Long Term Support

Something rather interesting happened yesterday during the E-Mini session. Granted it was a bit subtle but perhaps some of you veteran subs picked it up as well:

2015-08-20_zero

More specifically it’s something I saw on the Zero Lite after I marked a pretty significant bullish signal divergence, meaning price was meandering down while selling pressure was abating. Our modus operandi when confronted with such a divergence is to start looking for price confirmation in order to take out a contrarian entry – in this case a long position. Only problem was – price never budget. Participation continued to contract and then completely flatlined with the tape dropping lower all the way into the close.

As you can see VWAP was never threatened and not even touched beyond the first third of the session. That ladies and leeches we call a consolidated sell off session and that’s been pretty damn rare over the past few years. Just yesterday I mentioned that the bears have been unable to inflict any significant damage all year and this is perhaps the first session where I saw significant selling pressure and even a bit of panic selling toward the end.

2015-08-21_spoos_LT

Which brings me to the big picture, because for the first time in a long while I see long term support levels being threatened. As you can see the weekly on the left shows us only a few handles away from the 100-week SMA. But much more significantly – the monthly panel on the right is currently in breach of a monthly NLSL at 2023. Now it’s only August 21st and a lot can happen in the next 11 days. My inkling here would be that we’ll revere this at some point and stab back higher. However, what happens afterward in the coming month or two will show us whether or not the bears are ready to put themselves into the driver’s seat.

2015-08-21_NQ_LT

This is actually quite exciting as we are seeing acceleration plus we have finally abandoned the dreaded range we have been gyrating in over most of the year. On the NQ we are actually accumulating quite a bit more context across the board and this is where I see the most salient entry opportunities going forward. Note how we are touching the lower 100-day, a weekly Net-Line Sell Level, and a monthly NLSL at the very same time. Clearly the 4330 – 4340 range has significance and what happens here today and next week will be crucial.

2015-08-21_NQ_briefing

When it comes to taking entries however I suggest that you keep an eye on the hourly panel. If you are a Zero sub then that’s clearly going to be helpful as well. Yesterday was a prime example how you always always want to wait for price confirmation, especially during strong sell sessions. If you do not see any divergences and if the signal accompanies price then simply go with the flow. Don’t over think this – especially during price corrections. Many of you may be a bit rusty trading trending tape like this after a year of sideways churn. So let this serve you as a reminder that price is always king – do not every attempt to step under a falling sword.

More specifically this means you want to see the following in place:

  • A bullish or bearish signal divergence on the Zero Lite. Make sure the large spikes of the signal ranges above the 1.0 mark – it’s easy to be deceived by pseudo-divergences when the signal range has been tiny for days.
  • Price confirmation. Wait for price to start moving in your direction – do not try to guess when the tide will turn. The more forceful the sell off (or ramp) the more conservative you want to be here.
  • Look for additional context. You can use whatever your heart desired – I personally rely on VWAP on the E-Mini (as shown on the Zero panel). You can use Bollingers, MAs, stochastics, it doesn’t matter. On VWAP for instance I look for attempts to breach it – if there hasn’t been a touch for a long time and we’re far away (like yesterday) then that means selling pressure is strong. So in that context you want to wait for price to give you a clear indication – spike lows or spike highs for instance are something to look out for.

Speaking of spike highs/lows – there is one in place on the NQ right now but it’s still a bit premature for me to jump in here willy nilly. So I’ll wait a bit more and perhaps take out a small long position if I see the lows being respected. If we breach the NLBL at 4364 then I may add 1/2R and build my way up. Yes we are sitting on LT support here but that doesn’t mean we won’t see another stab lower which may be bought back Monday. This should give you a general idea of how I approach things and how I (and some of the senior subs here) are playing the swings.

Finally, do not attempt to use LT charts for grabbing long positions here – you will be smashed to pieces. I hope I don’t have to explain this in further detail but let’s just say that too many retail rats utilize LT charts for ST trading decisions. It’s like taking the bicycle to the toilet – a bit overkill and you bound to bump into walls.

Quite a few setups today – please step into my lair:


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Cheers,

Heavy Metal Friday

The Eurogroup meeting is starting in a few minutes and I hope that it won’t blow too many of my setups out of the water. I’m already seeing a lot of talk of why Draghi may jawbone the Euro down, which is why I’m glad that I made several runs to the ATM over the past few days (meaning a short squeeze may be coming).

2015-08-14_gold_briefing

Anyway it looks like it’s going to be a heavy metal Friday folks! Gold is back down for a bit of mean reversion and I’m liking it long here.

2015-08-14_silver_briefing

Similarly silver may be a long here – I’m taking out a teeny weeny position with a stop below 15.250.

2015-08-14_EURUSD_briefing

So yes, the Euro may drop lower today but in general I think the Forex specs are trying to call Draghi’s bluff. I am short a small position but expect to be long here at the 100-hour SMA or 1.118 – whatever touches first.

But we’re just getting warmed up. I’ve dug up the motherlode on the Forex side this morning – and I got futures goodies as well. Please meet me in the lair for more:


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Having discovered Days Of Jupiter just two days ago I’ve become absolutely nuts about these guys. Don’t remember being so excited about a band in a very long time. If you feel similarly then help pass on the word – let’s promote those hard rocking Swedes!

Cheers,

Bonds Bonds Bonds!

Excellent bond setups are on the roster today and I’m posting this early so that you guys have a chance to get a seat on the bus. Equities are also in a pretty juicy formation so I guess it’s going to be a busy morning:

2015-08-04_spoos_briefing

The spoos are looking tired as heck which is why I’m currently long with a stop below the recent spike low. IF we bust through that one then I think we’re going all the way to the lower daily BB. Also note that the hourly BBs are tightening and most likely we are going to see even more volatility here soon. Heck… hell of a summer!

2015-08-04_NQ_briefing

The NQ painting the same pattern – also long here and I have split my 1R exposure between both. Same implications – below 4540 we are in bear territory. Gravity could kick in quickly here – be prepared.

2015-08-04_corn_briefing

Corn – awesome setup as those hourly BBs are squeezed to the max. BIG move coming. Which way I don’t know but I’m currently long until I’m not, which will be below 364.6.

2015-08-04_ZF_briefing

Okay I promised bonds and El Topo delivers. Five year bond futures are challenging old daily resistance and I’m long here with a stop below a recent daily NLBL. Very few people are going to be long here after the recent push higher, which is why I like it even more.

However I’m keeping my favorite bond setup (and a LOT more) for my intrepid subs:


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

A lot of juicy symbols today. One may even say that we have a plethora of setups!

Cheers,




    Zero Indicator


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