The Big Squeeze

The gloves have officially come off and it’s outright war all across forex as GBP and EUR shorts are systematically being squeezed into oblivion. Very few saw this one coming it seems except for the Mole and his crew of lowly steel rats. Having secured early seats on a fleet of buses it’s all smiles down here at the lair – a rather welcome reward after weeks of pain and patiently waiting our turn in the bullpen. But that’s yesterday’s trades – we’ve got more work to do this morning – so let’s roll up our sleeves and get to it:


The E-Mini – I took an experimental long here as we’re retesting the 2088 mark. I have low expectations of this one working out but it’s a delicious entry and I’m taking it with 1/2R.


NZD/USD – picking over corpses here – that’s right, no mercy! That was one nasty drop and I’m long here with a stop below the previous lows. Again an experimental entry – if you follow me into the abyss don’t risk more than 1/2R.


Bonds – binary inflection point here. I’m currently long and so can you but I would wait for a drop toward 128’120. Below 128’040 the abyss awaits – see the context on the daily.

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


All In A Good Day’s Work

It’s all smiles down here in my sunny Mediterranean lair – account flashing bright green and I have converted several ST campaigns into daily ones (more on that below). Judging by the thundering silence none of you guys followed suit here yesterday afternoon which is extremely disappointing. Not to boast but my seven year track record suggests a pretty high success rate in flagging important inflection points.


The E-Mini once again turned on a dime right at the lower 100-hour BB, which was one of the support zones I pointed out this morning. Tough one to catch IMO unless of course…


…. you were a Zero subscriber – then you may have seen this one coming. Textbook signal divergence during today’s lows and although you may not have nailed the very bottom I have an inkling some of my Zero subs were able to slip in a few longs here ;-)


Alright, let’s catch up with the ongoing campaigns which I converted into daily ones as of now. NZD/USD now looking pretty solid and I’m leaving my stop at break/even for now. Giving this a lot of space to run.


EUR/JPY – also great entry there yesterday but we’re heading into daily resistance. My stop is already at break/even which may bite me in the ass if we get a LKGB retest.


EUR/USD – sorry to say that it’s looking good as well – there goes my cheap exchange rate I guess, bugger! Also facing resistance here on the daily soon.


AUD/USD – SOLID!!! I’m taking 50% off the table here as I expect a correction at the 25-week SMA, plus after banking 2R+ that’s more than in line with my system rules.


AUD/CAD – damn – this one literally exploded higher. I’ll be taking partial profits above 0.965 where the 100-day SMA awaits.


Wheat triggered on Thor.0 the other day, which is still in beta, and as this is turning into a textbook campaign I wanted to post it here as well. The whole idea behind Thor.0 is that it stays in the campaign as long as possible – we have a theoretical 20R target but don’t expect that one to ever be hit. In contract Thor exits at the 4R mark which is appropriate for that particular strategy. The main difference between those two is that Thor.0 triggers during strong trends as well as the onset of big run – success rate is 50/50 but once it gets going it can go on for weeks.


Corn was another Thor.0 entry and I think the original Thor would have taken 4R profits by now. As you can see the weekly is offering support here and this is where this campaign may fail. It has already taken 50% off the table at the 2R mark and now it’s basically a matter of whether or not this one turns into a runner. The BBs on the daily are about to start falling lower and if that happens there’s nothing but air below.


Crude update – yes, I’m still in that one. Many analysts are expecting this to be the highs for now but I’m not so sure. It’s been holding up pretty nicely and those 100-day SMA is starting to compress. I’m leaving my stop below that NLSL at 53.93 – let’s see if she decides to move against the common consensus, wouldn’t be the first time.


Bonds – a possible setup today. I’m actually waiting to be precariously long here today near 161 and if my stop nearby gets touched I’ll turn it into a short. Why? Well, look at the daily panel – could drop like a rock from here until about 154.

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You Snooze You Lose

Just last night before the close I encouraged you guys to start paying attention as we were pushing near important inflection points across the board. And not only that – I backed up my outlandish claims via a laundry list of juicy short term setups, offering cheap seats on very promising daily campaigns. So let’s see what happened overnight:


Starting off with the most insignificant sector right now – equities. Back to the woodshed it is unfortunately and this chart is now starting to resemble Dr. Zeus’ worst nightmare. Temporary backstops here are the lower 100-hour BB near 2090, the daily NLSL at 2087 and if that fails we may hold near the 25-hour SMA at 2080. I for one am not too eager to throw any coin into anything related to equities right now. But that may change as soon, so let’s not get complacent here either.


AUD/USD – it seems like the evil market goddess favored my nefarious plans as I got what I would call a perfect entry, just as planned. I am definitely making this a daily campaign – stop now at break/even.


AUD/CAD – got extremely lucky here as well. Not so much by my entry but that I escaped stop out by a tick or two. Also staying in this campaign but am taking partial profits here. – clearly there will be a bit of a shake out after such a push outside the hourly BBs.


EUR/CAD – so far so good and my stop is now at break/even. Nothing else to be done here right now.


EUR/USD – incredibly I also got my 1.086 entry here. Better to be lucky than good I guess… Much to my chagrin of course and right after I’m done typing this I’ll head to the ATM to pull out a bit more cash. Looks like this may turn into a runner and head to 1.13. I’m not liking it but this is a pretty good hedge.


EUR/JPY – good entry as well and we are in good shape.


NZD/USD – looking good here! Stop still at break/even.


Copper is the one laggard of the bunch and I got stopped out at break/even – big deal.

Words To The Wise

Over the past few years I have been experiencing this phenomenon over and over again. The tape is pushing sideways and people are banging their heads against the wall for weeks on end, against my usual advice to lay low and to keep one’s powder dry. The board is starting to resemble a ghost town with large tumble weeds rolling through the comment section. Everyone is worn out and nobody is paying attention as recency bias rules the general outlook. Of course this is exactly when you need to pull yourself together and start looking for early signs of a break out move. You may get it wrong once or twice but as the bus empties by the day the odds for a big move are increasing as BBs have contracted and the tape is coiled up like a snake.

And almost every single time only a small minority here snaps into action and does what needs to be done. As Ed Seykota once put it so aptly: “A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.”

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