Setups Setups Setups!

It’s going to be a busy morning as setups are crawling out of the woodworks and everything must go! On the equities side further weakness overnight has brought us to the first real hurdle:

2015-07-22_spoos_briefing

That daily Net-Line Sell Level at 2102.75 is one of three that should start slowing momentum a bit. If we manage to push above 2106.75 then I’ll grab a few long positions with a stop below the recent spike low (wherever that’ll be).

2015-07-22_ZN_briefing

Bonds – I got kicked out of ZB the other day by just a few ticks which was highly annoying but it happens in the best families. The hourly NLBL breach here on the 10-year contract was good enough reason for me to try another stab at this. Conservative stop below the 100-hour SMa.

2015-07-22_AUDJPY_briefing

AUD/JPY – what’s to be said here – long of course with a stop a few pips below the 100-hour BB.

2015-07-22_EURCAD_update

EUR/CAD update – unlike ZN that one stuck with the script and I’m moving my stop to 1.414 now. You may recall that I am waiting for it to switch into trend mode. We are close but not there just yet.

We’re just getting warmed up – more setups below the fold:


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Decent participation here in recent days, given that it’s mid summer and all – keep it up steel rats!

Cheers,

cheesy

Who’s The Sucker?

The ongoing advance in equities continues unabated and I would strongly caution you against taking out short positions until the tape delivers us evidence pointing toward a reversal. Statistics mean exactly jack during low participation short squeeze periods, which is a lesson the Zero has taught us many times over the past few years.

2015-07-20_zero

Just compare the participation on the way down to the tiny signal range we’ve seen over the past few sessions. It is quite normal to see larger signal swings once gravity sets in, but this lack of participation on the rebound is a bit suspect. And in my book ‘suspect’ is not a license for taking out contrarian trades – quite on the… well – contrary. Some of you old timers may remember Whispering Saul, a trading legend from a different time who’s among a handful of candidates credited for an old aphorism which should be heeded especially during earning season: “If you enter a poker game and you don’t see a sucker, get up and leave – you’re it.”

2015-07-20_spoos_briefing

Following that advice I remain extremely skeptical about the equities side – in both directions. The daily panel is losing a bit of steam here and we have the S&P and Dow futures lagging the NQ. Still, until I see signs of real price weakness I won’t be touching this one with a ten foot pole.

2015-07-20_spoos_briefing_2

And the best place to look for such signs would be the hourly panel. However thus far it’s trailing its 25-hour SMA like a boss. This could easily continue higher for quite a while courtesy of over eager retail suckers with grandiose allusions of an ‘overdue’ reversal. Not to pimp my own ware but I think the Zero will be instrumental in offering us early clues, so I’ll be monitoring it carefully.

2015-07-20_GBPUSD_briefing_freebie

Cable is looking like a decent long here although that diagonal I painted is falling. So I’ll only deploy 1/3R here and would be prepared to flip for a short position on stop out.

A few more goodies for the subs below the fold.


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Now have fun but keep it frosty.

Cheers,

The Reckoning

For months now we have been watching equities flail around sideways, plotting increasingly spasmodic gyrations which have tested the patience of even the most battle hardened veterans. The recent series of gaps and overnight price jumps have only added to our growing list of evidence suggesting that we are witnessing an increasingly unhinged market. Adjusting to and surviving unscathed in such market conditions has been no easy task but I can truly say that we have negotiated some of the most challenging tape in years like bosses.

2015-07-15_weekly_spoos

But now the time of reckoning approaches and I want you all to take a deep breath, lean back, and detach yourself from daily chaos that has thrown your feeble minds into recurring tailspins. We are going to look at some weekly charts because it is there where some real magic is going to happen in the coming days. Let’s start with the S&P E-Mini futures.

First thing that stands out is that we haven’t really gone anywhere since late last year. I’ve covered that topic to exhaustion and will not waste our time on regurgitating this again. Volatility has been out of control and the current VIX reading of 13.37 is a big joke. One I plan to exploit to the max however. Look at that stack of weekly Net-Line Buy Levels which starts at ES 2113 and ends at ES 2122 – we also have one at ES 2118.

This is where the boys are going to separate from the men. Meaning – if we get anywhere near that I plan to accumulate a nice collection of front month lottery tickets (a.k.a. OTM puts). They are not going to cost me much and I will expect to lose all the premium. However at the off chance that the bulls drop the ball there – which I estimate at around 20% – 30% – they are going to print ‘una burrada de dinero’ as they say over here in Spain.

2015-07-15_YM_weekly

So yes, we are talking lottery tickets. Here’s the same view on the YM – the range between the Net-Lines on that one is actually a bit more narrow starting at 18089 into 18180 – barely 100 YM handles.

2015-07-15_NQ_weekly

Finally the NQ – here we are almost there which is why it probably should be our canary in the coal-mine.

I promise you it will take days for you to get that song out of your head again ;-)

But seriously – watch the NQ and note what it does as it’s starting to bump into those Net-Lines starting at NQ 4536. If it happily pushes higher then we should hold off and perhaps wait for new instructions. If it stumbles and encounters resistance then we may have a shot at exploiting what I would consider the fattest chance for the bears in a long long time.

2015-07-15_ZN_update

ZN Update – it’s looking good so far and I’ve moved my stop to break/even. And so should you! I’m holding this for a potential run higher on the daily – which makes this a daily campaign now.

2015-07-15_AUDNZD_update

Same idea on the AUD/NZD – another good entry yesterday and thus far it’s playing ball. First hurdle ahead will be 1.2 – if it pushes above it we may be able to enjoy another short squeeze.

A few more goodies for my intrepid subs below the fold:


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.

2015-07-15_events

A bit of event risk today – try to be out of CAD related pairs after the NYSE open. We also nave some Kiwi tremors after the close.

Now have fun but keep it frosty.

Cheers,




    Zero Indicator


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    2. Dangling By A Thread
    3. Paying Attention Pays Off
    4. Sell Off Thursday Wrap Up
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    6. Setups Setups Setups!
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    8. Who’s The Sucker?
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