New Inflection Point

Apologies for the sporadic posts recently but I have been bogged down with various technical and administrative issues in recent days which command way too much of my attention. Suffice to say I’m running low on patience, anti-depressants, and duct tape.


However the tape waits for no man (or woman) and it’s time for us to pay attention again. If you are still long then I suggest you do nothing and put your stop below 1966.25, which in my mind is our bullish/bearish inflection point. If we drop below that then we most likely do a retest of the 100-hour SMA which has ascended to ES 1930. Whether or not we’d be long there depends on the velocity of the tape and what the level of participation we’ll see on the Zero.


Gold looks like it’s ripe for a play. The idea here is to wait for the current ST ramp to run out of energy and produce a spike high (i.e. new high followed by a candle with a lower high), then grab some short positions and put your stop above the spike high. This play has good odds until around 1160 – higher than that and we may start a massive short squeeze. So watch the tape and don’t get married to either the short or long side.

A few more symbols below the fold:

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A few wild gyrations are guaranteed around 1:00pm today when Super Mario is scheduled to feed the market a new dose of hopium. I really need him to tongue lash the EUR back into submission. That new base it’s building near 1.10 has been a major thorn in the Mole’s backside. Which part of ‘I want the Euro on par’ don’t they understand over at the ECB? How is Northern Europe supposed to wine and dine millions of economic migrants with an overvalued currency? Get with the program Mario and turn those printing machines back on!



FOMC Wednesday

Rejoice ladies and leeches – it’s that time of the month – FOMC Wednesday is upon us again. Which is our collective cue to hunker down and wait for the obligatory wave of volatility to wash over us. I swear, every time I see that one on tomorrow’s event roster my eyes glaze over.


So let’s cut through the crap, shall we? I’ll be happy to tell you in advance what’s going to happen. Yellen is going to deliver her usual litany of reasons for not raising interest rates (namely a shitty economy based on cooked books, fudged numbers, and of course low employment participation) whilst continuing to dangle the magic hike carrot in the ‘not so distant future’ – but just out of reach enough to keep everyone guessing. The usual suspects paid to interpret the tea leafs are going to make sure to dissect every single word carefully and we may see a few wild swings across forex and equities (although those have been a lot more mild lately) while that’s going on. There you go – now you can move on with your day! :-)

Not that it really matters as I don’t see much on the radar today I would touch with a ten foot pole. Nasty tape lately and my patience is wearing pretty damn thin. I’m sure you can empathize, unless you were on vacation in which case congrats you bastard – you didn’t miss a damn thing.


The one exception to all the market misery has been the one symbol I posted for the subs the other day. Sugar really sweetened my day as it finally got my memo and jumped higher during yesterday’s session. It has come down a bit since then but this is definitely a good start. It took me two attempts to get in there and I’m moving my stop a bit above break/even near the 100-hour SMA. This one could turn into a runner but and under normal conditions I would give it an 80% chance to advance higher. But these are not ‘normal conditions’ are they – which is why I have reduced my position sizing to 0.5R max per uncorrelated symbol.

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.

See you guys later this afternoon after the Yellinator.


Short Term Updates

I’m not really hot on any new positions this morning but I did close out a few of yesterday’s short term campaigns. Although I was able to snag two good ones there’s one that played me for a sucker:


GBP/NZD – I dug deep and grabbed a few longs after seeing selling exhausting. It was the right move but the bastard wound stopping me out by a mere two pips before it took of like gangbusters. Just to show you that this happens to everyone – nobody gets a free pass from Ms. Market.


Fortunately I had the foresight to also grab a few longs on the AUD/NZD. Sweet move here as well and I just took profits.


My EUR/USD campaign has come to an end as well. As much as I would love to see this one drop lower for a repeat performance the odds of this transpiring are rather low.


There were some questions regarding that subtle divergence on the Zero Lite (right panel) yesterday and earlier this morning. First up, it’s pretty normal to see a bit of a taper at the end of an extended sell off session. That doesn’t always mean that we’ll see an instant bounce. Perhaps if the signal would have started touching the Zero mark (in blue) a bit in the last hour. In that case I may have been tempted to grab a few lottery long tickets.


Now you may look at the overnight bounce and tell yourself that the Zero called it. I would disagree there – the price action almost 11 hours ago has little to do with what we ensued after the closing bell. Correlation does not equal causation. Thus I believe holding off on getting long last night was the right decision. If you stayed up late and kept watching the price action of course then you may have had opportunities as the spoos started to test a stack of Net-Line Sell Levels.

Alright, I’ll keep parsing around and if I see anything of value will  post it here.

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