Post Fed Musings

A lot of soft language came out of the Federal Reserve today, as expected actually. You will probably see a lot of nit picking regarding the actual statements presented by Yellen today, i.e. what does ‘transitory’ mean or how being ‘patient’ exactly chimes with the interest hike schedule set for next year. That’s all a lot of huey and I suggest you quite wasting your time interpreting FOMC tea leafs as the Mole is going to break it down for you:

  • We have seen crude prices being cut in half in less than half a year. Do you really think that was coincidence and natural market forces were at work? This was nothing but an economic hit job taken out on Putin.
  • They’ve now managed to not only cut Russia’s core energy revenues by half but they also managed to blow up the Ruble in the process, up to the point where trading was suspended yesterday.
  • And that certainly got Putin’s attention! Imagine the scene where his Swiss bankers very politely explain that Russia’s Ruble denominated assets are no longer margin collateral for trades or able to be used for wire transfers out of the country. I mean you’d have to think some of the top guys over there will be facing margin calls over long bets on western exchanges or USD denominated debt secured by worthless RUB assets. Ouch.
  • This is all part of what the British once referred to as the ‘Great Game’ and there was simply no way that our hapless Fed sock puppet Yellen was about to get in the way of the concerted bitch slapping of Putin initiated by the State Department.
  • Bottom line is that most likely we won’t see any changes to the interest rate hike schedule outlined for 2015 – it will more or less proceed as expected. However by generating doubt and confusion today it left enough space for imagination and thus keep the thumb screws on Putin.

And that’s how the game is being played, ratlings! I only feel bad for all those Russians who are caught in the middle – they are an acquired taste but I happen to really like the Russian people. You can say a lot about them but they are not hypocrites and they mean business – that means a lot in my book.

Anyway this battle clearly went to Obama but winning the war is completely different story. See, as a born German there’s one lesson they drilled into our heads when we were young: Never ever under estimate the Russian bear. Those guys are used to dealing with hardship and Putin’s popularity is as high as ever – the current situation may even give it a little boost. In the long term the Russians are going to dig themselves out of the current hole but this economic hit job orchestrated by the West (i.e. the U.S. and it’s Western alleys) will not be forgotten for a very long long time. I never understood why the West is so hellbent on making an enemy out of Putin.

putin_bear

But then again I’m a very small player and whoever is pulling the strings is fully aware of the points I’m highlighting here. I just hope the situation doesn’t escalate. The world is better off without a Russian nation thrown into  a deep recession, alienated from prior economic partners, and feeling threatened militarily. That could quickly get out of hand – black swan anyone? Never ever under estimate the unexpected consequences of your actions.

2014-12-17_dollar_update

So real quick a few snapshots of some key markets. The Dollar most definitely positive here and we may just hold that 25-day SMA now. Let’s see what tomorrow brings but I’m pretty stoked about this one.

2014-12-17_spoos_update

The spoos still bumbling about below their 100-hour SMA. We are at the 100-day but this candle is not exactly looking bearish. So there is potential for more ugliness.

2014-12-17_UVOL

Which is a bit surprising as we had solid buying mojo today – look here the UVOL/DVOL plots – green and very organized it seems. So maybe this is a last drop before it’s being punched higher?

2014-12-17_NYADV_NYDEC

I wish I could offer a definitive yay or nay here – the advancing/declining NYSE ratios also look positive. So I would have to conclude that we have a reasonable chance for at least an attempt to push this puppy higher. No setup opportunities though here. I tried a lottery ticket long yesterday and quite frankly this is not important enough for me to throw any more capital into this volatile tape.

Some more thoughts on crude below for my intrepid subs:


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Cheers,

Strap On Your Helmets

Fasten your seat belts and strap on your trading helmets – it’s going to be a rough day! I was chatting with Scott this morning and his take on the whole Ruble/Fed/Crude situation was “Anything and everything can happen today.” Exactly right but that makes for shabby blog posts, so let me try to shed at least a little light on what we’re heading into:

predator_helmet

I’m actually considering to get myself one of those predator helmets – super bad ass. Would look pretty silly on the little moto I’ve been using here in Valencia. Perhaps better to get a Ducati first. No worries – very safe bike as Mrs. Evil would never let me ride it – she has seen the stunts I pull in traffic.

