Sitting This One Out

My apologies to Scott in advance but this is one of the rare times when our respective outlook differs. First up we are not at a crucial inflection point – the 2k level is simply an opportunity to shake out weak hands. If we dropped from here the downside potential would be rather limited as I pointed out yesterday. So there is no reason to get all all excited here – wake me up if we drop through the 100-day SMA perhaps.

2014-09-09_spoos_update

It all started out with a little fun after a tickle of the 2k mark but due to equilibrium on the buy/sell side it has now turned into yet another limbo zone. Nothing really has changed as of right now – in essence you want to be:

  • Long nar 1990.
  • Short near 2010.
  • Long above 2011.
  • Short below 1989.

In all four scenarios your stop would be no more than a handle or two away. Although this seems rather tight it has the highest odds in the current market phase. Any reversals back inside ‘ye ole’ chop zone’ invariably draws us back toward the magic 2k mark. Today’s proposed entry would already have us back inside as we just touched 2k again (and then we dropped again…)

2014-09-09_zero

If you’re watching the Zero right now the situation couldn’t be any clearer. I keep seeing statements/complaints about this being difficult tape and I completely disagree. It’s S.H.I.T. – absolutely – but it’s not hard to read at all. Today’s divergence on the Zero Lite should have gotten you out of any short positions you may have taken on.

In a nutshell: The downside potential here simply does not outweigh the whipsaw risk. EVEN IF we close below today’s lows today or below 1990 I would personally sit out any downside correction. Trading against the trend here is not worth the hassle. FYI – I’m posting this at 2:33pm EDT as the spoos are back at 1991 – which now has me long with a stop at 1989.

2014-09-09_EURCAD_update

Update on our EUR/CAD campaign – hey, it’s actually getting its groove on. Better to be lucky than good I guess. I’m not going to touch this one – as the old saying goes – if it ain’t broken don’t fix it. Next stop is either my ISL or I’m moving it up to 1R.

2014-09-09_ZN_update

Update also on the bond campaign – I got stopped out and immediately flipped for a short position. My stop is now above 124’3 which ought to suffice to weather out an obligatory LKGB move.

I have some very nice setups waiting below the fold – please meet me in the lair:


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Have fun but keep it frosty. FYI – I would love to see a few charts in the comment section.

Cheers,

Fun With Forex

Equities are doing their thing and I’ve been entertaining myself otherwise. This morning I proposed two speculative entries, one of which may actually turn into something interesting. Let’s take a look:

2014-09-08_EURCAD

The symbols were EUR/USD and EUR/CAD – the former dropped lower (much to my joy – see the DX) and the latter is climbing higher. Now this may just be a one day affair but given the formations on the daily and weekly (2nd and 3rd panel) we could be on to something. Which is why I’m converting this into a daily campaign now.

2014-09-08_USDZAR_setup

USD/ZAR – I had my eye on this sucker hoping it would push back into that 10.8 zone – wish granted! I’m now short with a stop above 10.84. No long play if I’m stopped out – that 25-week BB is too close for comfort.

Only one setup for the subs tonight BUT it’s a super juicy one – not to be missed! Please step into my lair:


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Cheers,

This Could Drag Out

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.

2014-09-08_spoos_hourly

I looked at the zoomed out hourly E-Mini this morning and it looks like we may get stuck up here for a while. Quite a bit of sideways volatility as discussed last week and clearly the 2k mark is now being established. Whether or not we correct here is beside the point – but we are plotting a ton of context here which will either act as resistance or support later. Judging by recent history it’ll most likely be support…

2014-09-08_spoos_briefing

Last time we blasted right through the prior sideways range as if it didn’t existed. But rest assured that it would be observed on a drop lower – so if we descent my eye would be on the 1980 range for support. Which kind of is the rub here, isn’t it? If you just look at the pat month or so it looks like there’s plenty of room for correction. But then consider the previous 1980 churn zone, the 25-day SMA at 1970, the 100-day SMA at 1940. All I can say is – good luck to the bears – they need it…

Bottom line: I would love to see a drop lower here for obvious reasons – but as it stands we may spend much of the week in here. Well, I hope I’m dead wrong on this one.

2014-09-08_ZN_briefing

The 10-year is looking like a bounce candidate but frankly it’s a speculative entry at best. I do like the configuration on the daily – if we drop lower. Right now I’ll see if that NLSL is going to hold for an hour – if it does I’m long 1/4R with a stop below 125’040 – tiny risk. May pay off on the off chance that it runs higher.

Two more ST setups below the fold for my intrepid subs:


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2014-09-08_EURUSD_briefing

 

They are both actually based on the same idea, so if you take them both split your R between them. That said - both are pretty speculative and I strongly recommend you don’t risk more than 1R combined. The EUR has been sold into oblivion and it’s trying to muster up some mojo for an obligatory bounce. Frankly I hope it’ll go to hell in a hand-basked (expat living in Spain) but just in case I’m going to take out a little long position here with a stop below the lower 25-hour BB.

2014-09-08_EURCAD_briefing

 

Very same idea on the EUR/CAD – and frankly I think the odds are low. But that means IF (and only IF) this play pans out it’ll probably correct back to the 100-hour SMA. So a 4x pay off for a small risk – worth a shot.

If you’re looking for a more respectable setup – something know sharp looking chart preferably wearing wearing a tailored suit and an Armani tie… well, let’s wait a day and see if we get more lucky tomorrow ;-)

[/am4show

Cheers,




    Zero Indicator


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