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,

Tuesday 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.

2015-04-07_spoos_briefing

The spoos have held their ground overnight and if that hourly NLBL holds up until the open we may be primed for at least a ramp and camp session (the ramp having happened yesterday). Anyway, thus far it’s looking solid but at minimum we have to hold ES 2070 (the 25-day SMA)  moving forward. Failure to do so won’t squander the bullish potential here but we may remain trapped in a sideways formation. Not a great way to spend spring, especially after we already have remained range based for most of the year.

2015-04-07_USDJPY_update

Update on our USD/JPY campaign which is progressing quite nicely. I’m moving my stop to the 100-hour now as I’m converting it officially into a daily campaign. If it manages to breach the 25-day SMA it may have enough mojo for a rocket move higher.

Hello Major Tom – are you receiving??

2015-04-07_ZB_briefing

Bonds – looking good here and I’m attempting a small (1/2R) long with a stop below the recent spike low at 163.26.

2015-04-07_GBPUSD_briefing

GBP/USD – something grabbed my attention here this morning. It’s looking like it’s primed for a drop lower but IF (and only IF) it manages to bust above 1.491 I plan to take out a small (1/2R or less) long position.

More short term setups below the fold:


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Alright that should keep you guys busy. See you guys later this afternoon.

2015-04-07_wwa

Before I go I would like to present this year’s Wacky Weed Award to Ivan Krastins who just dropped by this morning and thus proved utter invincibility in the face of a category 5 typhoon or however they label their massive storms down under. Well done Ivan – we are glad you are well and hope you will bestow us with many more years of cryptic contributions ;-)

By the way – buy his book or something – he needs to rebuild is straw hut in Vanuatu and chase out the crabs. Or donate here to help rebuild the island.

Cheers,

Sons Of The Lair

So I’m officially a biker now. That’s right – the Mole has been issued a Californian M1 license and driving in SoCal will never be the same. Well until the 21st that is – that’s when I’m heading to sunny Mexico.  I can assure you that this was no easy feat given the time restrictions as I’m only spending a bit over nine days here in Los Angeles. As you know I’ve been riding a scooter back in Spain for the past few years and quite frankly it’s getting old. Unlike over here in the U.S. the Spaniards permit you to legally ride everything up to 125cc with a regular driver’s license.

But if you want to hop on the real stuff then you’re out of luck as passing a motorcycle license anywhere in Europe is a royal pain in the neck. We are talking red tape galore, weeks of driving lessons, and thousands of Euros in expense. I think in Germany they make you take 20 hours of driving instructions minimum, there’s a full day First Aid course, and that’s only to get you started. Which may make sense for the average 20 old hoodlum trying to impress his lady friends but a bit much to ask for someone who has been riding two wheels for years and has carried a driver’s license for over 25 years. Heck, I drive stick shift like a mini Schumacher – my accent is way better though.

SOA-logo

Of course over here in California things are a lot easier and more fun, so I didn’t want to miss this opportunity to finally get my proper M1 license and start riding in style. Which I then could easily convert into an international permit courtesy of the AAA. So I studied up via some iPad app until I knew all 250 possible questions by heart. Off to the DMV waiting in line for four hours (couldn’t get an appointment early enough), fortunately there’s plenty of eye candy up here at the Hollywood branch. Finally get to take the test and it turns out that there’s a new test now which has nothing to do with any the 250 questions I memorized. Plus those bastards make me do the written test for the car as well – and I didn’t study for that one! Oooops!

Well, I passed them both anyway. So yesterday I’m heading down to San Diego to take a three hour course with Brian at SoCal Super Moto. Awesome instructor - he apparently even taught some of the guys from the show Sons Of Anarchy (I was a big fan). Turns out he broke two of his ribs the day before while skateboarding – yeah, he’s a bit of a speed nut. But he showed up anyway and just sucked it up – big props to this guy and if any of you are considering to pass the M1 then head down to SD and learn from the best.

2015-03-17_bike

Anyway, this morning I get up at the ungodly hour of 6:30am PDT and head over to the San Diego Clairemont DMV. Brian apparently has an arrangement with those guys and he’s able to pass a whole group one by one in the morning. I’m there with five other guys and all of them are already accomplished riders. The Mole’s the only one who just learned to shift a motorcycle a day ago. Well, to make a long story short – I nailed it like a boss and I’m as happy as punch. Mission accomplished. I already have my eyes on some of those sweet custom Bünderbikes they make in Switzerland.

2015-03-17_zero

So let’s talk markets. Seems I didn’t really miss much there – sideways session suggesting indecision. Note the complete lack of participation after the little ramp higher. Follow up matters but given that we just held a critical inflection point at ES 2040 chalk me up as being a bit suspicious.

2015-03-17_spoos_update

But okay, I bite as we have a nice inside day offering a binary entry. The long side seems to be the easy one right now – once again the 100-day SMA has held and we have four touches which is going to bolster support down there. But no, it’s not impossible that this resolves to the downside – I’d give it a 20% chance. Which means I’ll take it if it breaches lower but only with 1/2R – adding the other 1/2 at 2040. On the long side we need a breach above today’s highs and our ISL will be the low or wherever you feel it’s clever.

2015-03-17_VXV_VIX

By the way – I wouldn’t even consider the short side if it wasn’t for this. The subs will remember this chart – it’s the VXV:VIX ratio which shows us premium deltas between 1-month and quarterly CME options. That little divergence is holding up, leaving the door a crack wide open. But not by much – again, I give the downside little credence as of right now.

2015-03-17_GBPJPY_setup

Otherwise it’s pretty slow on the setup side today – the only ones I like are GBP crosses. Here’s GBP/JPY which I like short with a stop above 179.75. A long above 180 (i.e. the 100-hour SMA) is an option but I think the downside has the momentum here right now.

2015-03-17_cable_setup

You can also play cable instead – triggers on the chart. Or if you like ‘em in pairs split your exposure between them and Bob’s your uncle.

That’s it – I’m going to relax a little now. Perhaps head out for some L.A. style shopping – the list is long and I only have a few more days to go until I head out to Mexico. 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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  3. recent misdeeds

    1. Sideways High Impulsive Tape
    2. Tuesday Morning Briefing
    3. Chop Chop Til You Drop
    4. Monday Morning Briefing
    5. Chasing The Market’s Tail
    6. Still In The Game
    7. Nothing Thursday
    8. Well I’ll Be Damned!
    9. Wednesday Morning Briefing
    10. Bait And Switch Tuesday