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.


Furious And Furious Friday

We got movement people! And obviously I’m not talking about equities where we’re still spasmodically bouncing around in the same six month trading range. Booooring! Unless of course you are the evil lair’s official Swing Slayer and that coveted title is already taken by Skynard. You will have to defeat him first and then send me one of his digits to assume his position. It also helps if you either have at least one dragon or an army of White Walkers at your disposal. Either that or just send me money – I am surprisingly corruptible.


Okay, let’s get the tedious charts out of the way first. Equities – I’m risking a tiny long position if it touches 2095 with a stop below 2090.


Alright so I was talking about movement, remember? Plenty of that across the softs in recent days (i.e. corn, soy, wheat, etc.) – you guys really need to get yourself some futures accounts. Speaking of which, do you still remember the soybean diet I pimped the other day? Soybean oil has advanced beautifully and I’m now putting my stop below a recent spike low. I think that one has potential to go all the way.


On the actual soybeans contract it’s time to head for the hills after a beautiful stab higher. Sure it could push even further but my target has been hit and that’s that. I’ll keep an eye on it however for new entry opportunities – preferably after a little shake out.


GBPCAD – fascinating formation on the daily – rarely seen anything like that on the forex side. I’m happy to play the swings here just for fun but I reckon that it’ll be ready to pick a direction early next week. Be careful usually you’ll see a fake breach first – if you are really good at this game then you can try to play the fake breach with an inverse position. Paging Skynard the Swing Slayer!

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. If there’s anything interesting to share (and if I see you guys actually showing up – I know it’s summer… yuk) then I’ll see you guys later this afternoon.


Forex Update

While the S&P E-Mini futures have devolved into one massive sideways mess it seems that the NQ at least gives us an established range. So going forward I may use the NQ as a general guide whilst taking entries on the spoos.


Of course as soon as the respective ranges become too obvious it’s probably time to abandon them [in the context of taking contrarian trades]. But at least we have a contracting wedge delineating clear inflection points.


EUR/GBP – one of this morning’s freebies – is enjoying a splendid run and I’ve now moved my stop to the break/even point. Suffice to say that this was a bit of a lottery ticket as we really didn’t have three clear historical on that diagonal below (yesterday’s touch was #3). But thus far it’s working out well – not much to do here for now.


EUR/CAD – this one I kept for the subs as well and we managed to get in a bit late but thus far it’s paying off. Can someone tell me what’s so special about the 1.376 mark? Well, if you look closely then you may make out an inverted H&S configuration. Although those are only valuable in hindsight (meaning about now) a defended neckline does often produce a jump higher. Putting my stop at break/even and am burning some incense to appease Ms. Market.


AUD/CAD – also posted this morning for the subs. The general idea here is that we were painting some sideways floor pattern. What we need to see now is what happens at the upper hourly Bollinger. If it can stick nearby and then swing it higher we may just have a runner on our hands. Again, stop at break/even – not touching it until I see how price reacts to its first hurdle. Note also the 25-day BB which lines up quite nicely.

Words To The Wise

I’m going to poke around a bit more but have doubts that I will come across much of value. Over the past six months the tape has devolved in one big circle jerk across the board. Picking your victims requires quite a bit finesse and I have recently overstayed my welcome a few times after snagging rather fortuitous entries.  Definitely not the type of trending conditions we’ve enjoyed over the past few years.

The Forex side is a still bit better(and more diverse), but as you can see from the charts above even here we are seeing quite a bit of congestion. How long these conditions will prevail is anyone’s guess. My personal inkling is that we remain stuck in a holding loop until later this fall when the Fed will disclose whether or not it is ready to start hiking this year or if they’ll push it until next year. You know my thoughts on that subject already – I have grave doubts that we will see any meaningful interest rate hikes before the end of this decade. So perhaps we should start getting used to more congested tape like this. Fortunately the new strategy I’m working on (Scalpius) loves conditions like these, so although it would suck from a blogging and discretionary trading perspective it would work well for those trading bots.

The future is now – so don’t bring a knife to a raygun fight. If you are interested in becoming a Zero subscriber then don’t waste time and sign up here. A Zero subscription comes with full access to all Gold posts, so you actually get double the bang for your buck.


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