We have been swing trading crude oil for some time since being in a trading range. Although, as the saying goes “Timing Is Everything” and at this time we are anticipating a move with the current action. The price action had momentarily dropped out of this range and triggered a buy for the Skynard:)
/CL Hourly – We have zoomed in to identify a potential for a long entry as seen above. Price is currently sitting at the 25 SMA (support) with a stop just below at 58.50.
I think today’s session should serve as a stark reminder that the very last thing you should ever attempt is to apply even the slightest sliver of logic to market behavior, especially during volatile periods. I’m going to make this very easy for you rats, so listen up and listen carefully now. If in doubt or if you find yourself attempting to make a prediction as to where the tape may swing in response to big news events remind yourself of the following:
Now read the line above again a few times and then write it on a piece of paper and stick it to your wall or resident shark tank if you have one handy. I prefer the latter as it serves as a proper backdrop to that message and for all you pikers I have put together a little theme pic which you can use instead
Case in point are the spoos which first gapped lower screwing anyone left long – then attempted to close the gap until the 100-day SMA (and weekly NLBLs) to then turn on a dime and continue lower. Clearly there is no explaining any of this and neither should we try. The chart above provided us with all we need to know.
So did the Zero I may add which has been pointing down all day since the open. But chances are you weren’t watching that one as you’re a nomadic ZeroEdge reading retail rat and thus can’t afford the monthly subscription for your $2000 E*Trade account.
Soybean meal – I just held my nose and take a spoon full long here with a stop below 332. 1/2R only as the daily context is looking rather bearish so odds have it I’ll be stopped out. But if not it’ll catch a bunch of folks off guard.
Euro – nice upper BB touch and I’m short here 1/2R. I do love this chart but the gap turned into a short squeeze. Why? Because a reversal higher and beyond didn’t make any sense whatsoever, which is exactly why it happened. If that confuses you please re-read the intro above.
The force today is definitely with Forex – and for my intrepid subs I have more setups waiting below the fold:
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That’s it for today – I hope none of you guys were caught off guard and are positioned nicely. Definitely no lack in volatility and odds have it that we’ll see a bit more before things quiet down for Independence Day weekend.
While the S&P E-Mini futures have devolved into one massive sideways mess it seems that the NQ at least gives us an established range. So going forward I may use the NQ as a general guide whilst taking entries on the spoos.
Of course as soon as the respective ranges become too obvious it’s probably time to abandon them [in the context of taking contrarian trades]. But at least we have a contracting wedge delineating clear inflection points.
EUR/GBP – one of this morning’s freebies – is enjoying a splendid run and I’ve now moved my stop to the break/even point. Suffice to say that this was a bit of a lottery ticket as we really didn’t have three clear historical on that diagonal below (yesterday’s touch was #3). But thus far it’s working out well – not much to do here for now.
EUR/CAD – this one I kept for the subs as well and we managed to get in a bit late but thus far it’s paying off. Can someone tell me what’s so special about the 1.376 mark? Well, if you look closely then you may make out an inverted H&S configuration. Although those are only valuable in hindsight (meaning about now) a defended neckline does often produce a jump higher. Putting my stop at break/even and am burning some incense to appease Ms. Market.
AUD/CAD – also posted this morning for the subs. The general idea here is that we were painting some sideways floor pattern. What we need to see now is what happens at the upper hourly Bollinger. If it can stick nearby and then swing it higher we may just have a runner on our hands. Again, stop at break/even – not touching it until I see how price reacts to its first hurdle. Note also the 25-day BB which lines up quite nicely.
Words To The Wise
I’m going to poke around a bit more but have doubts that I will come across much of value. Over the past six months the tape has devolved in one big circle jerk across the board. Picking your victims requires quite a bit finesse and I have recently overstayed my welcome a few times after snagging rather fortuitous entries. Definitely not the type of trending conditions we’ve enjoyed over the past few years.
The Forex side is a still bit better(and more diverse), but as you can see from the charts above even here we are seeing quite a bit of congestion. How long these conditions will prevail is anyone’s guess. My personal inkling is that we remain stuck in a holding loop until later this fall when the Fed will disclose whether or not it is ready to start hiking this year or if they’ll push it until next year. You know my thoughts on that subject already – I have grave doubts that we will see any meaningful interest rate hikes before the end of this decade. So perhaps we should start getting used to more congested tape like this. Fortunately the new strategy I’m working on (Scalpius) loves conditions like these, so although it would suck from a blogging and discretionary trading perspective it would work well for those trading bots.
The future is now – so don’t bring a knife to a raygun fight. If you are interested in becoming a Zero subscriber then don’t waste time and sign up here. A Zero subscription comes with full access to all Gold posts, so you actually get double the bang for your buck.