As I always keep drilling into your collective skulls: It’s never about the news driven spikes, it’s always about what follows next. Granted the former have been responsible for most of the upside progress in equities over the past few years:
It’s a sad picture but it is what it is – I for one have long given up on expecting change. In the end we are all but humble steel rats feeding off the crumbs that fall by the sideways. Anyway, if you want to get a sense of future direction then you don’t look at what already happened, you look at what is not happening. Ignore the obvious (or what they want you to see) and focus on what’s missing (or what they want you to miss). Simple rule of misdirection – ask any grifter or watch Hustle – great BBC series that will teach you more about trading psychology than any pertinent book. And it’s more entertaining.
And I would have to say that any follow up to the fiscal cliff agreement spike is most solidly lacking. As you can see the E-Mini is now wedged between a volume hole below and a volume abyss looming above. Which may explain the excruciating sideways tape we had to endure in the past few sessions.
NYSE UVOL and DVOL – not exactly a picture of health right now. Yesterday we actually closed in the green despite the fact that UVOL was leading by far. Call me skeptical about the prospect of our 1600 price objective. I rarely doubt my P&F charts but this old dog has seen horses puke before.
Nevertheless – nobody seems worried and we almost touched the 13 mark today over in the VIX. Boy what I wouldn’t give to see us drop below that mark. That ought to be interesting and I would consider it to be my patriotic duty to switch into long vega extra evil speculator mode.
Quick update on cable. The 100-day SMA broke yesterday and we are now effectively short with a stop above the dropping 100-hour SMA. Why that one? Because it’s dropping, unlike the daily one, grasshopper!
Dollar – I hope you grabbed that speculative long entry on Monday because we seem to be picking up momentum.
To give you an idea of the implications of this setup. IF we actually manage to close above that weekly NLBL (left panel) it would represent enormous progress for the long term. Not out of the woods by far – there’s still the matter of that 100-month SMA.
But we did get a nice entry and we took it (I hope you guys!). I concede that the odds of continuation are iffy – however an entry is an entry and if it manages to climb higher it may trigger quite a few shorts. Always worth the effort in my book.
Cocoa – you may recall that short entry from Monday. Looking good so far but it’s painting an inside day. A breach of the long trigger tomorrow would be my stop out. A drop below the short trigger is confirmation. If you are not in this one yet then these are your entry points – have at it.
More below for my intrepid subs – please step into my lair:
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Let’s do some setups, shall we? Since the FX front is thin right now (and TOS data is still broken) I’m doing a bit more on the stock front. If you guys enjoy this (or not) please send me an email and let me know your thoughts.
ISRG – kissing the underside of its 25-day SMA. Speculative short here with a stop above. If she breaks then I’ll be long with a stop below the 25-hour SMA. Hope that makes sense.
GRPN – may hold that 100-hour and I’m long with a stop below. Also like that daily NLSL which may serve as support if we drop a bit lower. So that may be our second line of attack.
GRMN – looks like it may bounce here at the 100-day SMA. Again, speculative – play it small.
Inside day on BGC but I also like that 100-hour SMA run it’s doing. I would be short on a breach there and a drop through today’s short trigger tomorrow would be confirmation.
Inside day on Soybean – I’m partial to an early long here with a stop below the hourly SMA. But you can definitely use those ID triggers tomorrow.
Crude seems to be drooping a little and it’s again kissing that trend line on the daily. The last ID setup was a bit of a non-event but I have an inkling that it’ll pick a direction here soon. Anyway, I’m still long this thing but if it triggers a short tomorrow I’m turning coats.