Muppet Time!

It never fails. Despite all efforts to the contrary a handful of you retail rats accidentally find yourselves in the midst of a winning campaign. Invariably early withdrawal symptoms to your expired ADHD meds are starting to appear as the urge to do something (i.e. take profits now or otherwise ruin your odds of long term profitability) is growing by the hour. After all, winning is not something you are accustomed to and there’s no social media support network backing you up as everyone now hates your guts and hopes for an opportunity to urinate onto your shallow grave. For it is lonely at the top and you are on your own.

Now I have tried many times to drill this point into your rodent brains but apparently the reflexive Pavlovian response is tantamount to my childhood attempts of stacking snausages onto my dog’s snout. Very rarely do you get a to a count of three as Woofy simply can’t wrap his canine brain around the fact that the longer he is able to wait the bigger the pay-off. In the end all this boils down to the fact that the half-life time of your ability to sit still and do nothing is shorter than that of your average field mouse.

The-Muppets-1

Now, to answer the question on your mind: Yes, and no. It all depends on your trading style.

Oh, what was the question you ask?

Is it a good time to take profits here?

Well, obviously it’s a great opportunity to shake out the muppets. Look at the chart below and what I posted yesterday. If you got positioned when/where I told you to on Monday morning then you are an honorary member of the strong hands club right now (no secret decoder ring). And this grants you the rare luxury to do nothing and let things run its invariable course. For every time you are in an ongoing campaign there is only one equation you should be concerned about:

What is the ratio between opportunity and risk right now?

2014-10-22_spoos_briefing

Meaning, what are the odds the tape is going to advance (or drop) more than the odds for it to reverse and stop me out (wherever your stop is). This is not an easy answer and it depends on your trading style. For automated systems for example I painstakingly measure the average MFE and MAE of each system and then use those statistics to arrive at an optimum campaign management style.

For discretionary campaigns you employ a fuzzy logic approach based on your pertinent experience and again your trading style, which can be shifted as the campaign unfolds and new evidence is revealed. That however requires strict personal discipline and that right there discounts 90% of all participants. I know I know – the truth hurts – you can blame your Kindergarten teacher or some dramatic childhood experience if that makes you feel better. Believe it or not – I don’t come here to stomp on your fragile egos – no matter how tempting.

2014-10-22_1510

Now for me personally here right now I am more concerned about the possibility for the bears to have their faces ripped off. And the odds are about 50/50 that this will happen in the coming week. However we still cannot discount the the possibility that we may retest the lows or drop even lower. Plus today’s event schedule offers a ton of opportunity for monkey business across the board. The bears still have a prayer of a chance to turn the table as long as we remain below the 25-day SMA.

I for one am perfectly happy to endure a deep retrace because if this eventually continues higher I’ll be holding it all the way. And if it fails – well, I’m out at break/even. So my worst case sceneario is to lose nothing and the best case scenario is to smile all the way to the bank. Again. Remember the Dollar campaign two months back. Same idea and same approach.

2014-10-22_crude_briefing

On the setup side I really like crude this morning which seems to be gaining a bit ground. Besides everyone hates it right now which increases the odds of a little surprise squeeze. I’m putting half an R on long above the 25-hour SMA – stop below 82.


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.

Words to the wise:

The-Muppets-2

For some of you it is important to realize that trading is not a spectator sport. Invariably you will get the crap kicked out of you a few times and everyone processes that experience in different ways. Some simply walk away, others dust themselves up, learn their lessons and jump back into the ring. But there are many who cling onto the dream and at some point decide to become some sort of couch coach. A lot of self deception and pain avoidance is at play here but essentially it makes you feel as if you’re still part of the game. ZeroEdge is full of these people – the vast majority of them haven’t executed a trade in years.

Drawing lines on a chart and talking about it doesn’t make you a trader – only placing trades and accepting the invariable consequence of either winning or losing does that for you. Even if you’ve had a tough year and you may decide to sit things out for a while there will come the day when you have to get back on the horse. When you’re at that point we are here to help you and guide you along. But it’s unproductive to come here post some illustrious charts without intent to use them for trading. At best it’s a boring academic exercise and at worst it’s a waste of your and our time.

Cheers,

 

Mad Monday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

2014-10-20_spoos_briefing

Put your game faces on folks, judging by this morning’s activity it looks like we’re going to have a busy week. Equites are now near the make or break point. Short term this is an awesome opportunity to be long with very little risk. Simply put your stop below the 100-hour SMA. If we drop through it we may bounce back bear trap style but the bullish case would be extremely vulnerable. We don’t have a crystal ball but the odds are good here. Even worth being stopped out once or twice – so keep your position size small and build it it up as you go.

In case you wonder – yes, being short below the 100-hour is encouraged if we drop below it. But there will be attempts to reconquer it and unless your stop is above 1890 odds are you will be swept. No exact science – it depends on your trading style. But this is a major inflection point that will determine the direction for the coming weeks.

2014-10-20_NQ_briefing

Similar view on the NQ but not as dynamic – the 100-hour is now pushing sideways which means it can serve as the line of scrimmage to kick this thing higher. If it fails the bulls will find themselves in a world of hurt.

2014-10-20_EURUSD_briefing

Oh how much I wish this setup would fail but much to my chagrin it’s looking very very good. So I’m long here with a stop below the now rising 100-hour.

Quite a bit more waiting below the fold – secret decoder ring required:


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.

You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

Cheers,

The End Of The Beginning

We are seeing tepid signs of buying interest but it’s not exactly convincing – at least not thus far. We need to see a lot more mojo down here as we have reached the last line of defense - a slip up here and it’ll be one long cold winter for the bulls.

2014-10-14_spoos_update

That drop below the lower 100-day Bollinger should have never happened – but it’s on the books now and there will be consequences. The only remaining level of support that’s keeping us from falling off the plate is the (very much untested) lower 25-week BB and thus far it seems to be holding. Let me be clear: A drop below 1850 will open the floodgates and we most likely find ourselves at 1750 or lower.

Bottom Line: The bulls have a vested interest in holding 1850 – for below it the abyss awaits. But whether or not we bounce here – this is BAD and most likely it’s not the end of the story. To quote good ole’ Winston:

“This is not the end, it is not even the beginning of the end, but it is perhaps the end of the beginning.”

2014-10-14_crude_update

Talking about falling off plate and all – here’s another recent turkey – crude. Wow – that’s a massive drop and it very much resembles what we’re seeing on the equites front. Just worse. We are now on death watch and I’m posting the LT chart for a reason. What we need here now (imagine Winston saying it) is last kiss goodbye maneuver, after which we will deploy our troops to deliver the final death knell. The Mole will be on the case here – that much you can bet on.

One measly setup waiting below for the subs – but it’s a good one ;-)


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.

You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

Cheers,





    Zero Indicator


    Darth Mole Alerts

  1. poll

    • What is your average spread on the EUR/USD?



      view results

      Loading ... Loading ...


  2. search warrant


  3. recent misdeeds

    1. Quiet Friday Morning Briefing
    2. Thursday Morning Briefing
    3. Muppet Time!
    4. Hurdles Ahead
    5. Elvis Has Left The Building
    6. Mad Monday Morning Briefing
    7. I Robot
    8. FEAR
    9. Falling Swords
    10. The End Of The Beginning




  4. yes we can!



    NinjaTrader
    Kinetick