Thursday 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.


The Euro is shaking off some overeager longs this morning but call me skeptical – I doubt that this has legs. As long as I keep seeing articles suggesting a reason for the big Euro squeeze to stop it’ll just keep on running, like the energizer bunny.

I can honestly say that this is one of the few commercials I ever missed seeing. Brilliant idea and they should relaunch it. Anyway, back to the Euro – I’m waiting for a long entry near that 100-hour SMA – it hasn’t even touched that one, so I don’t know why people are looking down.


Natgas – still at the knife’s edge – I’m grabbing a long here with a stop below 2.748. Those hourly BBs are really compressing and I’m about to be either horribly wrong or horribly right. 1/2R only for that very reason – tough to get a fill on your stop once she runs off.

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.


Soft Support

In yesterday’s post I mentioned the term ‘soft support’ which is a term I personally use for bounce zones which look great after the fact but are very difficult in the context of placing actual trades. The 25-day SMA on the E-Mini was a string candidate of providing only soft support yesterday – so let’s take a look:


The human eye is rather subjective – especially so with candle charts as we see things we want to see, in that we interpret information in favor of our personal state of mind. If you just glance at the daily panel then the 25-day SMA appears like a great opportunity to play the bounces. However the long wicks piercing it tell a different story. I was almost certain we would see a bounce higher near the end of the session but timing an entry would have been perilous as you can see by the long candles accompanying the lows.

That’s what I mean by soft support – looks great on a chart in hindsight but it’s useless as an inflection point for placing entries or managing your campaigns (e.g. exits when short, trailing stops, etc.).


The NQ is looking a little bit more solid and I’m long here with a tiny tiny position (1/4R) with a stop below 4410. Expectations are low which is why I’m employing funny money.


The short squeeze across all Euro crosses has continued and for me it’s now time to exit my campaigns as my targets have been fulfilled. The EUR/USD is touching the 100-day SMA, which doesn’t mean the short squeeze is over by the way. Notice the complete lack of context in recent history – could easily just pierce through and squeeze higher. Never ever under estimate short squeeze potential on the Forex or futures side.


The EUR/JPY also pushed beyond target and I’m out – that was a great run and this campaign alone more than compensated me for the attrition accumulated during the shenanigans of the past two weeks.

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

A week ago I proposed that all of you would sit down over the weekend and draft a few short paragraphs outlining your personal goals in respect to becoming or advancing as a trader. As usual my expectations were low but I was unprepared for the thundering silence I have seen in response. So clearly here’s the main reason why so many retail traders fail in this endeavor – they don’t even know where they are going! Trading is like any other business you embark on – if you show up for a presentation at an investor and are being asked what your major milestones are then your response should not be ‘uhh – to make a lot of money!’

So here’s your second chance  - remember, you’re not doing this for me, you’re doing this for yourself. Please sit down this weekend and ask yourself where you want to be a few years from now down the line. Having established that write down exactly what are you willing to do and what you are willing to sacrifice. You are welcome to share whatever you are comfortable with on the blog next week – if not then I recommend to do it for yourself.

Taking The Next Step

Since we’re on the subject: Over the past few years I have regularly been approached about managing other people’s accounts and although the idea is of course tempting I didn’t feel like I was ready to make that leap. Another aspect of my hesitation was that running a fund would change the dynamics of what I do here  on the blog. Plus in order to legally set up a fund I would have to get licensed as a CTA – and the red tape involved (e.g. annual NFA/CFTC audits, solicitation, the paperwork, etc.) frankly is not something I ever want to deal with.

However the market place plus pertinent technologies in the trading business have advanced where setting up a traditional fund really isn’t necessary anymore. As a matter of fact over the past few years I myself shifted my business toward that of becoming a signal provider . The first step toward doing that were manual email and text alerts just like those some you existing subs are getting from Thor and CrazyIvan.

Naturally, trading accounts manually via alerts isn’t for everyone and the next logical step for me is to set up a master account to which client accounts can be linked. The possibility of doing that occurred to me a few years ago when I came across a pertinent article, and I have been working toward that goal ever since. My main requirement however remains that I want to act as a pure signal provider, thus avoiding the formation of a fund, the licensing, regulations, and the associated complexities in managing it.

Now apparently there is a way of doing just that and over the past few months I have engaged in negotiations with a U.S. broker which is already set up to host such a master account tied to any number of client accounts. All trading activity on the master account is copied to the client accounts via a lot allocation management module (LAMM). Clients set up and fund trading accounts with the same broker, but unlike in a traditional fund scenario they have complete control over their accounts and can detach at any time. Authorization to accept the signals provided by the master account is given via a letter of direction (LOD) – and that’s pretty much it. The arrangement is extremely flexible and you simply pay monthly subscription fees as right now with Thor or CrazyIvan. There is no profit sharing and no annual management fee.

My plan is to start out very small with a handful of people who already have expressed interest in the recent past. If you are interested or want to learn more than feel free to write me at admin@ and I’ll be happy to answer your questions. Be advised that the minimum account size would be $100k – below that it wouldn’t make sense for me as various futures contracts would be out of reach (e.g. silver or copper). The systems I consider trading in this scenario are Thor, Thor.0, and CrazyIvan. The latter has always been tough as a manual system but given the rising equity curve it’s definitely worth adding via automation.


Thar She Blows!

Is it true? Could it be? Someone please pinch me because it looks like we may just have departed this dreaded trading range which has been the source of much stagnation and whipsaw as of late. Well, let’s not jinx it – shall we? The session still has another hour to go and we haven’t really punched into fifth gear just yet.


Here are the E-Mini S&P futures – a.k.a. the spoos (technically that’s the big contract but anyway) – nice punch higher here when most of us expected another trip to the downside. Yes yes, hindsight is 20/20 – ain’t it? Which is why I suggest you don’t beat yourself up and remember – it’s much better wishing to be in a trade than wishing to be out of one.


Thor actually grabbed a long here last night – I only took 1/2R as I’m a highly suspicious here. Plus YM is lagging the spoos it seems but hey, let’s see how she flows.


Cable update from this morning – so far so good and we’ve got a decent chance to breach that daily NLBL. Next hurdle would be the 100-day SMA but let’s address that if/when we get there.


CAD/JPY – one of my favorite charts in my roster right now. We took an early entry yesterday and the actual IP long trigger was a few ticks higher. Which ever you took – so far it’s looking fine but we can’t rule a retest of the 100-day SMA, which is still falling, let’s not forget that. So we are far from being out of the woods here.


Crude – definitely out of the woods on that one. My trailing stop was never threatened and I’m keeping it here as I don’t want to be swiped in case we see a stop run lower before she blows. If it manages to pass 59 we are entering short squeeze territory – wouldn’t that be a shame… ;-)


Bonds – no setup here, just a general observation. I’m actually short ZB via Thor and it’s looking good but has not locked in the 2R mark just yet. IMO this thing either falls apart right here or we’ll see another trip higher.

I’ve got some setups but will reserve them for my intrepid subs:

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.


    Zero Indicator

    Darth Mole Alerts

  1. poll

    • How many discretionary trades to you place per month?

      view results

      Loading ... Loading ...

  2. NinjaTrader

    search warrant

  3. recent misdeeds

    1. Equity Curve Filters And Compounding
    2. Pre-Memorial Day Freebies
    3. Scaring The Children
    4. Wednesday Morning Briefing
    5. Introducing LAMM Based Auto Trading Service
    6. Campaign Updates
    7. Monday Morning Briefing
    8. Curb Your Enthusiasm
    9. The One That Got Away
    10. Crappy Morning Briefing