picked up PATH here for upside move…FDA approval now behind it, maybe get lucky and get a MAPP announcement

  • Joe_Jones

    Hmmm, AAPL is resuming its South direction on the 5 min. Will the rest of the market follow? I think so.

  • Schwerepunkt

    Expectation was for -175. Now Oil has more ability to move markets generally as it is an international commodity, unlike NG, which is trapped to local markets for the most part.

  • Joe_Jones

    Well, it’s already there: http://www.businessinsider.com/sp-500-hits-1500-2013-1

  • AmazingLarry

    Where are the shorts? Oh that’s right, there weren’t any. I followed the float for months an it only went above 2% for maybe a day. Still below 2%. Who’s gonna get squeezed?

  • ridingwaves

    no doubt….though it would be nice if the govt. created a NG infrastructure…as we are loaded with it…the night satellite pictures of North dakota and the flare off’s tell the story…

  • Joe_Jones

    Precisely. Nobody. 

  • Joe_Jones

    It seems bots were given instructions to bid up everything in order to cushion AAPL cliff dive

  • http://dartht.blogspot.com/ Darth_Gerb

    feels like Sept 14th.
    but I wanna see a turn.  I’m not getting QE-ran over again.

    http://stockcharts.com/h-sc/ui?s=$SPX:TLT&p=D&yr=0&mn=9&dy=0&id=p96412966730

    EDIT: plus there’s 5 more wunderful wunderful days of Month End as ‘January so goes the rest of the Year’ crap.

  • ridingwaves

    I was thinking same thing…

  • Skynard

    Well see about that, but we have a bear flag on the 5 min here.

  • Joe_Jones

    or another desperate attempt to make a new high. 

  • ridingwaves

    SVM seems ripe for a short squeeze as the big boys just beat up retail…no buys but watching closely..

  • http://ibergamot.blogspot.com/ i Bergamot

    Buying more SCTY.
    Looks like this is all of reaction its going to get. I was hoping to buy more around 15…

  • http://dartht.blogspot.com/ Darth_Gerb

    tight little doji on IRE.

  • BobbyLow

    I gave up trying to figure “why” the “Market” moves the way it does shortly after I began to believe that those responsible for designing Computer Programs to control market action are probably descendants and or followers of Niccolo Machiavelli.  

    Sometime during the 15th Century Machiavelli said: 

    “No enterprise is more likely to succeed then one concealed from the enemy until it is ripe for execution”.

    So in the above context other than scalping, is the market ready to short?  

  • ridingwaves

    Ok I’m in at 4.19…short sqz begin..

  • Joe_Jones

    LOL. Good one BobbyLow. Bots changed the rules of the game. Imagine where the market would be without them,  SPX 1000? Now, how high can the market go when even fumes are depleted? Good question. Bots can send the price of anything anywhere they want without any human trader buying or selling anything. 

  • BobbyLow

    As oil continues to rise you wont see this on today’s evening news.

    From this mornings EIA Oil Report:

    “ Soft demand from refineries made for a 2.8 million barrel build in oil inventories which, at 363.1 million barrels, remain well above their upper limit. Refineries operated at only 83.6 percent of capacity in the week, down 4.3 percentage points from the prior week for the lowest utilization rate since March last year.”

    I understand that Currencies also drive the Oil Market but even as we get more and more of a build in Oil each week, the Oil Industry and bidders in the Pits continue to say:

    We are still Long Oil so, “Fuck you pay me.” 

    Here is a copy of today’s EIA Oil Report for your reading pleasure.  :)

    http://www.bloomberg.com/markets/economic-calendar/

  • AmazingLarry

    That was a good ass kicking. I love to see the miners get wasted! Let’s see if it wants to double dip.

  • http://ibergamot.blogspot.com/ i Bergamot

     …bots.
    And who is doing a programming? Other bots?

  • Joe_Jones

    Is it around 3.15 pm EST that usually margin calls are made? I am sure a lot of funds are quite a bit underwater after today’s AAPL debacle.  

  • Joe_Jones

    So you think human traders are behind the ramps?
    [EDIT] for that matter, do you think human traders have anything to do with the way prices move?

  • BobbyLow

    That’s for sure Joe.

    That’s why most if not all trading decisions that I make now are binary based on price.  ”Price being always right” goes back to the days of Livermore when there were no “Bots”.  But I think he did it  on a pad of paper.  

