The Quiet Before The Storm

Personally I believe that very little is going to transpire here before Monday morning. I’m sure you are aware that the Greek are holding a referendum on Sunday the 5th [good write up here] which is I expect will throw markets into a turmoil – no matter which way the pendulum swings. Expect a ton of volatility and most definitely expect stop runs galore right after the Sunday open (which is night time here in Europe and preliminary projections will be coming in).


All of that means I’m pretty much shutting down the liar starting tomorrow morning – and I won’t be taking on any new setups in the interim as we’re now heading into low participation territory. I’ve got two charts of note though:


First up bonds - here’s the 30-year futures contract. As you can see it keeps failing at the 25-day SMA and is now heading down for a revisit of the recent lows. The weekly panel on the right however toggled my interest – the 147 mark near the 100-week SMA has survived a few times but the Grexit vote this Sunday could be the catalyst that finally breaks that camel’s back. Nothing but air below – this could get ugly quickly.

Honestly I completely hate what’s going on right now. I would love to be long here but the continuous Greek roller coaster is producing so much uncertainty that taking directional positions has been extremely difficult as of late. And being short here today ahead of Sunday is simply not an option as we may find ourselves facing the gap from hell Sunday night.


My long positions on the E-Mini survived that little dip lower yesterday by a mere tick. Sometimes you get lucky and sometimes they’ll get ya. Not that it’ll do my much good though as today was supposed to be the session which drives this puppy higher. I have already closed them out for a meager 1R profit. As I quipped a few weeks ago – I don’t remember working so hard for so little coin for quite some time now.

As you can see we’ve produced an inverse island down here and unless that NLBL at 2071 gives before the close we’ll most likely remain stuck down here until Sunday night. And that means very little buffer to the downside – extremely serious conditions. But frankly speaking it’s all academic as the odds for a huge move down or up are significant. Thus I caution all of you from holding any equity positions over the weekend.

Words To The Wise

With all the gapping action and general uncertainty I wouldn’t want to wager on where we’re heading next. Holiday weeks are tough sailing to begin – without EU members falling by the wayside. Plenty of opportunity for monkey business and you know someone will get the results early (hint – it won’t be you or I). FWIW – I hope the Greeks decide to rip off the band-aid and leave the EC. It’s been nothing but drama since they joined up and I’m convinced both sides will be better off over the long term. I believe some type of separation over the long term it’s inevitable. Under the current conditions Greece is simply unable to function as a member of the European Currency Union.

Alright, if I see anything interesting I’ll make sure to post a quick update tomorrow morning. In the interim keep it frosty and don’t take on any positions that would cost you any sleep over the long weekend. It’s summer – go out and roast a hotdog or something. Get a tan. Pet your dog. Talk to your wife if you have to. The markets still will be there on Monday – hopefully in one piece ;-)

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.


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.

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.


The Game In A Nutshell

I think today’s session should serve as a stark reminder that the very last thing you should ever attempt is to apply even the slightest sliver of logic to market behavior, especially during volatile periods. I’m going to make this very easy for you rats, so listen up and listen carefully now. If in doubt or if you find yourself attempting to make a prediction as to where the tape may swing in response to big news events remind yourself of the following:


Now read the line above again a few times and then write it on a piece of paper and stick it to your wall or resident shark tank if you have one handy. I prefer the latter as it serves as a proper backdrop to that message and for all you pikers I have put together a little theme pic which you can use instead ;-)


Case in point are the spoos which first gapped lower screwing anyone left long – then attempted to close the gap until the 100-day SMA (and weekly NLBLs) to then turn on a dime and continue lower. Clearly there is no explaining any of this and neither should we try. The chart above provided us with all we need to know.


So did the Zero I may add which has been pointing down all day since the open. But chances are you weren’t watching that one as you’re a nomadic ZeroEdge reading retail rat and thus can’t afford the monthly subscription for your $2000 E*Trade account.


Soybean meal – I just held my nose and take a spoon full long here with a stop below 332. 1/2R only as the daily context is looking rather bearish so odds have it I’ll be stopped out. But if not it’ll catch a bunch of folks off guard.


Euro – nice upper BB touch and I’m short here 1/2R. I do love this chart but the gap turned into a short squeeze. Why? Because a reversal higher and beyond didn’t make any sense whatsoever, which is exactly why it happened. If that confuses you please re-read the intro above.

The force today is definitely with Forex – and for my intrepid subs I have more setups waiting below the fold:

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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That’s it for today – I hope none of you guys were caught off guard and are positioned nicely. Definitely no lack in volatility and odds have it that we’ll see a bit more before things quiet down for Independence Day weekend.


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    1. Happy Independence Day
    2. The Quiet Before The Storm
    3. Timing is everything – Black Gold
    4. Short Term Updates
    5. The Game In A Nutshell
    6. Filling The Gaps
    7. Greece Saga Precautions
    8. Furious And Furious Friday
    9. Dangerous Turf
    10. Forex Update