Kitchen Sink Monday

Folks, roll up your sleeves, grab your favorite morning beverage, and prepare to get busy. For whatever reason the market is throwing everything but the kitchen sink at us this morning. Let’s review the equities side first and then dive right in. Ready – set – go!

2014-10-27_spoos_overview

Things are looking good here – the last hurdle here remains to be the 100-day SMA and if it can be breached this week then I see little in the way of taking out that weekly NLBL on the right panel. If you’re wondering, yes I’m still holding those long positions.

2014-10-27_spoos_hourly

What I really like on the hourly panel is the 25-hour which is clearly being observed. There was an attempt to breach it but it failed right at the lower 25-hour BB. We are now starting to accumulate ST context below and that’s positive.

2014-10-27_EURGBP_briefing

Okay, on to the setups. EUR/GBP – I’m long here with a stop right below the diagonal (0.786). If stopped out I’m already set to be short with a stop above 0.788. Love this one.

2014-10-27_DX_briefing

The Dollar is approaching a convergence point between the 25-hour and 100-hour. I have to be long here until being stopped out at 85.5. Given the onslaught of excellent setups today I would not be short after that as I think there are better opportunities.

More below the fold – please meet me in the lair:


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Looks like this is going to be a fun week. Shake And Bake!!

Cheers,

Inflection Points

Equities are now beginning to accumulate sufficient context, allowing us to consider various inflection points where the odds either support continuation lower or a reversal toward the recent highs. Let’s review the daily context first:

In order to simplify it for you guys I’m hereby resurrecting an old tradition of mine – the Soylent line up. The volume profile chart show a pretty shallow volume hole near yesterday’s highs, just below ES 1940. The bounce didn’t have much meat in it but it may just have been a first foray into lost territory, perhaps leading to continuation either today or tomorrow.

Below us we of course have a bit of bearish wiggle room until about 1917, after which you can see a gradual drop off in the volume profile terminating in a textbook volume hole around 1900. That’s obviously a psychological line in the sand the bulls will want to hold. If it fails we’re going toward 1850ish – our current point and figure price objective on the P&F.

  • Soylent Green: At this point being long above 1940 is a pretty decent play if the GBP/JPY correlation shown below holds up. If breached a ride toward 1960 is in the cards and based on velocity/momentum/participation we’ll have to evaluate once/if we get there.
  • Soylent Orange: The highest odds right now are continuation lower toward 1900 unless we breach 1940. It does not have to be a black & white approach – watch the Zero indicator after the open for signs of increasing buying interest (or lack thereof). I think today is an excellent day to follow the Zero Lite for clues.
  • Soylent Red: Only applicable if we drop straight through 1900 without much of a bounce. If panic selling ensues a drop through that mark leads us toward 1850. The odds for that to happen are very slim right now. Recall what I showed you on the LT VIX chart on Friday.

The spoos to GBP/JPY correlation is pointing upward right now. That’s positive for the bulls and why I wouldn’t count the bulls out just yet. But equities need to follow higher now – the onus is once again on the bulls to draw the line here before major damage is incurred which may threaten the medium term and perhaps even the long term trend.

On the price side here’s a bit more detail. You can of course trade the E-Mini or the Spiders, or your favorite ETF, what have you. The 100-hour SMA is near our 1940 inflection point, so I think we have a pretty solid ST guide here.

I would however play the short side via the Russell futures – at least 50% of my exposure. After all it does make sense to short the weakest index and buy the strongest.

Which brings me to the NQ which still looks weak but should we see a reversal today then here are your long triggers and the stop. This may change as the day unfolds – so watch this chart as it may paint a nice diagonal higher under which you can place a stop.

Once again I found a ton of juicy ST setups this morning. Here’s gold which I want to buy on a push above that diagonal I painted on the chart. A short position is definitely possible here until that happens – in that case put your stop above 1295.

Quite a few more goodies are looming below – 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.

Anyone? Damn it, I don’t get no respect… (you have to be a sub to get the reference)

 

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.

Once again the bears absolutely blew it last week as the tape was lined up for an grizzly homecoming party which was rudely cancelled without further notice on Friday afternoon. If you look at the daily S&P cash you can see how perfect this configuration was – another five handles or so lower and we may have seen a significant stab to the downside. Just like Argentina last night the bears can add this one to a long and growing list of ignominious failures.

The spoos are currently scraping 1970 which puts us near 1976 on the cash should we hold the upper BB line here until the open. Obviously my remaining short positions met their maker at my break even point at 1968.5. This is pretty much what we expected and given the probability/payoff ratio at the entry I would take this trade every single time. The way it is I eeked out a humble 1/4R out of this campaign – nothing to write home about but I think it was nicely executed.

On the setup front it’s very quiet on the futures side this morning. I was able to dig up three Forex victims and I’ll throw one out to you leeches. The NZD/USD has been pushing sideways in a triangle like formation but it’s starting to run out of rope as the 100-hr and 25-hr SMAs are closing in. Thus far odds suggest that the 100-hour will hold and thus I’m risking an R to be long with a stop below the moving average.

More 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!

Please login or subscribe here to see the remainder of this post.

Today’s event schedule:

And here’s the spike controller for you Forex traders:

Cheers,




    Zero Indicator


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