A quick update – while I was out the spoos breached the 25-hour SMA. This means I’m closing out all remaining lottery tickets – at least for now:
The perennial buyers are obviously attempting to limit the damage. Until we drop back below the 25-hr I will remain out. Not sure about long positions just yet, I would prefer to see some retest of the SMA.
It’s been a rather interesting session thus far and I have been pretty prolific today offering some updates on playing the spoos. My entry was 1399 as most of you are probably aware of since I announced it all over the place. We dropped all the way to 1384 but have since recovered ten handles (as of this writing). Here’s where and why we bounced:
As you can see – right at the big volume hole near 1388. And we need to get below 1388 for the ole’ Flux Capacitor to kick in. We were about to pass over but we must have hit some inter-dimensional hurdle (Fed cough cough) and some emergency buyers showed up.
So if you saw this coming – why did I not scale out near 1388? Simple – because this is not the trade I’m looking for and if I jump in/out too often I’ll get left behind if we paint a big move. Has happened to me back in the day and I learned my lesson since. This is not a normal scalp, which is why I’m approaching it differently. Anyway, my stop is now above VWAP and I’m either getting stopped out near 1397 or I get to target (which is quite a bit lower).
The good news actually is that the volume hole was observed. This means that we will be able to use it in the future if we come down for a visit again. Until this happens I am however neutral until ES 1400. Depending on the close I may try another short or go long if we push above it.
In terms of setups I have very little to offer today, so let’s just get it over with. The USD/CAD is back above the 100-day after testing its 25-day (now you know why I use these things). I want to be short until I get stopped out above that diagonal on the daily. If that happens I’ll flip for a long. Sheesh – a bit too much work and gyrations this week – not my favorite tape, this. I’m pretty ecstatic about the elections finally being behind us.
EUR/AUD approaching support on the daily. I’m waiting for a breach of the 25-hour now to get long. Not interested in a short position unless we drop below the 100-day.
That’s it for today, folks. I’m going back to coding – doing some work on the NinjaTrader based Mole system again. If anything exciting happens I’ll chime in via Google+ or Twitter.
This is a special intra-day update: The spoos are now sitting at their last line of defense on both the hourly and daily panel. If you are a swing trader or scalp hunter then this may be a great opportunity for a contrarian position:
Things are looking critical – yes, again. The sheer fact that we are flipping back/forth from possible buy to sell signals several times in two weeks should make us think. Equities seem to suffer from an acute case of dissociative identity disorder and that was the big I was covering last weekend. Anyway, this is either a major fake out or it’s the beginning of a big slide. Great prediction there, Mole! 😉
Well, since I don’t have a crystal ball this means I want to be long here until ES 1400 – once we drop below that I’m short. Very simple – no ifs and no buts, and no lofty guessimations involved. Yes, we may have to change positions a few times until this sorts itself out (before X-Mas please!) but I think the gain will be worth the pain 😉
You have been briefed!