Lower Highs And Lower Lows

I’m going to have to be brief tonight as I’m running late and I have a mountain of chores stacked on my desk. So let’s dispense with the formalities and let me try to get you up to speed on what’s going on and where we may be heading. More weakness in equities and right now the hourly panels are our best guides:

2015-03-04_spoos_update

Forget about all the lines and indicators – that’s beside the point right now. What really matters here is PRICE and the spoos are painting lower highs and lower lows. As long as we don’t breach ES 2100 we are heading lower.

2015-03-04_UVOL_DVOL

Selling pressure is definitely for real – observe the rather interesting UVOL/DVOL ratio spikes mid session. There’s a bit of panic selling right there – or perhaps it’s more distribution. Someone thought they may have had more time?

2015-03-04_zero

The Zero signal is for real – compare the signal range today with what we had to put up with over the past week or two. And the big spikes are to the downside – definitely noted.

2015-03-04_NQ_update

As you know I prefer the context on the NQ right now – I think NQ 4452.5 is the first and 4458 is the second line of defense for the bears. Also note that we sliced through the daily NLSL at 4427 but thus far it’s holding. If we close below it today or tomorrow we are going to 4350ish.

2015-03-04_AUDCAD_update

AUD/CAD update – I got pretty lucky there as I was about to grab a long position on a drop to 0.89. Fortunately the tape started to run away from me and I pulled it just in time. Better to be lucky than good – at least every once in a while ;-)

I probably should have looked at the daily panel this morning – that’s a stack of NLBLs right there and the odds for a breach were perhaps a bit low.

2015-03-04_gold_update

Gold update – nice entry there this morning and I’ve moved my stop to the break-even point. I’m holding this as it may continue lower.

2015-03-04_NG_update

My favorite chart today – NG – I also snug in there and for once it actually behaved and didn’t throw me out of the saddle. So far so good. I love the daily and weekly context here – unfortunately I’m less enthused about all those daily NLBLs above but I’ll deal with that if/when we get there.

2015-03-04_crude_update

Crude - got stopped out and then managed to jump back in on the way up. Only caught 1/4R however but I’ll take it and will built my position if it decided to finally abandon this range.

That’s all I got for today – I hope you guys grabbed one or two of this morning’s entries. If nothing else I would enjoy a bit more participation in the comment section. Alright, dinner’s waiting and Mrs. Evil is getting impatient – I have been advised to hurry the heck up. See you guys tomorrow!

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.

Cheers,

Setups Deluxe

Not a very interesting day on the equities side unless you enjoy playing the swings, in which case the sideways range on the E-Mini for instance offered quite some opportunity for jumping in and out. It’s the sort of day when the Zero really shines and not surprisingly it painted a pretty juicy Mole reversal signal during the mid day stab lower – plus note a very distinct signal divergence during the highs:

2015-03-01_zero

However what really caught my attention is the repeating pattern that its presenting itself on the hourly Zero panel (the lower panel). It’s starting to look like a heart beat and since it represents participation to the up/down side my conclusion is that buy/sell programs are bouncing the ball back/forth here. I looked around for signs of distribution or divergences on the momo side but still see very little.

2015-03-02_UVOL_DVOL

My UVOL/DVOL panel seems to support that notion as both lines are almost in perfect sync and are steadily rising – easy as she goes. Again, great day for swing traders, everyone else be nimble and be long near today’s lows and short near the highs (unless we breach above ES 2015 – see charts below).

2015-03-02_spoos_volume_hole

The E-Mini volume profile shows us a pretty deep volume hole at 2010 which now has been touched 2 1/2 times (the first one missed it by a tick or two). So that should serve as an inflection point moving forward – on the upside we have a ceiling near 2015.

2015-03-02_spoos_update

Which also is represented by a NLBL at 2014.75 – a breach above that by a tick or two and we are probably off to the races for another stab higher.

2015-03-02_USDCAD_triangle_setup

But I promised setups and am happy to deliver as we’ve got a ton today, especially on the futures side. But first Forex – here’s the USD/CAD which is painting a descending triangle formation. Now the odds for a breach higher is pretty low – I think we are talking like 15% or so. Which affects your position sizing – your odds of success are low but accordingly your pay off is high as many traditional chartists will expect a break down lower here – perhaps after a fake out spike higher. Sure, may happen, but every once in a while it just keeps running higher and burns the shorts in the process. Therefore my plan is to add 1/4R on a breach of 125.5 and another 1/4R on a breach above 1.266 – give/take a few ticks. 1/2R total with a stop below the 25-day SMA.

2015-03-02_cocoa_setup

Cocoa – very nice formation here and I’ll be long above today’s hammer with a stop below the NLSL (you can also use today’s low as usual).

Quite a bit more below the fold – please join me in the lair:


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Cheers,

Long Term Equities Update

It’s been a while since we’ve covered equities exclusively and as the month is coming to an end this is as good an opportunity to catch up. As you all know I have been dangling the ‘late stage bull market’ carrot for a few weeks now and quite frankly I don’t see any reason to change that outlook. I have been very adamant about expecting a final exhaustion spike higher and believe that is already in the works. Now before you start piling into puts be aware that we may be weeks, perhaps even months away from a downside event. So hold your horses and for now just enjoy the charts in preparation for where we heading most likely later this year. Enough weasel talk and disclaimers? Great – let’s get to the charts.

2015-02-27_zero

Actually it was the Zero chart that reminded me that a LT update may be in order. Over the past few sessions some of my subs and myself have been noticing strange signal patterns suggesting distribution. It’s very much possible but quite frankly I don’t see anything on the momo side that would suggest urgency. In short – nobody can predict when things will take a turn but we are a bit early in the game here still. So let’s review the evidence:

2015-02-27_SPX_LT

 

First the long term SPX with my trusted weekly stochastic. I almost never use this indicator – except on the weekly chart where it actually works pretty well! Right now we’re scraping 100 but in this bull market this means nothing. Most likely we’ll see an embedded signal (above the 80 mark) for a while before we head lower here. So no reason to be in a hurry – again we may be weeks or perhaps even months away.

2015-02-27_SPX_SPXA200R

SPX vs SPXA200R – the latter is the percentage of stocks in the SPX trading above their 200-day SMA. Now that one is looking bloody well divergent and eventually there will be a price to pay. But I don’t think that we’re due just yet (watch how the market will drop instantly after Mole’s statement).


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.

Bonus Chart!

022615pump

This one is courtesy of Chris Carolan over at spiralcalendar.com – one of the few other analysts I follow. Chris graciously permitted me to post this chart which I not only find absolutely compelling but also appears to be in line with what I’m presenting above. See the delay in the response on the S&P? Ponder on this one over the weekend.

Alright – I’m exhausted and am desperate for my Friday treat:

beer5

Not her you deviant! I’m talking about the Hefeweizen – which is waiting and that’s my cue. See you guys Monday!

Cheers,




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    1. Lower Highs And Lower Lows
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