Spoos Back At Resistance

Very interesting session thus far – the spoos opened lower but reversed almost immediately and have since been pumping higher without taking as much as a breather. Judging by the Zero Lite accompanying momentum/participation has been minimal. It’s possible that this is just a counter snap but I think the final hour before the bell will provide us with a few more hints.

As I am typing this the spoos have approached an inflection point which cannot be breached if the bears want to get a bit more play next week. We ran up all the way to that NLSL and are now pushing sideways. I would be short here with a stop right above that NLSL. Next best resistance is that NLBL at 1414.25. If you are taking a short position here and we close below that NLSL today then I strongly suggest you watch the spoos starting Sunday night – for obvious reasons.

VIX reversed at its 20-day (2.0) SMA today – we should always expect resistance there and the bears will have to conquer this one if they want to see further downside (in equities). In the past three months we have only spent eight sessions above that SMA, which in itself speaks the to the strength of the medium/long term trend.

Ole’ bucky retested its 100-day SMA and immediately dropped back. Great entry if you managed to catch it. Unfortunately I was plagued by technical issues all day and did not have a chance to send out an alert. In any case, what’s important here is that SMA which will be the our Maginot line going forward. If not breached post haste (i.e. in the next two sessions) then I am afraid further weakness awaits and we may drop all the way back to 79. And that does not bode well for my exchange rate here in Spain.

A few more setups for you subs and then let’s call it a week. Please step into my lair:
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For starters we have an inside day on the USD/CAD. Both sides are looking good here.

Wheat heading for NLSL support and I want to be long here unless of course we breach that Net-Line.

Soybeans – another inside day. This thing has been on a rampage and I would take either direction here. If this was equities I would probably not go long on a green breach but always remember that commodities move differently than stocks. If you haven’t followed FX or commodities then you have not seen a truly nasty short squeeze.

The 10-year is pinned right below resistance. I am short here again with a stop a few ticks above that NLBL. Also would be long here on a breach – no directional bias.

Corn – also heading for NLSL support. Same idea – long until we get a breach. The hourly panel indicates that the easy bear food may have run out as we touching both the 100-h and 25-h BB lines.

Last but not least – crude. Perfect NLSL touch today (this seems to be a theme today on the commodities side) and we already bounced back. I am long here with a stop below – keeping it simple/stupid. Seasonally this one could be walking sideways for a few days or a week. Thus I would not recommend options – stick to the futures or you may get theta burned.

That is all – enjoy your weekend!



This entry was posted on Friday, August 24th, 2012 at 2:30 pm. Both comments and pings are currently closed.

  • amokta

    Is it groundpork day? :-)

  • captainboom

    Have a good weekend rats.  I’m outta here to go do a show.

  • Skynard

    /CL back tested and tanked, need to take out today’s low now

  • newbfxtrader

    Inside day /6j breaking to downside.

  • BobbyLow

    Don’t think that’s going to happen today.

    Once Open Outcry closes at 2:30 PM and then Volume dries up.  The 2:25 5 Minute Candle had 3,000 Contracts.  The 5 Minute candles are now running in the lower end of the 150 to 500 Contract Range.

    I’m going to carry a 1/2 Long over the weekend.  I don’t feel great about it but price is still away from my stop.

  • amokta

    Spike spx cialis !!

  • MrMargin

    Looks somewhat like exhaustion. Unfortunately, we’re running out of time and I don’t think I’m going to position myself short right before the weekend. Retracement on the SPX is IMO not deep enough yet to rule out deeper retest of the 1426.68 level.

  • Darth_Gerb

    Market close < 10 min

    It's Friiiday.

  • Rightside_ot_trade

    Mole, nice grain setups. Perhaps we’ll see some more SS rats get interested in those trades next week

  • amokta

     Yes, its pulled back a little now. Wise to let yourself have a no-positions weekend!

  • Skynard

    Agree, not today just pointing out a textbook set-up:)

  • BobbyLow

    Have a good weekend everyone.

    That’s ALL Folks.  :)


  • AMCabrera

    well, nice spikes on the pairs I just now walked in. Anyhow, missed both spikes by 10 pips and it immediately slammed into my trailing stops since I knew I would be gone I used them. Soo no profit made today. Just a normal ole Friday.

  • Th3_Acist

    Anyone else holding the EUR/JPY ID entry over the weekend?

  • newbfxtrader

    No reversal in COT data for Aussie. So should be a good place to buy. Lets see if things change next week.

  • newbfxtrader

    Holding short /6j. Was an inside day.

  • Th3_Acist

    What’s the reason for trading those? Less volatility? Or just your favorite Yen Exposure?

  • Darth_Gerb

    JJ, are you seeing what I’m seeing?
    (ok, calm down – take a deep breath DG, could be a blip)



  • newbfxtrader

    The yen spiked in a little risk off past couple days. However COT data still risk on. Unless that changes I will be buying the dips. I also have longs in aussie and kiwi and short long bonds. I think your eur/jpy should be ok given the fact that yen seems to be breaking the inside day to the downside.

  • Darth_Gerb

    Energy took a hit as well.

  • Skynard


  • newbfxtrader

    Finally eh? Lets see if this thing can turn.

  • newbfxtrader

    Calm down. Give it a couple of days! Be patient. Tops are processes unlike bottoms. You have plenty of time. Like a cruise liner turning.

  • Joe_Jones

    Was away the whole day. Lol, I can hardly believe my eyes (JJ wipes tear of joy). I’m already looking forward to Sunday night

  • newbfxtrader

    Finally. maybe time to STFR! Give it a few days. Tops are processes unlike bottoms. You have time. Also nasdaq is going to the moon on sunday. So that should drag everything up. Apple won vs Samsung in court and got awarded a billion dollars plus.

  • Schwerepunkt

    DG, how do you arrive at the setting of 0.2 in the box next to ATR? Do you always use that setting? Just messing around with that I found that you can increase it all the way to 0.9 and you still get the red Renko candle at the end. Once you hit 1.0, you lose the red.

  • Skynard

    Dollar recovered nicely and that should be a sell the news event. Current ST outlook is bearish. Have shorts in place and if 1400 is broken again willing to add. Holding short /CL, /ES, /SI, /ZS, /ZW and still long volitility, /DX. Was stopped out on AUDJPY, EURAUD. Still short EURUSD.

  • newbfxtrader


    Almost there me thinks. I would like to see some retest of tops. COT hasn’t changed on Aussie kiwi cad and still bullish euro. I think selling the next rally (hopefully we get one) is the way to go.

  • newbfxtrader

    Jackson hole coming up. A dovish fed is likely. Could give the dollar one more push down. I would love to see 80 before going long /dx.

  • Darth_Gerb

    good question.
    yes rats, the setting is variable.  just like RSI, MACD and all the rest.
    what I did was fine tune the number low enough to catch the smallest of a turn back in 2011.
    I consider 0.2 the high gain.  like a mouse straining to hear the first paw of a cat.
    for a general good signal, “you must be an idiot” not to see it by now, I stick with 3.0.

  • Skynard

    Check out this chart:)

  • Skynard

    News doesn’t matter!!!!!!!!!!!!!

  • Schwerepunkt

    Thanks for that.

  • 2SW Trading


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