Chop Chop Til You Drop

I’ve had a mini epiphany today just browsing through my universe of charts across bonds, equities, the futures, and even forex. In plain simple words – we are in the midst of a high volatility sideways market period right now. And that means that directional campaigns simply won’t work. You may get away with grabbing a good entry but just as you’re ready to reap the benefits the tape turns on a dime and stops you out. This has happened across several campaigns over the past two weeks but the incident rate is increasing. Which means it’s time to adjust our trading to the tape. In this particular case it means keeping entries to a bare minimum – personally I get extremely picky and reduce position sizing to a minimum during these types of market periods.

2015-04-20_spoos_update

So let’s look at some evidence supporting my outlandish claims. You guys have seen this chart on several occasions and I’m not going to explain it again. Clearly we are in a sideways range. A few days ago it looked like we may defy gravity and take off but it wasn’t to be. At this point the only context worth its salt is the 25-day SMA and even that one is way too precarious to afford us swing entries. I am staying the heck out of this one for now. If we push to the extremes I may take an inverse entry with a small position size. But I’m really not obsessed with having to trade equities frankly – happy to let this thing play out and revisit in a few weeks.

2015-04-20_GBPUSD_update

Cable – part of the story for sure – just look at the daily panel on the right. That’s one nasty trading range with a lot of long wicks. Meaning stop runs galore and only recently have we seen a bit more directional tape.

2015-04-20_EURUSD_update

The EUR/USD has gone nowhere fast int he past month. Thus far it seems like the 1.05 mark may wind up a long term low but the fat lady hasn’t sung here just yet. This is starting to resemble a real low however – the next few days should be interesting, but for now I’m not taking entires in the middle of the ongoing trading range.

2015-04-20_gold_update

Gold – just peeking at the ST panel is making me dizzy. The daily ain’t much better – once again we seem to be stuck in a sideways range below the 100-day SMA. However, the 25-day is now on the rise and if I see decent ST context in the morning I may be convinced to take a long position here.

2015-04-20_ZB_update

Bonds – just nasty – don’t even ask me when this thing is going to resolve. No interest in participating here.

2015-04-20_crude_update

Crude is the one exception which in the context of the ongoing LT campaign is extremely promising. We got really lucky here when taking our entry and I’m rather conservative with advancing my trailing stop.

2015-04-20_GBPJPY_update

Early morning setup update: GBP/JPY was one of the few charts that actually triggered and didn’t hit its stop shortly after. However I’m long inside a downside trend on the daily chart – my expectations here are extremely low and I’ve advanced my stop to the break/even point. It’s a small position anyway but alas.

No new entries for the day – time to hunker down and keep one’s powder dry.

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Cheers,

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.

2015-04-20_spoos_briefing

Index futures are still in shake out mode - as I told you last week it’s best to stay away for now and let this play out. Thus far my caution seems to have been appropriate – just look at this tape on the hourly and tell me if that’s something you really want to be trading. As a side note – for some reason the 2088/2089 mark produces a lot of context. It doesn’t line up with anything on my charts except that I drew this line when I entered long and then got stopped out right there again. And I remember mentioning this level on previous occasions, so for some reason it keeps coming up. Like this morning when we’re bumping against it after a run higher overnight.

2015-04-20_AUDCAD_briefing

We have nice AUD and CAD related entries today. Which is great but if you take them I suggest very small position sizing as we have pertinent event risk a few hours away. Anyway here’s the AUD/CAD and I am long with a stop below the recent spike low. I’m giving this a few hours to ride higher and produce some distance ahead of the BoC governor speech. If it just hangs around here I’ll probably pull it as I’d be sure to be whipsawed out during the event.

2015-04-20_events

Here’s what we’re facing today – set your clocks.

More setups below the fold:


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I mentioned in the sub only section that I’m taking very small position sizes here. Reason being is that we’re in clear shake out mode on both the forex and equities side. It’s a tough market to be active in and you need to be on top of your game, remain nimble, patient, and not get emotional. All those attributes are easier to fulfill when you don’t really care about pulling a loss – ergo take small positions and know your stops and targets before you enter a campaign.

Cheers,

Let’s Not Overthink This

Yes, in case you are wondering, we are seeing clear signs of distribution or accumulation. Which one exactly it is – well, we can’t be sure and my crystal ball is still in the shop. However that said, I don’t see anything disturbing on the momo front – at least not yet. So as usual I’ll have to go with price:

2015-04-09_spoos_update

Since we took this snapshot we’ve dipped down a little again and if you’re looking to grab long positions you may get a better entry near the 25-hour which currently sits near 2075.  On the short side it seems that the 100-hour should be our best guide at this point – it’s been tested and the 25-hour is also near. Anything between the 100-hour and 25 hour SMAs is limbo territory – feel free to grab positions but probably it’s best to use the extremes for inverse entries.

A drop below the 100-hour could drag us a bit lower but it doesn’t get serious until we breach the 100-day at 2057.5. I think from there the bears may have a real shot at dragging this beast lower. I’m sure all that sonds a bit confusing and frankly I can’t offer the perfect entry here either.

2015-04-09_spoos_daily_setup

Or can I? Of course you may simply play the daily setup which is a hammer (thus far) – be long above it and short below it. And in between you can play the swings at your heart’s content ;-)

2015-04-09_GBPCAD_update

GBP/CAD – taken to the woodshed, water boarded, and then disposed of – another great entry bites the dust. Bummer really but it was always experimental as the trend obviously remains to the downside.

2015-04-09_USDJPY_update

USD/JPY – here we are in much much better shape. I’m advancing my stop as indicated and am prepared to hold this sucker through a possible short squeeze. This in fact has been my approach in the past few years – get a seat early (i.e. via the hourly) in promising daily formations. This in fact is how I got into the NQ early as well.

A few setups below the fold for my ever 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.

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

Cheers,

2015-04-09_putin

(you have to be a sub to get this one)




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