The evil Santa theme I facetiously posted yesterday appears to have been more prescient than I would have cared for. Equities literally turned on a dime and continued to dive lower all day. Suffice it to say that I’m a bit miffed as we may have missed the boat here. In retrospect this was a good spot to grab some shorts but without a bit more context and only half a session after the FOMC announcement jumping into entries seemed premature. It’s conceivable that we’ll get another bounce ahead of Christmas but I’ll be honest – that was a strong move and the situation is looking pretty dire here.
On a side note: The whole ‘evil [...]
We are currently at a ST inflection point in that ES 2062 either serves as support or will lead lower if breached in the coming hours. If you were short yesterday then I suggest you move your stops lower or at least advance them to break/even.
I wasn’t very surprised to see us trading below yesterday’s close this morning as participation on the buy side was almost non existence in comparison with the selling pressure that accompanied us down. So this does have a fair chance of leading lower. And by fair I mean about 50/50 – which sounds like a coin toss (which it is) but given the current medium term trend is as good as it gets. It is important that [...]
We are now counting six consecutive higher highs on the weekly panel and although that is not a reason to dip into short positions I am starting to enjoy seeing the odds swinging back to the selling side. At least on a short term basis we are heading into a correction sometime this month. Timing our entries will be what separates the steel rats from the field mice.
As of right now I’m seeing a juicy short opportunity on a little pop towards ~2091. If stopped out and Zero permitting I will long 1/2R after that and add 1/2R if we breach 2100.
Before we get to the setups here’s a USD/JPY Update. You may have grabbed some longs there with me last [...]
Equities are firing on all six cylinders and overnight we’ve held the line near the magic ES 2100 mark. Given the momentum over the past few days (consistent and small) this suggests that institutional traders are milking this short squeeze for all it’s worth.
This is the S&P cash has us only ~10 handles away from our all time highs at 2134.71. There is no telling whether or not we breach it this week, but if we do then I’ll be keeping my eyes peeled for weakness starting the next.
On the volatility front we’re just about to head into more turbulent waters. As you can see we are now back in the lower range after a low [...]