I’m Buying

The intoxicating smell of fear is in the air and I’m ready to buy as we are scraping previous support/resistance level near SPX 2040. Don’t get me wrong – the odds are 50/50 here but it’s the second best opportunity before the bullish case dies for a while. The final line in the sand is 2033.5 after which the bulls will get stomped on by Santa Bear.


The levels are almost identical on the December ES contract but as we’re about to roll over I am grabbing the March contract (ESH5) which is trading near 2037 right now. If we drop through SPX 2035 I’ll be short with a stop above SPX 2040 (on the ES futures equivalent levels).

UPDATE 1:50pm EST: I’ve been parsing around and although there is plenty of movement across the board I’m seeing an increasing number of traps and fake out moves over the past few days. Treacherous tape and on my end I took a few hits this morning (exception being USDCAD and ZB). The way it’s looking the current long position I mentioned above is going to bite the dust shortly as well. Which tells me that it’s time to slow it down and not get caught up in shake out gyrations.


On the other hand this is good news as I was hoping for another leg down and the way it’s looking right now we’re going to get it and then some (i.e. very juicy sell signal on the Zero). I expect to take 1/2R short on stop out near SPX 2035 but leave it at that. FYI the Zero is still showing the old contract which is almost on par with the SPX.


Since I only have one other setup I’ll throw it out for free today. Gold is looking pretty good – bidirectionally. We’ve got an NR4 and IP just below the 100-day SMA. There is no rush of course as I expect a few make-everyone-guess candles before it picks a direction. But the IP at this inflection point is a good basis for getting positioned.

UPDATE CLOSING BELL: Moving stop to ES 2035 (break/even) now. That was quite something! Let’s see if we get continuation lower now.


It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.


Forex Wednesday 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.


I’m highly skeptical about equities this morning – it looks a lot like it’s about to drop lower. Which is exactly why I am taking 1/2R long here near the 25-hour SMA. Emotions are a great indicator that the tape is affecting your judgment. Best to fade it and technically this is worth 1/2R.


Plus we have a TON of other markets to get busy in this morning, especially on the Forex side. AUD/NZD – I’m long here with a stop below 1.077. Why so low? Because it has a recent history of shaking out early entries and then run off the opposite direction.


Gold – waiting for a long entry here above the NLBL at 1235.6. My stop would be below the recent low at 1225.

Quite a bit more waiting below the fold – please join me in the lair:

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!

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


An Impending Trend Shift?

With the exception of equities we have been seeing a pronounced shift in market behavior across the futures as well as in Forex. Once again it drives home the point that one’s approach has to constantly be gauged and if necessary modified in response to shifting market phases. Or in other words - none of your trading strategies/approaches work all the time – the trick is to apply the proper market strategy to each discrete market phase.


Gold for instance has been stuck in a pretty uneventful sideways churn for most of the year. Hunting for an trend trades on the precious metals side would have been a total waste of time which is why we barely touched it all year. Just look at the P&F chart above – note that the part covering 2014 is a quarter of the size of that of 2013. Reason being – P&F charts do not track time – they only focus on price, which is why I appreciate them. If there’s no movement then no boxes are added to the chart.

That may however soon change. Gold just painted a low pole reversal warning and that means the bears are officially on notice. And as coincidence would have it we do have a promising setup on the roster today:


We have a nice hammer formation there on the daily panel – right underneath the 25-day SMA. I would take a breach of today’s highs with a stop below yesterday’s lows (today’s a bit low for my taste). Pretty simple setup but be aware that it’ll most likely try to shake you off. When it comes to precious metals every campaign has to be earned.


The EUR has been among the trending charts this quarter – but until August it had barely painted any boxes on our P&F chart. Then Draghi announced a whole new battalion of printing presses in response to lackluster GDP growth in the EU and the rest is history. I have been enjoying the sell off quite a bit as you can imagine but the downside ride may be over soon as we are but a bagel throw away from producing a low pole reversal as well.

Are We Due For A Trend Shift?

Now if both the EUR and gold turn then it may also mean that equities are due for a much needed correction. Seasonally however that would be an incredibly inopportune time for the bears. Not that the Santa Rally is chiseled in stone but it’s rare to see any significant corrections this late in the season. Not to second guess what may happen next (which is usually out of touch with reality at any rate) I have decided to simply keep my trailing stops where they are and let the chips fall where they may.

That’s all I have for today folks – nothing exciting to report on the setup front. And quite frankly – given the recent gyrations across board I am a bit cautious and when my Spidey sense tingles it’s usually good medicine to remain extra selective when picking entries. See you guys tomorrow.

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.


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