Long Term Update

It’s been a while and today seems like a good day to catch up with our long term charts. In general it seems like we have touched major lows in various key markets – most importantly on the Euro and crude front. The former much to my chagrin of course – how much I have enjoyed the favorable exchange rate and I’m not looking forward to seeing that change. Alright, let’s cover some major symbols, starting with equities of course:

2015-02-19_spoos_update

The long term panels on the S&P futures look in pretty good shape at this point, however it seems that we remain pinned below our weekly NLBL at ES 2088.75. It would be preferable to overcome this one by tomorrow as it would issue a weekly buy, thus almost guaranteeing new highs and a final departure from a two month trading range spanning over 100 handles.

2015-02-19_SPX_PNF

The SPX point and figure however shows a lot of positive evidence – in particular I like that support cluster near 1990 which in the future should provide some very solid support during any attempts to drag equities lower. On the long term chart we already have strong context courtesy of the 25-week SMA which has been attacked several times in the past months but managed to remain intact. However I must point out that this is the first horizontal defense line in a long time – which means the trend is weakening and most likely in its late stages.

In summary the bulls remain large and in charge here and if you’re holding long term then there is no reason to second guess the advance, despite all the bearish musings across the financial media and blogosphere. Yes, the bulls were in big trouble a few weeks ago but managed to throw a last minute Hail Mary. So far it’s working and until we see signs of exhaustion again the bear goes back into hibernation. He had his chance and he blew it.

2015-02-19_gold_LT

Gold looked like it was ready for take off and then suddenly deflated like a French soufflé. Quite frankly the gold bugs are in big trouble here and if we breach through that 100-week SMA and below the NLSL at 1130 there’s no telling how low it’ll go.

2015-02-19_gold_PNF

The P&F totally agrees it seems as the bullish PO is still a possibility but signals a high pole reversal warning which is about to turn into a sell signal. The gold bugs are on notice here and perhaps in a few days we’ll have a chance to take out a few lottery tickets to the long side. As I said – below 1130 we may just fall off the plate. Until that happens the long side is worth a shot as I expect 1130 to be defended fiercely.

More LT musings below the fold – please join me in the lair:


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Cheers,

The Last Bear Standing Is A Bull

The annoying thing about late stage bull markets and in particular the formation of long term tops is that they take forever to play out. Navigating increasingly volatile swings accompanying the final throws of a dying bull cycle takes considerable amounts of patience, discipline, as well as skill. Like Bob The Horse reminded us the other day: Bear markets go out in a bang and bull markets go out in a whimper.

Now the dirty little secret about early stage bear markets is that the last bear standing is usually a bull. Yes, you read that right. Traditionally it’s not weak handed bears who take down a bull market, it’s simply a lack of buyers. Guess what – all those snarling bears who were printing some mighty coin in 2008 are long gone, wiped out during their persistent attempts to call a top when there was nothing but green candles ahead. I myself have seen their (virtual) faces disappear right here – one by one they simply vanished. The few who survived the ravages of one of the most significant bull markets in history relented and changed their approach just in time before their accounts had melted away like late winter snow in the glows of a spring sun.

Arguably this has been one of the most hated stock market advances in history, rife with controversy, bail outs, and market manipulations. But let me assure you that in retrospect – many years from now – you all will miss it. Because it was just too sweet and too easy while it lasted. Your children and grandchildren will look at those monthly charts and ask you how in the world you managed to fail banking a fortune in five years of such bull market extravaganza.

And I’m not talking about fairness – you all know how I feel about QE and Fed/ECB interventions. But from a trading perspective – boy – it was pure manna from heaven and it won’t ever come back – not in our lifetime at least. What awaits ahead won’t be as directional and it won’t be as easy. If you thought trading was difficult in the past five years then you ain’t seen nothing yet.

