We have been swing trading crude oil for some time since being in a trading range. Although, as the saying goes “Timing Is Everything” and at this time we are anticipating a move with the current action. The price action had momentarily dropped out of this range and triggered a buy for the Skynard:)
/CL Hourly – We have zoomed in to identify a potential for a long entry as seen above. Price is currently sitting at the 25 SMA (support) with a stop just below at 58.50.
I’m not really hot on any new positions this morning but I did close out a few of yesterday’s short term campaigns. Although I was able to snag two good ones there’s one that played me for a sucker:
GBP/NZD – I dug deep and grabbed a few longs after seeing selling exhausting. It was the right move but the bastard wound stopping me out by a mere two pips before it took of like gangbusters. Just to show you that this happens to everyone – nobody gets a free pass from Ms. Market.
Fortunately I had the foresight to also grab a few longs on the AUD/NZD. Sweet move here as well and I just took profits.
My EUR/USD campaign has come to an end as well. As much as I would love to see this one drop lower for a repeat performance the odds of this transpiring are rather low.
There were some questions regarding that subtle divergence on the Zero Lite (right panel) yesterday and earlier this morning. First up, it’s pretty normal to see a bit of a taper at the end of an extended sell off session. That doesn’t always mean that we’ll see an instant bounce. Perhaps if the signal would have started touching the Zero mark (in blue) a bit in the last hour. In that case I may have been tempted to grab a few lottery long tickets.
Now you may look at the overnight bounce and tell yourself that the Zero called it. I would disagree there – the price action almost 11 hours ago has little to do with what we ensued after the closing bell. Correlation does not equal causation. Thus I believe holding off on getting long last night was the right decision. If you stayed up late and kept watching the price action of course then you may have had opportunities as the spoos started to test a stack of Net-Line Sell Levels.
Alright, I’ll keep parsing around and if I see anything of value will post it here.
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I think today’s session should serve as a stark reminder that the very last thing you should ever attempt is to apply even the slightest sliver of logic to market behavior, especially during volatile periods. I’m going to make this very easy for you rats, so listen up and listen carefully now. If in doubt or if you find yourself attempting to make a prediction as to where the tape may swing in response to big news events remind yourself of the following:
Now read the line above again a few times and then write it on a piece of paper and stick it to your wall or resident shark tank if you have one handy. I prefer the latter as it serves as a proper backdrop to that message and for all you pikers I have put together a little theme pic which you can use instead
Case in point are the spoos which first gapped lower screwing anyone left long – then attempted to close the gap until the 100-day SMA (and weekly NLBLs) to then turn on a dime and continue lower. Clearly there is no explaining any of this and neither should we try. The chart above provided us with all we need to know.
So did the Zero I may add which has been pointing down all day since the open. But chances are you weren’t watching that one as you’re a nomadic ZeroEdge reading retail rat and thus can’t afford the monthly subscription for your $2000 E*Trade account.
Soybean meal – I just held my nose and take a spoon full long here with a stop below 332. 1/2R only as the daily context is looking rather bearish so odds have it I’ll be stopped out. But if not it’ll catch a bunch of folks off guard.
Euro – nice upper BB touch and I’m short here 1/2R. I do love this chart but the gap turned into a short squeeze. Why? Because a reversal higher and beyond didn’t make any sense whatsoever, which is exactly why it happened. If that confuses you please re-read the intro above.
The force today is definitely with Forex – and for my intrepid subs I have more setups waiting below the fold:
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That’s it for today – I hope none of you guys were caught off guard and are positioned nicely. Definitely no lack in volatility and odds have it that we’ll see a bit more before things quiet down for Independence Day weekend.