2014-12-17_events

Okay, this is the laundry list of event risk we’re up against today, starting at 8:30am with the CPI numbers for November. I don’t think it’s going to matter as much as the Fed interest rate decision. Don’t expect much movement on the equities side until Yellen’s announcement.

2014-12-17_spoos_briefing

So far we’ve seen nothing but lower highs and lower lows, with two attempts to overcome the 100-hour SMA. The game has been played however and today’s resolution will come after 2:30pm – brutal and inflicting as much damage as possible.

Frankly speaking – as tantalizing as the situation may be here, it’s a very tough trade unless you are on the inside. It’s a coin flip and it’s fine to take out a lottery ticket unless you risk more than 1R. Options are impossible here given where we already are on the VIX front – so screw the vega play (unless you’re selling but let’s not go there). I’m going to stay out of this one – sorry – cyclone level conditions like these are beyond my pay grade.

2014-12-17_EURUSD_briefing

EUR/USD is the only setup I like this morning but given what’s going on I’m only in it for 1/3R – AND I’m hoping to be stopped out as the rising Euro is a big thorn in this expat’s eye. ISL actually below 1.242 – I changed my mind after realizing the flood of events we’re facing today. So it’s really just a teeny weeny play and chances are it’s going to get shaken out.

Bottom Line: Plenty of excitement in the works today but very little entry opportunities. I’m keeping a bucket of popcorn ready and see how it resolves. Forget about support levels on the equities side – if 1955 goes for whatever reason today then we’re dropping to 1900 like a rock. Similarly, if rates are being kept lower than anticipated then we should see a massive jump. Word on the street says that Yellen is not going to mess with the state’s department’s plan to declaw Putin once and for all. But I’m not going to bet money on macro economics/politics, leaving that for people smarter (and more connected) than me.

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,

When There’s Blood In The Streets

You surely have come across the old aphorism coined by the Baron Rothschield, an 18th century British nobleman and member of the ultra secretive and original one-percenter Rothschild banking family: When there’s blood in the streets – buy property.

2014-12-16_fear

However that does not mean you should blindly step underneath a falling sword. Either you know something nobody else knows (which is illegal but clearly was the modus operandi of 19th and 20th century tycoons), OR at minimum you need to see some technical context that justify jumping into some lottery tickets. Given the level of fear across various verticals today I set out to take advantage of the situation. And I did find three charts that tickled my fancy. One of which I’ll throw out for free:

2014-12-16_crude_setup

You probably guessed it – crude. Not much context here on the daily but we are dangerously close to the 50 mark and that’s where we also find the lower 100-month Bollinger. Will we see 48, 45, or even lower? I really don’t know but wipe outs like these are usually where I start looking for some short term context. I do like the hourly panel (very left) and have taken out an experimental 1/2R with a stop below today’s lows. Heck if I’m wrong we’ll be pumping gasoline for free by the end of the year!

FYI – in that context: Here in Spain gasoline prices have barely moved despite a drop of crude from 104 to 54 in a bit over a month. I can’t say that I understand all the dynamics of crude production and refineries but I do know when I’m being gipped.

Anyway, two more lottery tickets 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!

Please login or subscribe here to see the remainder of this post.

Play these setups with only 2R combined max - if you want to be conservative reduce your exposure to 1R total. We are talking lottery tickets here people!

Cheers,




    Zero Indicator


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    1. Freaky Forex Friday
    2. Better Not Fighting This…
    3. The Squeeze Is On!
    4. Post Fed Musings
    5. Strap On Your Helmets
    6. When There’s Blood In The Streets
    7. Monthly Support
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