The Squeeze Is On!

And as we all suspected – the squeeze in equities is officially on. In a little over a session we went from dangling by a thread near lows to threatening a daily NLBL. Unfortunately it was not a setup we felt comfortable taking. The tell tale signs were there and we reported on them – in particular divergences on the NYSE volume ratios plus a monthly NLSL had been touched and reverted. However Fed announcements are times when I stand aside – I’ve been through this game in 2007/8 a few times and then swore to stick with the easy tape.

2014-12-18_spoos_briefing

I did try some lottery tickets near the very lows but unfortunately got stopped out on that last late day drop on Tuesday. Yes it sucks but that’s how it goes. And you know the saying by now: Better wishing to be in a trade than wishing to be out of one.

Look at that NLBL on the daily panel – if it can be conquered today then the bulls are in much better shape. Not out of the woods just yet but they’ll have a pretty good chance to at least fight their way toward 2050. Let’s see if we can get there.

2014-12-18_ZB_briefing

Opposite situation on the bond side and it’s quite possible we’ll slide off the plate here. That hourly Bollinger is clearly threatened and if we don’t see green here soon then momentum will start kicking in.

2014-12-18_DX_briefing

The Dollar is scraping new highs – no setup here but it’s pure chart p0rn for this lowly expat :-)

2014-12-18_crude_briefing

I did however get to keep my crude longs. Of course those haven’t budged very much – just my luck ;-)

But they are still looking in good shape and I have now moved my stop to the break/even spot near 56.


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

Cheers,

Post Fed Musings

A lot of soft language came out of the Federal Reserve today, as expected actually. You will probably see a lot of nit picking regarding the actual statements presented by Yellen today, i.e. what does ‘transitory’ mean or how being ‘patient’ exactly chimes with the interest hike schedule set for next year. That’s all a lot of huey and I suggest you quite wasting your time interpreting FOMC tea leafs as the Mole is going to break it down for you:

  • We have seen crude prices being cut in half in less than half a year. Do you really think that was coincidence and natural market forces were at work? This was nothing but an economic hit job taken out on Putin.
  • They’ve now managed to not only cut Russia’s core energy revenues by half but they also managed to blow up the Ruble in the process, up to the point where trading was suspended yesterday.
  • And that certainly got Putin’s attention! Imagine the scene where his Swiss bankers very politely explain that Russia’s Ruble denominated assets are no longer margin collateral for trades or able to be used for wire transfers out of the country. I mean you’d have to think some of the top guys over there will be facing margin calls over long bets on western exchanges or USD denominated debt secured by worthless RUB assets. Ouch.
  • This is all part of what the British once referred to as the ‘Great Game’ and there was simply no way that our hapless Fed sock puppet Yellen was about to get in the way of the concerted bitch slapping of Putin initiated by the State Department.
  • Bottom line is that most likely we won’t see any changes to the interest rate hike schedule outlined for 2015 – it will more or less proceed as expected. However by generating doubt and confusion today it left enough space for imagination and thus keep the thumb screws on Putin.

And that’s how the game is being played, ratlings! I only feel bad for all those Russians who are caught in the middle – they are an acquired taste but I happen to really like the Russian people. You can say a lot about them but they are not hypocrites and they mean business – that means a lot in my book.

Anyway this battle clearly went to Obama but winning the war is completely different story. See, as a born German there’s one lesson they drilled into our heads when we were young: Never ever under estimate the Russian bear. Those guys are used to dealing with hardship and Putin’s popularity is as high as ever – the current situation may even give it a little boost. In the long term the Russians are going to dig themselves out of the current hole but this economic hit job orchestrated by the West (i.e. the U.S. and it’s Western alleys) will not be forgotten for a very long long time. I never understood why the West is so hellbent on making an enemy out of Putin.

putin_bear

But then again I’m a very small player and whoever is pulling the strings is fully aware of the points I’m highlighting here. I just hope the situation doesn’t escalate. The world is better off without a Russian nation thrown into  a deep recession, alienated from prior economic partners, and feeling threatened militarily. That could quickly get out of hand – black swan anyone? Never ever under estimate the unexpected consequences of your actions.

2014-12-17_dollar_update

So real quick a few snapshots of some key markets. The Dollar most definitely positive here and we may just hold that 25-day SMA now. Let’s see what tomorrow brings but I’m pretty stoked about this one.

2014-12-17_spoos_update

The spoos still bumbling about below their 100-hour SMA. We are at the 100-day but this candle is not exactly looking bearish. So there is potential for more ugliness.

2014-12-17_UVOL

Which is a bit surprising as we had solid buying mojo today – look here the UVOL/DVOL plots – green and very organized it seems. So maybe this is a last drop before it’s being punched higher?

2014-12-17_NYADV_NYDEC

I wish I could offer a definitive yay or nay here – the advancing/declining NYSE ratios also look positive. So I would have to conclude that we have a reasonable chance for at least an attempt to push this puppy higher. No setup opportunities though here. I tried a lottery ticket long yesterday and quite frankly this is not important enough for me to throw any more capital into this volatile tape.

Some more thoughts on crude below for my intrepid subs:


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Cheers,

When There’s Blood In The Streets

You surely have come across the old aphorism coined by the Baron Rothschield, an 18th century British nobleman and member of the ultra secretive and original one-percenter Rothschild banking family: When there’s blood in the streets – buy property.

2014-12-16_fear

However that does not mean you should blindly step underneath a falling sword. Either you know something nobody else knows (which is illegal but clearly was the modus operandi of 19th and 20th century tycoons), OR at minimum you need to see some technical context that justify jumping into some lottery tickets. Given the level of fear across various verticals today I set out to take advantage of the situation. And I did find three charts that tickled my fancy. One of which I’ll throw out for free:

2014-12-16_crude_setup

You probably guessed it – crude. Not much context here on the daily but we are dangerously close to the 50 mark and that’s where we also find the lower 100-month Bollinger. Will we see 48, 45, or even lower? I really don’t know but wipe outs like these are usually where I start looking for some short term context. I do like the hourly panel (very left) and have taken out an experimental 1/2R with a stop below today’s lows. Heck if I’m wrong we’ll be pumping gasoline for free by the end of the year!

FYI – in that context: Here in Spain gasoline prices have barely moved despite a drop of crude from 104 to 54 in a bit over a month. I can’t say that I understand all the dynamics of crude production and refineries but I do know when I’m being gipped.

Anyway, two more lottery tickets below the fold:


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

Play these setups with only 2R combined max - if you want to be conservative reduce your exposure to 1R total. We are talking lottery tickets here people!

Cheers,




    Zero Indicator


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  3. recent misdeeds

    1. Freaky Forex Friday
    2. Better Not Fighting This…
    3. The Squeeze Is On!
    4. Post Fed Musings
    5. Strap On Your Helmets
    6. When There’s Blood In The Streets
    7. Monthly Support
    8. Thrashed
    9. Under The Weather
    10. Not A Game For Adrenaline Junkies