My Spidey Sense is Tingling

Doing my morning work this morning, a change of market weather is apparent. My strategies have been going through a period of super performance, so any change is unlikely to be for the better, and it is interesting that Scalpius (non correlated alpha) has switched into super performance mode.

Screenshot 2015-08-13 07.58.40

The EURUSD has made a classic bear flag and then FAILED to go down. This market is ripe for a short squeeze. Also, if you look carefully, you will note the increased size of the candles towards the end of the strong trend. This is an increase in volatility, indicative of a fear of missing out of the move, also a classic sign of the end of a long running move. I would  not want to be short EURUSD at this point. A short squeeze after a year of trend is going to be sharp and violent.

Screenshot 2015-08-13 07.58.25

The Yen weekly shows (for those wave wankers in the audience) a classic completed 5 wave move and a completed A-B of the next move. Now, this by itself doesn’t mean shit, but there are times when wave theory plays out correctly (just not enough of the time to get an edge). What I am particularly interested in is that after 7 months of sideways action from November through March, we could only limp up to fresh highs. Then after making fresh highs we tested the old highs with 6 weeks of down/sideways action. We SHOULD be shooting up on a fresh leg up by now. The fact that after 6 weeks we still have not recaptured the old highs is very very very stinky. Given that USDJPY is very affected by China’s joining the currency race to the bottom, this is the perfect macro event to provide a backdrop for change of trend. I’m actively looking for short setups here.

Screenshot 2015-08-13 08.02.18

The DXY index has made a classic (but rare) double top, and instead of retesting the high is just falling off the plate to the downside.

Screenshot 2015-08-13 07.58.01

AUDUSD is the pick of the actionable trades today, and I’m long here. Stop at the daily lows is a very nice place, well protected by a sideways flat bollinger band. Again we have a long running downtrend which stopped going down cleanly, indicating that two sided price action is in the game again, and a bear flag which failed to send the market down. This is a particularly nice setup, though I wouldn’t be surprised if it takes some heat before taking off.

Be careful in the current treacherous environment.

Scott Phillips

Time To Bitch Slap Old Bucky

The Fed is pretty much running out of options at this point. Their current modus operandi is to continue pretending that they want to raise rates but without real intentions of doing it anytime soon. Every month we are being served another paltry excuse as to why they’re still hesitant or that they’ll assess their timing based on the economic data. Perhaps next time it’s the humidity or waiting for the moon’s phase to line up properly.

Which means that among the few tools remaining in their arsenal to to keep equities afloat is to stomp on the Dollar once it approaches escape velocity. And given the Greek drama the timing couldn’t be any better to stick it to those dreaded Dollar bulls. And that’s going to be our theme of the day. Not because I say so but because quite a few USD related Forex symbols have moved into sync over the past few hours.


For starters I’m grabbing a long here on the EUR/USD with a stop below the recent spike low. If the 100-hour can’t be held then we’re going to see quite a bit more sideways churn or perhaps even a revisit of the recent lows.


AUD/USD is looking pretty juicy here as well and I’m long with a stop below its recent spike low. Also nice to see the daily far outside the 100-day BB. Now it’s still early days here but if this thing bounces it’s high time – if it doesn’t manage a reversal here it may fall off the plate and turn into a trend trade to the short side. So short positions on a stop out may be possible here.


The E-Mini isn’t among my favorite charts right now but if I don’t talk about it you guys are most likely to ride me out of the lair on a rail. So here you go – a possible long setup on the spoos if it drops to 2050. May not do it though so don’t chase it.

More goodies below the fold for my intrepid subs:

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


The One That Got Away

You may think that I’m referring to my short positions in the spoos but you would be horribly wrong. Saw that one coming a few miles out and exited at break/even as previously planned.


And also as previously planned – I am long since 2112 with a stop below 2105. Let’s see if we finally get some directional tape, but who knows. I’ve managed to traverse this sideways mess this far without getting my ass kicked but something tells me to better not test my luck. There are limits to Ms. Market’s patience – even for the mighty trading Mole.


Now what I was referring to in my title is … gold. You may remember this one from two days ago. I saw a potential break out chart and was waiting for a teeny weeny dip to the downside to grab some longs. Only problem is – it never happened and I didn’t get my fill.


If there is one thing that absolutely truly annoys me is when I read the market right and for some reason don’t get a seat on the bus. I know – I should listen to my own advice – better wishing to be in a trade than wishing to be out of one. Rub it in! Instead I choose to console myself with the campaigns that are running as planned.


Natgas – very sweet entry that same day actually and it’s off to the races. We’re now touching the 25-week SMA and as you can see the 100-day BB is narrow as hell. I say we have ourselves a runner here and I suggest you let this sucker run all the way.


CHF/JPY – equally perfect entry and it already bounced against a NLBL – thus far it’s unable to muster enough mojo for continuation higher. I’m moving stop near 129.80 – let’s see if she can bounce from the daily lows.


AUD/USD – excellent progress so far although the past day or so is looking mixed. Again I’m trailing here – this time I’m using a daily NLBL, expecting support nearby.


EUR/GBP – it’s been ‘meh’ but it’s holding thus far. My stop is now at break/even – only giving this one 30% chance to resolve successfully.

Speaking of the Euro – I have put together some long term EUR/USD perspectives for the subs. Please meet 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!

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


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