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.
Looks like the squeeze is on – equity futures have continued to rip higher overnight and the E-Mini is now facing the 25-day SMA which admittedly has only soft context based on prior interactions. We are a bit in limbo here on the ST side so I wouldn’t suggest any pertinent entries this morning.
Here’s one for the leeches though – EUR/CHF – very nice floor pattern and it’s now trying to pop over a NLBL. I’m long here with a stop below the two SMAs – pretty solid support if it decides to retest.
More below the fold for my intrepid subs…
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On all these setups I strongly encourage you use our futures and forex risk calculators – limit your exposure to 1% maximum. If you don’t understand the concept of risk, i.e. R, then I suggest you point your browser here.
Alright guys – it’s very late over here and I haven’t even unpacked – plus I just realized that I left my iPad on the train and as you can imagine I have a few passwords to change. So here’s the skinny:
After giving everyone the run around for the past week the tape started to run like a hare in the previous two sessions. Very very difficult to get a lock on things and I’m sure a ton of people got trapped into bad positions here. If you had any sort of directional opinion you are feeling the pain right now. So let’s talk facts – the E-Mini is on top of the 100-hour and 100-day SMAs right now. That’s slightly bullish but given the recent gyrations it’s still a far cry from being out of the woods for the bulls.
Interestingly however we just completed a bonafide VIX buy signal – which for the noobs I always have to qualify is relative to equities. It’s another ace for the long side but let’s see if we get follow through in the remainder of the week. We may meander around a bit more trapping more retail rats before this thing decides on where to move next.
For the record – it’s been a brutal spring for everyone so far. Although we have dropped a bit lower today’s push above meaningful resistance puts us back into the churn zone and that means we may see more of the high volatility sideways madness we all love to hate.
Now excuse me while I go kick a tree…
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On Sunday night I warned you that after hours fuckery was in play and you should be cautious to the downside. Hope you heeded the warning. Yesterday we looked certain to fall off the plate and post a very bearish daily candle, but a masterful bit of intervention before the close pushed us straight off the lows. What we have now is a situation where the shorts are basically ALL IN, and the bulls are defending a last line in the sand. There is enough bullish evidence here that the odds favor the bulls mounting a last stand of sorts here. We have a potential bullish setup, triggered on break of the highs. The problem with this setup is that it is getting long into resistance. Personally I don’t think this one has the risk/reward basis for an intelligent trade, but if you insist on taking it perhaps monitoring market internals if it rises and trying to time an exit would be a respectable strategy. In any case you should be overly aggressive about banking profits.
This is a tough one to take. The weekly chart is uber bearish and you would be getting long into resistance. Still it does have squeeze potential.
The 1min chart shows the anatomy of the end of day bounce was not natural.