Sitting On The Edge

Equities are at an inflection point – yes, we are pushing into new territory but due to a shallow correction yesterday we may not be ready to start another squeeze. I’m still holding the long positions I grabbed this morning and my stop remains at 2008.5 which means I was one tick away from being touched.

2014-11-05_spoos_volume_profile

The E-Mini volume profile chart shows us what we’re up against – we are heading into uncharted territory and I think a more thorough correction is needed to kick this thing higher into the Santa season. Either way, I’m still holding my longs I grabbed at 1872. My current stop is at the 2nd nearest spike low at 1960. I am considering to shed 20% if we drop through the previous one at 1995.

2014-11-05_SPX_update

The hourly SPX panel shows us a very solid 25-hour SMA which however is starting to lose momentum. So the situation here is pretty clear. The bulls need to start running or face a more thorough correction, perhaps all teh way toward 1962 where we find the 100-hour SMA (see, there IS method to my madness).

2014-11-05_VIX_SPX

The VIX is slightly elevated as you can see from the ratio I’m plotting below the SPX here. So I think market makers are expecting a correction here as well. Strangely thus far nothing has yet materialized.

2014-11-05_GBPJPY_update

Update on the GBP/JPY setup from last night – see what I meant by not having a directional bias? Who looked at that chart yesterday and would have considered a LONG entry? Perhaps 1% of all traders – that’s how many. Well we did and my recommendation is to move your stop to b/e – you are now sitting pretty. I can’t promise that this squeeze will continue but the die has been cast and now we wait. By the way GBP/USD worked fantastically for a few hours but then somehow ran back to our entry – I recommend an exit on that one.

2014-11-05_AUDCAD_update

AUD/CAD – I was whipsawed there this morning but got above 0.9905 – taking profits now which earned me a bit over 1R considering the 1/2R I lost being long first.

2014-11-05_crude_update

Crude – perfect entry here this morning and we are now uniquely positioned for continuation higher. Again, no guarantees but move your stop to break/even and then sacrifice a medium rare beef burger to appease our overlords at the firm whose name must not be spoken.

Only one measly setup this evening and I’m keeping it for my intrepid subs:


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Cheers,

Hurdles Ahead

We have come a long way in the past three sessions but the easy part of the journey is now nearing its end. For there are hurdles looming ahead plus I’m seeing some signature signs of short term shenanigans flashing all over the place. Let’s start with where we are right now:

2014-10-21_spoos_update

Quite a climb since that is and there’s probably room for a few more handles. But bear in mind that we are now facing a trifecta of previously tested moving averages – at least per my lens and more often than not they have been observed.

2014-10-21_NQ

On the NQ things are looking quite a bit more bullish – AAPL definitely had a thing or two to do with that. However daily resistance is right ahead and we’re about to smack into it. On the weekly panel we’re however above the 25-week SMA, so that’s pretty positive.

2014-10-21_UVOL

Today’s session looks like it’s been on cruise control – the Zero also suggests that the bots are driving this one higher.

2014-10-21_VXV_VIX

Quarterly volatility has eased off quite a bit along with the VIX and the ratio has been leading the advance in the past few sessions. All good and given that we’ve got more than a week of trading ahead of us it’s not impossible that the bulls may actually pull this off and close the month above the NLSL.

So much for the good news – now let’s talk about some of the concerns:


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Cheers,

I Robot

Make no mistake – very few humans are actively involved here. The comment section looks pretty deserted today (short of tumble weeds passing through) and it’s one of many signs that anyone with a pulse feels pretty exhausted at the end of this week. Of course the market Mole knows no mercy and here are a few more charts for you stragglers before I send you off into a well deserved weekend:

2014-10-17_UVOL

Seems to me that the bots are driving this – they have on the way down and although there was a bit confusion regarding the script yesterday they’re back today in full force. I don’t know if they are scaling in our out there but thus far the mojo I’m seeing on the Zero leaves much to be desired:

2014-10-17_zero

I don’t think you need to be an expert chartist to see what I mean. Pretty solid divergence there almost since the open and we keep meandering downward. Could be a trap of course but silly games will not save this quarter, so if the bull wants turkey for Christmas he’s got to get a move on. If this divergence holds we may just slip away late in the session, but let’s see – it’s Friday evening, everyone’s gone and the bots are having a field day with it.

2014-10-17_VIX

The gaps I’m seeing on the VIX are not exactly confidence instilling either. As you can see we have dropped back to 22 and change but volatility of volatility continues to expand. Not a sign of a healthy market. Perhaps everyone was waiting for some scraps of hope from the ole’ Yeller today. By the way if you’re up for a good laugh then check out this little jewel - and I quote:

Federal Reserve Chair Janet Yellen on Friday expressed deep concern over widening economic inequality in the country and called for tackling issues such as early childhood education and encouraging entrepreneurship to help narrow the gap.

I almost blew over my old Apple Cinema display when I saw that, hilarious. Maybe that should have been a concern before we threw over a trillion dollars into the arms of our esteemed banksters. Don’t get me wrong – I appreciate cynicism at its finest but please – don’t insult the remains of my intelligence.

But I digress – if you want to know what makes equities tick I suggest you look at the short term panels which contain our best clues. Please join me in the lair:


More charts and 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 subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

Please login or subscribe here to see the remainder of this post.

And now it’s time for me to attend to my [second] favorite Friday evening past time:

german_beer

Have a relaxing weekend – I’ll see you guys on Monday.

Cheers,




    Zero Indicator


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