    I guess the bottom line for me is that when I think and don’t act in a binary way, I lose. I believe that this is because the programs that are designed by institutional programmers are designed to fade human thought.

  • Joe_Jones

    The way I see it is that bots have completely annihilated the buying or selling momentum done by human traders. I mean the worst possible news can hit the market but if the big guys program bots that day to bid everything up, then hell will freeze over before we see a red candle. Today’s is one of those days.

  • BobbyLow

    Oh, I almost forgot, I don’t remember seeing any of Mole’s setups based on anything other than Binary (meaning that if price does X via MA’s cross NLSL etc., than I’ll do Y.  

    In other words they are only based on price and not based on anything to do with what somebody said or some economic factor that feeds conventional thought.  

  • http://ibergamot.blogspot.com/ i Bergamot

    Look, machines are just doing the work people programmed them for. Good algorithm will surely make you money, until some programmer will notice  and write even better soft.
    Did AAPL collapsed because of bots that trade in 1/100 of second, or was it going down for 3 months prior to today’s disaster?
    How do you think Knight went under? 500mil in losses in 30 minutes, remember? Somebody hacked them, and dropped the bug in their algo.
    Also, I made this example here before:
    It used to be floor traders that had a significant edge over retail. Before computers it would take 2-3 minutes for order to be executed on the floor, but for retail trader same order would take 5-15 minutes and they didn’t know the fill until next morning. Now I get my confirmation in 2-3 seconds, while market maker does it in fraction of second.
    Things don’t change, they just go faster. Besides, unless you are scalping for few ticks, it shouldn’t bother you at all.

  • Joe_Jones

    I think you misunderstood me. The problem with bots is that they buy and sell to each other at such a pace that actually no monetary transaction occurs or profit/loss for the HFT because all transactions stay in-house or between “friends”. Before bots, this could not happen so easily as today. Of course MMs could manipulate price one way or another but they were doing so at the risk of getting it wrong, and were therefore more cautious over-committing themselves to one direction or another. Right now risk has simply disappeared for them, especially when the biggest HFTs collude to sent the price in one specific direction. What the retail trader needs to know if whether the bots have been switched to buy or sell mode.

  • Ronebadger

    Who was it last week that thought THIS WEEK might be a “DeMark Week 13″ ???  Are we still on track for that?

  • bdoone

    His 1492 ‘blow-off’ has been met and exceeded by 10 pts.

  • bdoone

    An actual -1005 TICK reading.  Haven’t seen one of them in a long time.  I figured up here we’d see some +1000 exhaustion TICK readings.

  • Ronebadger

    yeah, that was his DAILY 13…someone mentioned that last week was WEEK 12….I thought that this week MAY be Week 13…but I don’t know how to calculate DeMarks, although it’s interesting stuff and could be part of the puzzle.

  • http://ibergamot.blogspot.com/ i Bergamot

     I completely understand, and these points have been discussed here on numerous occasions.
    My point is simply this: Machines are here to stay, whether we like it or not. I made an effort to assimilate to this environment. (Learned it from Mole)
    Surely, bots will accelerate and prolong any ramp or decline, but knowing and using that is up to you.
    I decided to stop day trading, so I don’t have to deal with noise and whipsaw – this is how I cope with this market, until big bear market sets in …

  • captainboom

    That would be me.  So far, it looks like the sequential sell countdown will complete at 13 this week, assuming the ToS indicator is correct.  See the chart:

  • Ronebadger

    yes sir, that’s what I’m talking about…you keep us posted on that, please…

  • Schwerepunkt

    Let the companies do it. But they won’t; they’d rather keep all that cash on their balance sheets and spend a little of it on lobbyists and lawmakers to make the government pay for it. Then, they’ll turn around and complain about taxes and the size of government. 

  • ridingwaves

    some vix movement…

    bids building in inverse etfs..

  • AmazingLarry

    Dow/gold ratio almost back to it’s Aug, 2012 peak.

    http://stockcharts.com/freecharts/gallery.html?$INDU:$GOLD

    I have a long term chart but Disqus is mad at me today.

  • http://dartht.blogspot.com/ Darth_Gerb

    1491! WTH?
    I step away for an hour an someone moved my cheese. ;-)

  • Darkthirty

    Nas filled gap, 5 up….hmmm

  • itslance

    Do you have a link to more information on DeMark?

