Sell Off Thursday Wrap Up

Enjoy a re-run of today’s E-Mini session exhibiting participation as measured by our Zero indicator. On the left side is the hourly panel and the Zero Lite runs on the right via the 5-min panel. Swing traders and scalpers are encouraged to watch the 5-min panel for early clues – in particular price/signal divergences and lack of participation as expressed by a flat signal. If you like what you see then may want to watch some earlier ones – you will find plenty of examples of what to look out for and how to avoid common traps when trading the E-Mini. Plus you may enjoy the tunes ;-)

Today’s session was a brilliant example of how to read participation and divergences. Watch and weep – and perhaps learn how to play the spoos Zero style. Enjoy!

The future is now – so don’t bring a knife to a raygun fight. If you are interested in becoming a Zero subscriber then don’t waste time and sign up here. A Zero subscription comes with full access to all Gold posts, so you actually get double the bang for your buck.

Cheers,

Gravity Outlook Stable

The Fed admits to the economy still sucking balls – it’s only been eight years guys, what did you expect. And in other more cheerful news the sky is expected to remain blue until further notice. The long term outlook on gravity also is positive. Yah, thanks – tell me something I don’t know.

So if you’re still a bear listen to me now and listen to me very carefully: Stock up on more vaseline as you will need large quantities of it should you continue attempting to short equities. Unless you have less than three brain cells to rub together it’s rather simple to understand how this is going to play out.

This entire QE game and the global currency race to the bottom has now devolved into the following script::

  • The Fed will continue to pretend that it wants to hike rates.
  • However, and here comes the trick, an actual hike is made dependent on the economic data.
  • We all know the economy will continue to suck. It has sucked since 2008 and the U.S. doesn’t make jack anymore, plus you can only sell so many yoga apps on iTunes. And the marijuana market is getting crowded.
  • Ergo – the Fed gets to postpone until further notice or if by some miracle one of two things happen:
    • The economy actually improves. Good luck with that.
    • They manage to get better at cooking the books. Possible.

Let’s face it – the Fed is incapable of hiking rates, at least during this decade. As soon as they do the Dollar is going to explode and they are barely able to contain it as it is. Which in turn would completely eviscerate the U.S. economy and perhaps even crash equities markets worldwide. If you think you want to see this happen, think again.

2015-06-17_spoos_update

So we did a pretty good thing yesterday morning getting exposed long near 2070 – and if I say ‘we’ then I mean Skynard, a few other hardcore rats, and yours truly. Which is probably the total of all retail rats out there holding long positions – I bet you someone else’s money a ton of people went short and are probably still holding. SuCKers.

Alright – there’s no predicting what’ll happen next but I’m going to move my stop up to today’s big FU spike low near ES 2078. Then I’m going to grab a glass of good Spanish Rioja and watch the ensuing squeeze whilst practicing my evil laugh.

If you want to tag along here’s a training video – feel free to post your own.

See you guys tomorrow ;-)

The future is now – so don’t bring a knife to a raygun fight. If you are interested in becoming a Zero subscriber then don’t waste time and sign up here. A Zero subscription comes with full access to all Gold posts, so you actually get double the bang for your buck.

Cheers,

How To Catch A Floor With The Zero

It’s been a while since I put together a Zero video, but as yesterday’s session was a textbook example of how to play prospective sell exhaustion I simply couldn’t resist. So grab a cup of coffee or your favorite tea, sharpen your pencil, and pay attention – you don’t want to miss this one:

Zero_4266

First let’s set the stage – this is the Zero right before the open of yesterday’s session. What stood out to me right away was a pretty pronounced divergence on the hourly panel (on the left). Price is painting new lows for the year but the daily Zero is starting to push toward its center (or 0) mark. What we DON’T do here is to blindly go long – no siree bub! This is exactly what market makers would expect retail traders to do – make haphazard bets that a low is in place. Stainless steel rats like us however understand that engaging in hasty predictions is hazardous to one’s account, so instead we’ll watch the Zero Lite for early clues:

Now if you watched the video then I think you understand how we operate down here at the lair. When playing the swings we always look for the Zero Lite to give us sufficient clues to warrant a contrarian position. Most importantly however we also wait for price to back us up a little. There’s no predicting when a low truly is in place, and it’s better to get in a little bit late than too soon.

I usually start with 1/4R or 1/2R and then put my stop a few ticks below the prior low. As price pushes in my favor I slowly add a few more contracts until I end up with 1R. Things got a bit worrisome there at the EOS but the E-Mini did hold the 2k mark overnight and is currently at 2012 as I’m typing this.

Will it hold and is this a permanent floor? I don’t know but I’m well positioned as I started to accumulate a few longs near 1990 – which now affords me the buffer I was hoping for yesterday in anticipation of today’s FOMC announcement. Compare that with someone who’s trying to chase the tape higher here or, even worse, is waiting for an opportunity to scale out of rapidly depleting short positions (ahead of a high volatility event).

Once the fat lady has sung this afternoon we’ll know if our evil plan will come to fruition.

The future is now – so don’t bring a knife to a raygun fight. If you are interested in becoming a Zero subscriber then don’t waste time and sign up here. A Zero subscription comes with full access to all Gold posts, so you actually get double the bang for your buck.

Cheers,




    Zero Indicator


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    1. Thursday Road Map
    2. Volatility Wave Surfing
    3. Dangling By A Thread
    4. Paying Attention Pays Off
    5. Sell Off Thursday Wrap Up
    6. Pay Attention Now
    7. Setups Setups Setups!
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