No Prisoners!

Round and round she goes. I think at this point we are way beyond the patient threshold of even the most callous market participants. Fortunately we have movement on the forex front which offers us a much needed reprieve from the eternal gyrations in the equities woodshed.


I managed to hang on to my E-Mini shorts by a thread – that poke 2051.75 stopped me out but I jumped back in a handle lower with a stop above 2052. Right now we seem to be sliding lower but I’m playing with funny money here so I don’t really care what happens (but I’m still holding SPY lottery tickets from last week).

If we drop lower then I think that 2022.75 is probably going to stand as a first line of support. The lower 100-hour BB awaits there and so is the daily NLSL with the 25-day SMA right above. And if that one gives we still have the 100-day SMA and a daily NLSL at exactly ES 2007. So quite a lot of support waiting below us.

Please don’t take my exposure as any predictive/directional bias – I’m playing the tape as I see it and there is no telling where she’ll swing tomorrow. Mrs. Market is in a shitty mood this month and she ain’t taking any prisoners.


But let’s get to the good stuff – forex is looking juicy this afternoon and we’re having ourselves a helping. Here’s cable which I want as a long above 1.5235 – my stop will be below 1.52 and change.

More below the fold – please join me in the lair:

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This ought to keep you guys busy for a while – get to work!


It’s A Long Way To The Top Or Bottom

Extreme exhaustion – I can smell it here in the comment section and all across the financial blogosphere and media. And if you’ve been hanging around the lair for more than a few days then you already know my modus operandi for dealing with one’s emotions – be those of the positive or negative variety: Acknowledge their presence, count to ten, then smile and stomp on them immediately. For we know what they are: annoying distractions at best and hurdles preventing you from banking your ill gotten gain at the very worst.

Look guys – at this point we don’t know what we’re dealing with here. And you know what – you don’t have to know, embrace the fact that you will never ever know what direction the tape will choose today or tomorrow, let alone sometime in the distant future. Predictions are for pikers. But what we do know is that it’s either a LT top or it’s a sideways correction with more upside ahead. And in each case the resolution will be boisterous and full of entry opportunities. You don’t have to trade today but you always always should prepare for taking trades tomorrow. Because just when the tape looks the most confusing the best entry opportunities happen to present themselves.

So this is what we don’t do:

We don’t get drawn into the swings and we don’t get emotional. Instead consider why the market swings in gyrations right now – the purpose is to exhaust participants and to draw them into emotional decisions. It’s a long long way to the top – or to the bottom. Meaning: Corrections near inflection points can take a lot longer than most retail traders care for or are able to imagine – most employ a lack of patience in combination with wishful thinking.

But ask yourself this: What really has changed from early January? We are still near the 2060 mark and now the resolution is nearer than it was five six weeks ago. And that’s good news right?

So this is what we’ll do:

First we analyze where we are right now and if we have an entry opportunity. Let’s start with participation:


Of which there is almost nothing today – see that flat line on the Zero Lite? It suggests that buying interest has dried up just when the bulls seemed ready to rip this thing higher and break the bear’s back.


UVOL also looks rather meager today – where are those bots today? All of this smells like either a big bear trap or distribution as institutionals are closing out long positions and prepare for more swings. But how do we know?


Well, remember, we don’t. But we don’t need to know as we’ll use the short term panels to guide us until we get closer to our daily inflection points.  We’re still a bit too far from that daily NLBL at 2055 and if I want to get short I would prefer if we climbed a little. On the hourly we look in good shape right now and thus if you’re long I would remain long until that 25-hour SMA stops giving support. Once/if that 25-hour is starting to be threatened then we can talk about possible short positions but I think it’s a bit early for that.


Alright, I can’t believe I’m giving this one away for free but here we go: GBP/JPY – once again we’re taking early clues off the hourly. Which means long right now with a stop near 178.2. If that one gives I’d love to be short with a stop above the 25-hour. The potential for this campaign is rather interesting – see the daily and weekly panels. Whatever direction it’ll pick will most likely turn into a runner. So keep your eyes on this one!

I also dug up several juicy futures setups – please join me in the lair:

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Have fun but keep it frosty!


The One That Got Away

Unfortunately there is one chart I somehow forgot to post last night. Which is a shame as it was one of my favorite setups: crude.


I grabbed the March contract near 50, just above the NLBL and the 25-day SMA. For some reason the chart fell through the cracks and when I saw it this morning I realized that I hadn’t posted about it. So here’s what happened since then:


Judging by the beautiful ramp on the hourly panel the squeeze is on! Sorry about dropping that chart last night! Anyway if you happen to be long crude then do nothing. It’s possible that the 50 mark is being re-tested but odds now support that a LT low is in place.


Otherwise I don’t see much I really like this morning – plus I’m treating lightly in this crazy tape. The 10-year bond futures may be a good long above 130’300 – stop below the 100-hour SMA near 130’160.


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