Monday 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.

2015-05-11_spoos_briefing

Quiet morning – the best entry on the roster is via the E-Mini. We’re sitting right on edge of a wall that has been annoying the bulls since late February. I’m short right now but am eager to flip for a long position should we breach 2011.5. Whipsaw potential is high but it’s a good spot to get in the game. If you’re long from last week I suggest you take partial profits but hold a few lottery tickets for a run higher.

This absolutely is a day when you want to watch the Zero like a hawk. You have been briefed – don’t snooze on this one, guys!

2015-05-11_CHFJPY

CHF/JPY – I’m waiting for a touch of the lower 100-hour BB ~128.18. Long there with a stop below 127.7. Decent context on the daily panel as it’s near two Net-Line Sell Levels.


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Cheers,

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:

2015-05-01_spoos_briefing

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.).

2015-05-01_NQ_briefing

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.

2015-05-01_EURUSD_update

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.

2015-05-01_EURJPY_update

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.


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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.

Cheers,

Running Like A Hare

The tape across the board has been running like a hare and today’s session again did not offer us any reprieve from the relentless battering we’ve been through over the past few weeks. Up and down she goes although on the equities side it’s been more down than up and the fat lady hasn’t sung just yet.

2015-04-30_spoos_update

Clearly I’m going to be limping behind here as things are unfolding quite rapidly. When I took that snapshot it was looking like equities may have found some ground but I simply didn’t trust it and posted in the comment section that it’s probably best to let things play out. That seems to have been good advice as the spoos are heading even lower as I’m typing this. To your collective benefit Mole’s instincts have been honed by decades of hairy tape ;-)

2015-04-30_zero

The Zero is still showing us very little participation, once again indicative of a stop run by institutional traders. A lot of greedy retail rats are being burned here folks – consider yourself lucky you’re not one of them (I hope!).

2015-04-30_NQ_update

The NQ printing lower highs and lower lows – this is not looking good. The 25-day SMA only offering soft support and this thing could easily resolve toward the 100-day SMA near 4317 before it’s all over.

2015-04-30_VIX-VXO

On days like these it always pays to check breadth and momo charts. The VIX:VXO is showing me no divergence which is concerning.

2015-04-30_VXV-VIX

More long term the VXV:VIX is also pointing down. That’s bad medicine…

Alright, updated across the board in no particular order:

2015-04-30_EURUSD_update

The EUR/USD is now in earshot of my target and I’m taking everything but 25% of my position off the table. This campaign has done a great job of softening the impact of the shitty exchange rate I’ll probably be facing in the months ahead. Notice the weekly NLBL that has been sliced today.

2015-04-30_EURJPY_update

EUR/JPY – same idea here – I’m taking almost everything off the table, only keeping 25% of my original position. Again my target is near the 100-day SMA where I would normally expect some obligatory resistance. But given the velocity of this short squeeze things could easily overshoot.

2015-04-30_crude_update

Crude – I’m quite stunned by how well this one has kept up given all the drama in the remaining futures pits. As you may remember I snagged a rather early seat near the 50 mark and remain determined to ride this puppy higher. Over the past week or so there was a lot of talk about crude having hit a high and I’m glad I didn’t listen – as always! ;-)

2015-04-30_ZF_update

ZF is not a setup yet but I like the daily and weekly panels here. As soon as it gives me an excuse to be long I’ll let you know.

2015-04-30_ZN_update

Ditto on the 10-year futures but it’s a bit early to snag a position just yet. Let’s see how things play out Sunday night or on Monday.

Alright before I grab dinner a few juicy setups 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.

Cheers,




    Zero Indicator


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