Who’s The Sucker?

The ongoing advance in equities continues unabated and I would strongly caution you against taking out short positions until the tape delivers us evidence pointing toward a reversal. Statistics mean exactly jack during low participation short squeeze periods, which is a lesson the Zero has taught us many times over the past few years.

2015-07-20_zero

Just compare the participation on the way down to the tiny signal range we’ve seen over the past few sessions. It is quite normal to see larger signal swings once gravity sets in, but this lack of participation on the rebound is a bit suspect. And in my book ‘suspect’ is not a license for taking out contrarian trades – quite on the… well – contrary. Some of you old timers may remember Whispering Saul, a trading legend from a different time who’s among a handful of candidates credited for an old aphorism which should be heeded especially during earning season: “If you enter a poker game and you don’t see a sucker, get up and leave – you’re it.”

2015-07-20_spoos_briefing

Following that advice I remain extremely skeptical about the equities side – in both directions. The daily panel is losing a bit of steam here and we have the S&P and Dow futures lagging the NQ. Still, until I see signs of real price weakness I won’t be touching this one with a ten foot pole.

2015-07-20_spoos_briefing_2

And the best place to look for such signs would be the hourly panel. However thus far it’s trailing its 25-hour SMA like a boss. This could easily continue higher for quite a while courtesy of over eager retail suckers with grandiose allusions of an ‘overdue’ reversal. Not to pimp my own ware but I think the Zero will be instrumental in offering us early clues, so I’ll be monitoring it carefully.

2015-07-20_GBPUSD_briefing_freebie

Cable is looking like a decent long here although that diagonal I painted is falling. So I’ll only deploy 1/3R here and would be prepared to flip for a short position on stop out.

A few more goodies for the subs below the fold.


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Now have fun but keep it frosty.

Cheers,

Time To Bitch Slap Old Bucky

The Fed is pretty much running out of options at this point. Their current modus operandi is to continue pretending that they want to raise rates but without real intentions of doing it anytime soon. Every month we are being served another paltry excuse as to why they’re still hesitant or that they’ll assess their timing based on the economic data. Perhaps next time it’s the humidity or waiting for the moon’s phase to line up properly.

Which means that among the few tools remaining in their arsenal to to keep equities afloat is to stomp on the Dollar once it approaches escape velocity. And given the Greek drama the timing couldn’t be any better to stick it to those dreaded Dollar bulls. And that’s going to be our theme of the day. Not because I say so but because quite a few USD related Forex symbols have moved into sync over the past few hours.

2015-07-09_EURUSD_briefing

For starters I’m grabbing a long here on the EUR/USD with a stop below the recent spike low. If the 100-hour can’t be held then we’re going to see quite a bit more sideways churn or perhaps even a revisit of the recent lows.

2015-07-09_AUDUSD_briefing

AUD/USD is looking pretty juicy here as well and I’m long with a stop below its recent spike low. Also nice to see the daily far outside the 100-day BB. Now it’s still early days here but if this thing bounces it’s high time – if it doesn’t manage a reversal here it may fall off the plate and turn into a trend trade to the short side. So short positions on a stop out may be possible here.

2015-07-09_spoos_briefing

The E-Mini isn’t among my favorite charts right now but if I don’t talk about it you guys are most likely to ride me out of the lair on a rail. So here you go – a possible long setup on the spoos if it drops to 2050. May not do it though so don’t chase it.

More goodies below the fold 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!

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

Cheers,

My New Soy Based Diet

I switched to a soybean based diet this morning when I posted not one but two pertinent setups. The soybean oil futures for you lowly leeches and the actual soybean futures for my subs – of course the latter was my all time favorite and it’s been rocking and rolling since my entry.

2015-06-22_ZL_update

The former is looking good though and I’ve now moved my stop to break/even now. We initially pushed up nicely but that daily NLBL at 33.3 had to spoil the party. Clearly this is where we should expect resistance going forward.

2015-06-22_soybeans_update

And here’s the actual soybeans contract – brilliant entry and thus far our nefarious plan is proceeding like clockwork. Evil is as evil does…. anyway, I’m moved my stop to break/even here as well. Nothing but air above and with a bit of luck and scotch tape we may just take the express elevator to the 1k mark :-)

2015-06-22_EURGBP_setup

EUR/GBP is looking like a nice long but DarthMole tells me that volatility is just about to run out of juice here. So I suggest you wait a few hours and then look for a long entry near the 100-hour SMA and that stack of Net-Lines.

Of course there’s more – I like to spoil my subs. And there’s a EUR pair I like even better today. Please meet me in the lair:


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.

Scalpius Update

On a sidenote – I was chatting with Mugabe in the comment section about Scalpius’ win/loss rate when suddenly something occurred to me. The system was build on top of CI legacy code and that one was taking break/even two pips behind the actual entry point. Which means that you’d count it as a small loss and given a lot of opportunity those pips may just add up.

EURUSD_A

So I changed that to one pip in front of the break/even spot and that completely changed everything. Here’s the original ruleset with the new break/even spot running against the EUR/USD. I call it Scalpius A. The P&L is almost identical but look at the win/loss rate! We went from 1:2.2 to 1:1.09. That is a system I would happily trade with 1% R sizes.

USDJPY_A

Here’s Scalpius A against the USD/JPY. 180R with the exactly same win/loss rate – that’s uncanny.

EURUSD_AB

Since this morning I developed a slightly enhanced ruleset which I call Scalpius AB. That one is a bit busier and as you can see the EUR/USD is now showing a much more subtle drawdown period. However the W/L rate and the expectancy suffered a little. I think I would stick with system A on this one.

USDJPY_AB

Here’s the same Scalpius AB ruleset on the USD/JPY – my jaw dropped when I saw this one. Again we have a win/loss ratio of 1:1.09. But we would have banked 280R in three years. The SQN number is bullpucky – I need the formula for SQN100 – anyone?

I’ll keep plugging on this – extremely excited about it as you can imagine.

Cheers,




    Zero Indicator


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