2015-01-29_spoos_briefing

Now as you may recall I managed to squeeze in an ES short at 2040 yesterday morning and I consider myself extremely lucky as it went straight down from there. Now we’re basically hanging by a thread here and I’m not going to claim that we won’t see yet another FU rip higher, killing a boat load of shorts in the process. But that’s part of our existence as traders – not knowing. You don’t have a crystal ball and you basically just have to pick your battles as they present themselves. The war never ends and the goal is to simply keep winning more than you are losing. Choosing to be a trader is a bit like being born into European royalty in the medieval ages – there’s always a war on and participation is mandatory. And if you win enough you get to pillage ;-)

Anyway, if you take out shorts here then put your stop above ES 2040. Yes, it’s a huge range but that doesn’t matter – if this thing really breaks you’ll need that range anyway not to get shaken out. And if it bounces here and breaches 2040 then the bears are dead in the water (again) and we are painting new highs. Alea iacta est.

2015-01-29_EURUSD_briefign

EURUSD – I’m long here and I hate it. Stop below 1.1251, very much hope it’ll get touched but as you know I’m a lowly expat who earns in Dollars.

2015-01-29_DX_briefing

The Dollar index however is looking pretty solid here and I’m long with a  stop below 94.6.

More short term goodies below the fold…


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

Cheers,

My New Best Friend

My apologies for being relatively quiet on such an exciting day. Unfortunately there was a death in my wife’s family and I had to be there to offer some moral support. Which means I haven’t been trading (much – the systems are always on) and earlier this morning there was no reason to grab positions ahead of Draghi’s announcement.

2015-01-22_EURUSD

So let’s talk about the big news first – most likely I’m not telling you anything you don’t already know but in a nutshell: Despite strong dissent by both German members of the ECB’s board the decision is to issue €1.1 Trillion in QE at €60 Billion per month. That’s a mighty chunk of change aimed at countering the threat of a supposed deflationary spiral. Obviously much of that had already been priced in but the expectation had been around €50 Billion per month but what’s another €10 Billion among friends, right?

Accordingly the EUR/USD is now at 1.13 and change and there’s no telling when this free-fall will end.

euro_toilet_paper

Clearly Draghi didn’t win any popularity contests over in the old Vaterland today, but he’s now officially my new best friend. Looks like I’m going to save a lot of money on toilet paper and may be able to move operations into my favorite Valencian palacio. Because unless the U.S. Fed is interceding somehow in the near term future we may see the Euro on par with the Dollar at some point this year. How about we organize an Evil Speculator Euro-Par-ty over here in Spain when it happens?

2015-01-22_spoos_update

On the equities side we’ve been getting exactly what I suggested yesterday – more upside and we are now approaching the point of no return for the bears. Given my post I had a very tough time taking an NQ long position via Thor last night – the short campaign had previously ended at break even. It’s interesting how I was emotionally uncomfortable about placing this trade. Scott and I were on the phone and the consensus was ‘yes, we absolutely have to take this trade’ – especially since we were both pretty bearish. Practice what you preach, so to say.

2015-01-22_zero

Bottom Line: Nothing has changed – 1600 is where the bears fumble the ball again and we most likely are going to see new highs. Which however wouldn’t mean that this bull market picks up where it left off a few months ago. I maintain that we are in the late stages here and I also don’t like the participation I’m seeing on the Zero. This may turn any day and I suggest that you slim down any significant equity exposure (i.e. large stock portfolios, stock based funds, ETF/ETNs, etc.).

2015-01-22_gold_update

Our gold campaign is looking very good now as we are only a bagel throw away from the 100-week SMA at 1310. Not shown on the panel above is the monthly NLBL at 1290 which we’ve already crossed. A close above this mark on January 31st would be a monthly buy signal and excellent news for anyone already long (i.e. this lowly Mole). I’ve told you guys that I intend to hold this one into 1500, that would be one trade for posterity given my 1212 entry.

That’s all for today – see you guys tomorrow.

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,




    Zero Indicator


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