Europe Will Never Be The Same Again

The series of terrorists attacks that occurred in Paris on Friday evening rattled not only France but all of Europe. I hate to say this but perhaps many years from now it will become known as the defining moment when Europe finally realized the magnitude of the crisis in which it was finding itself. Mind I point out that this one hit pretty close to home as my stepson lives only five minutes away from several of the attacks:


He’s in his mid twenties and actually was out with friends in that very vicinity. Fortunately he’s not a fan of punk rock but he could have been hit very easily. When the cops told everyone to get the heck off the streets he managed to traverse his way home through dark alleys and by remaining out of sight. We got lucky this time but given the sheer number of unknown vectors circulating within Europe it is just a matter of time until we get hit again.

This is not a political blog and I therefore will not elaborate on my personal opinions regarding the current mass immigration train wreck but some of you senior readers probably know me well enough at this point to make an educated guess. Let’s just say that if I was truly as nefarious as my alternate persona on this blog I would be very short personal liberties and long civic volatility. I also am pretty pleased with myself not having bought property here in Europe and having kept a pretty low profile in general. Anyone care to recommend a nice place in South America that offers relatively safety plus high Internet access? 😉


Speaking of trading, we have an opportunity here given the long term context on the spoos.


This is the setup I have in mind – let’s wait for a drop on the ES toward 2013.75. Long there with a stop below the recent lows. Yes, that’s a big range but volatility will kick you in the keister if you even think about being stingy controlling your risk. Deal with it.

My favorite equities setup however I am keeping for my intrepid subs. If you’re not one of them yet you only have yourself to blame 😉

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Update on our ZF campaign. Proceeding just famously and I’m moving my stop to MFE minus 1R. Will trail it this way until I see a spike low.

I’m going to dig around for more setups and report back here in the next 30 minutes.


Support Zones

I’m looking for support zones here as I don’t really trust this sell off. I’ll get to the why later but suffice to say that momentum on the way down has been rather pitiful which strongly points toward the scenario I proposed two weeks back: A pre-bear-slaughtering-season-shake-out followed by a Santa Rally pinning equities near positive for the year. After that it’s every man for himself – I expect a huge shake out for 2016.


I mentioned momentum on the way down and this is what I was talking about. The sheer fact that we enjoyed such a smashing swing trading session yesterday is a bit out of character. This is the spot where gravity should make itself felt in order to produce sufficient pain to force a sell off. It’s possible that we’re simply taking our time here but it needs to happen soon, meaning today or tomorrow.


The long term panel shows me potential support zones unchanged near 2054, 2035, and 2008. Let’s also not forget the volume hole on the daily:


Here we got a little chasm of participation between about 2035 and 2055. Which lines up very well with my LT context. It also suggests that should we actually drop through 2055 we may have good odds at getting to 2035.


Now this is something I saw by accident today and which supports my view that this sell off is engineered to clear out the ranks a bit. The VIF/VIN ratio is actually climbing higher, which is something I have rarely seen. Should be dropping right now, so this is worth noting.


Update on cable – it’s finally getting out of the gate and I’m moving stop to break/even.


Bonds – we have been waiting for this one for days now and things are getting pretty coiled up here. Just don’t complain that I didn’t warn you.

But my favorite bond symbol for today I’ll keep for my intrepid subs, plus plenty of other victims to be slayed:

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So Far So Good

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 you always consider the general direction when trading short term chars.


And the downside potential right now is pretty limited – I have support kicking in as soon as ES 2050 where the 25-day SMA hails right now. On the weekly we have 2035 and if things really get dicey there is there is a stack of weekly NLSLs starting at 2008. If the bears intent on hacking their way all through that they better bring machetes.


Update on cable – so far so good as well but price hasn’t picked up any pace yet. I will keep things as is and advance my stop to break/even once it pushes above 1.515. That diagonal support line has plenty of touches but it was also falling and thus has less meaning to me.


Besides, just to give you an example of what I talked about a few posts back  – here’s gold proving that in the end trendlines are just that – lines – nothing else. Doesn’t mean price will always obey.


Bonds – in case you didn’t catch it yesterday – still is looking like a possible long. Same caveat as on the cable campaign: This horizontal trendline has not been touched sufficiently, thus the odds are low here. Which means at maximum deploy only 1/2R or less.

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.


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