Resist The Dark Force

I am now forced to read my twitter stream with specially designed glasses in order to avoid accidental absorption of perma-bear bias via mental osmosis. Apparently as we are mere handles away from all time highs in equities popular wisdom ensures that we are are heading into unprecedented crash territory. You know just like the last time a few months ago, and then there was the other time earlier this year, and then last year around the same time, oh right and before that when rates were lifted by a few basis points. And who would be able to forget the big crash of 2014, which was almost as bad as the one in 2012. Of course nothing compares with the misery we all had to live through in 2011, 2010, etc.

Quite honestly the only thing I remember from the past eight years is that nothing happened. Especially back in 2009 and into 2010 when I was positioned accordingly and was cheering every single handle to the downside. ‘Die bitch die!!‘ Yes, that was me right there yelling at my screen. But the only thing that suffered was my sanity and my trading account. Fortunately for both I soon abandoned a directional bias lacking any tangible evidence and instead embraced an entirely novel ancient approach of simply trading the tape in front of me instead the one I was hoping for.

Now I would be a raving idiot to say that just because nothing nasty has happened in the woodshed over the past eight years means that nothing will happen. Yes just like the rest of you I pretend to have read The Black Swan (actually I did read it but alas) and am familiar enough with the concept of six sigma events and platykurtic distribution. In a nutshell: Anything can happen at any time and especially when you least expect it. Got that – been there – done that – bought the t-shirt. But if you cancel out all the excitement and drama the implicit (and less discussed) lesson to be learned is that it’s almost impossible to prepare for these types of events. Sometimes you’ll get a few tremors ahead of time which in hindsight are labeled ‘telltale signs’ of all the horror that was about to ensue. I call bullpucky every time I hear someone serve up the intellectual approximation of exactly that. There is no predicting when the market will drop into the abyss. All you can hope for is to avoid being over exposed in one direction and losing your ass and those of your equally ugly children on the first leg down.

Which brings me to today’s setup. It’s looking pretty juicy here as the short term panel is offering me a solid spike low in combination with a touch of the lower BB. Of course IF (and only if) my stop is touched I will start paying attention to a downside scenario. And for me that involves waiting for a last kiss goodbye retest (which fails and where I enter) followed by the first snap lower. So if you’re a Zero sub then today is the day to pay attention. Enough said 

My hourly volatility gauge by the way is suggesting an expansion is already in process. So expect things to start moving here pretty soon – thus if you want to get positioned now is the time.

If you are still long crude then I suggest you start pulling out. Shown here is the daily and the weekly and as you can see we are heading into massive resistance now. The easy leg of the journey is officially over. Every additional inch higher for the next five handles will have to be earned with blood and sweat.

Natgas – are you a man or a mouse!!?? Oh, you’re a woman? Well, that complicates matters a little – same entry though. Seriously though, don’t deploy more than 1/3R and you’ll thank me later. They don’t call it the widow maker for nothing.

Since Ms. Market waits for no one I’m posting this now while hunting for more setups. Always remember the old German saying: Wer zu spät kommt den bestraft das Leben. I could translate it for you but that would be half the fun plus it sounds much better in its original tongue. If somehow possible try to say it without sounding like Sergeant Schultz.

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