Well Positioned But Skeptical

I’m a bit on the fence when it comes to equities today. Although this morning’s NQ entry (or the one on the spoos if you weren’t a sub) played out very nicely thus far, I’m not convinced that this isn’t just yet another fake out spike before it turns on a dime again. So call me positioned in the right direction but skeptical – for now.

This is the general thorn in my eye and it’s also present on the EUR/JPY: a pretty juicy divergence which however has not managed to exert gravity just yet. FWIW – there’s nothing divergent on my ST volatility and momo charts.

And that’s where I got in as per this morning’s evil plan – 1/2R at the second touch of the IP trigger this morning and another 1/2R when it pushed above 3600. On the spoos it also was an IP and I proposed the second half R above 1880.

Speaking of which – seems like we’re back at the 100-hour SMA and that is where we’re currently running into a bit of resistance. Let’s see how the EOD plays out….

Nice setups today but since I don’t see you leeches being active I’ll keep them all for my intrepid subs ;-)

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Ides Of May Wipeout

I expected more downside yesterday near the close of the session but frankly this is a bit more than I had in mind. As usual the MSM is doing their very worst in trying to pin today’s equities wipeout to anything resembling a bearish soundbite (and having a very tough time doing so) – after all in their little bubble universe it’s the news that drives the tape, isn’t it?

Well, where were all those ‘bears’ yesterday or Tuesday when the SPX touched 1900 for the very first time? Riiiight. I guarantee you that the vast majority of bears completely missed the boat on this sell off – of course if you visit their usual watering holes today everyone is busy high-fiving as if they’re been short since the S&P was tickling the very top.

Sorry, I couldn’t resist but that’s how I roll. And I concede that it was a subtle hint – not enough to bulk up on shorts yesterday. But good enough to keep out of long positions, so I consider myself lucky. This is yet another point for the GBP/JPY to ES futures correlation – it has kept us out of trouble on several occasions now.

With a bit over an hour to go we finally managed to kiss VWAP on the Zero Lite. That’s a meager bounce after such a freefall and the bulls have to do a lot better than that. Perhaps this is the beginning of the end.

Clearly the bots are running the game again today. Very nice smooth sell curve and only spasmodic buying. Of course this has implications – meaning we could be seeing a quick reversal here soon. I hate to say it but once again a very lousy spot to take long entries.

You may remember the message I offered to the bulls the other day – 1880 needs to hold or the bears are going to rape you. Well, that message doesn’t seem to have been received as we’ve been scraping 1860 today (gasp). A very concerted effort to push the tape above 1870 is now required to pull the cart back out of the mud. This probably has to happen today as a close below the 25-day would be very bearish – no prior close below has not drawn us back to or below the 100-day SMA. And it may get worse from there.

And now that we’ve dropped 30 handles it’s probably fair if I share the latest snapshot of the daily Zero which has been painting a pretty distinct divergence for weeks now. Of course one never knows when these things resolve. But it is something to keep in mind IF we see a dead cat bounce here. I think the bulls are starting to be in big trouble here and Tuesday could have presented an exhaustion spike before a medium term trend change. Let’s not jump to conclusions – but keep collecting evidence.

Updates on our recent victims – as hoped wheat has been running like a champ and we are now putting our stop at the 2R mark. This is the second consecutive campaign in the past two weeks and it’s been very profitable. As I said before and I say it again – equities are mostly a distraction from the good setups that are out there every single day.

Gold has been less cooperative and failed at the ‘make or break point’ I highlighted yesterday. We now find ourselves back below the IP trigger at 1299 and someone you all know wishes he would have closed this one out at 1R yesterday (hum hum). However you may recall that I modified the stop quite a bit down to 1280 and with reason. This triangle formation will be instrumental in determining the direction for the next quarter. It is possible that this resolves to the downside but at this point it’s a bit early to switch sides.

CAD/CHF didn’t manage to bank 1R in three sessions and we are out of here with a measly 0.5R profit. Meh – better than a kick in the shin but given that we were at 2R this morning it’s a bit of a pain. But there goes again the old lesson regarding paper profits ;-)

Copper is looking pretty good today – as it did yesterday. Now we’ve got an IP candle (another one) and although I’m already long I may add a contract on a breach above the 100-day SMA. Will be definitely closing out and be short on a breach below today’s lows. Note the weekly context as well which as us right at the 25-week SMA. Good stuff and this is a solid setup.

Not much else I would want to touch today – let’s give it a boring sideways session tomorrow to let things settle down a bit first. See you guys on the other side.

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.


Fish In A Barrell

While most of you leeches remain hypnotized like moths by the spasmodic flames which are consuming hapless victims on the equities side, we stainless steel rats have been banking coin courtesy of the laundry list of AAA graded setups I have been delivering here on a daily basis. I told you guys you’re going to miss out again and this time was no different.

Let’s start with the obligatory spoos update. Not much to be said here – we’ve got a total flatline on the Zero Lite which means there’s no participation today. Could mean anything and most likely it’s a bit of a shake out before they ramp it.

However, we may not be done yet – quite a distinct divergence on the GBP/JPY today.

Same on the EUR/JPY – short term it’s pointing down. Possible we may see a further slide on the equities side EOD.

NZD/USD – I told you guys to get back in on a second breach and that happened today. Banked us 1R today and I actually intend to keep this one open as well. My new stop would be at b/e.

Wheat – our first campaign earned us 1R and we just banked another courtesy of the IP we painted yesterday. Judging by the overall pattern (left panel) we may have a runner here. Thus I have decided to keep this thing going even if we close back above the 1R mark today.

Copper – back at the trigger point – this is your 2nd chance to get in.

Gold – now at its make or break point. If it pushes above 1310 then she’s going to take off like a rocket. That was one sweet entry and had you been a sub you would have known about it (hint to you leeches).

Dollar – looked at that position when I came back from the gym and I couldn’t help but laugh. Didn’t I say it always pays to bet on Dollar weakness near major inflection points? That short right below the daily/weekly SMA combo paid off nicely. Plus there’s a new setup on the table – more below.

CAD/CHF – IP trigger yesterday (we subs got in late and avoided the shake out) and she’s off to the races. Again I’m leaving my stop at the b/e point.

So there you have it folks. I’m trying to make this as easy as it gets but in the end you guys have to pull the trigger. That said, let’s get to the setups – we have a plenty!

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.

Have at it boys and girls – FWIW, I would enjoy to see less P3 talk and more constructive participation here. I’m glad everyone’s finally showing up to work but is anyone banking coin? Participation here is not a rite toward becoming a successful trader but it sure helps.


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