  • captainboom

    There’s not much out there.  The best reference I’ve found is the book ‘DeMark Indicators’ by Jason Perl.  Much easier to read than DeMark’s original work.  There are a few typos in the book, so read it carefully.

  • http://dartht.blogspot.com/ Darth_Gerb

    is that a reverse hammer?
    Sept 14th repeat on SDS?

    http://stockcharts.com/h-sc/ui?s=SDS&p=D&yr=0&mn=6&dy=0&id=p62486726089

  • itslance

    Hey guys, if you were bearish and wanted to play options on SPY, how would you do it? (ie naked Mar01 puts, bear spread, etc)  Reason I ask, is that I’d like to learn more so when we get a valid setup I’m prepared.  I’m trying to get a feel for how you guys trade options, since I’ve never been successful myself.

  • Ronebadger

     yes   maybe     I think    I hope    yeah, OK

  • Joe_Jones

    Is that an abandoned baby pattern on SQQQ ;-)

    http://stockcharts.com/h-sc/ui?s=SQQQ

  • Darkthirty

    Front month es options, no more than 10pts out of the money, scalping anyway

  • http://dartht.blogspot.com/ Darth_Gerb

    paper trade it.
    if you win in real money, then you are facing a habbit.  be afraid. ;-)

    http://hypervocal.wpengine.netdna-cdn.com/wp-content/uploads/2011/10/Coke-Pile.jpg

  • http://dartht.blogspot.com/ Darth_Gerb

    it’s abandoned, would like to see the macd crossover hard.  and some positive histogram.
    let it touch 38, then pick it up on a pullback. me thinks.

  • BobbyLow

    OMG, I don’t think there is an Option Spread that I haven’t tried.  And in the most simplest term it AIN’T FUCKING WORTH IT.

    OTOH, if you must trade SPY options then I would consider Weekly Options or Monthly but no further out than the Front Month.  

    There are just too numerous ways to lose with Spreads or to just kid yourself by making tiny bits of money and think you are doing well.

    If you want Leverage then IMO, trading the E-Minis are the fairest deal.  In my account, it takes $3,800 of margin per contract.  Risk is $50 per point or $12.50 per Quarter Point.  

    If you don’t want to or can’t trade E-Mini’s and can do without Leverage than Shorting or Buying SPY itself might be a better way to go. 

    BTW, stay the fuck away from naked options.  

    All IMNSHO of course. 

     

  • http://dartht.blogspot.com/ Darth_Gerb

    NUGT < $9
    looks like it's heading for a bottom trendline on year chart.

  • bdoone

    Back to the 25hr sma here 1487.70. Could see some bounce/whip-saw.

  • Darkthirty

    LOL, on the naked options, only way to scalp. Scalp trading is boot camp. Flip so fast that you have to work it, or lose it.

  • wrc1k

     PURE WISDOM: stay the fuck away from naked options

  • Joe_Jones

    If you don’t understand how options work, and especially the “Greek”, I would advise  against touching them. ETFs such as SDS present less risk but I would also advise against holding those for a long period of time due to the price decay effect.

  • http://ibergamot.blogspot.com/ i Bergamot

    If KOL and SLX don’t recover by end of day, I will sell them and look to buy back at lower prices

  • Joe_Jones

    I wonder whether there will be a pullback anytime soon. Daily candle looks very bullish so far. Anyway, I am in it already.

  • BobbyLow

    Thanks.

    I forgot one of the most Important Perils with Options is the Mind Fuck that takes over by thinking well my maximum loss is only $100, $200 or whatever.  But then these losses begin to multiply and you keep going and it’s only another $100, $200 etc.

    Then when it’s all over you realize that it it was “Death by a Thousand Cuts”.    :)

  • BobbyLow

    Yes but they have to be weekly and or front month deep in the money with your finger on the close button at all times.  

    Still better off with the E-Mini.   :)

  • http://evilspeculator.com molecool

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  • itslance

    Thanks guys.  Guess I didn’t realize I wasn’t the only one that got screwed by options.  I understand the Greeks, but theory and practice are two different things.

    Bottom line: Stay away…loud and clear :)

  • Darkthirty

    exactly, catch the turn,10pts off spot, dump em when the target is hit, back in on the confirm. Nothing on the table if you’re sick, drunk, or not on the game.





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