The Woodchipper Is Upon Us
I don’t need to read the news (which I haven’t) to know that we are shaking out some weak hands here. Which way this thing is going to resolve is yet unclear but I do have a few pertinent charts that should give you a leg up or two:
Things are moving fast so I better hurry as I already had to re-capture some of my charts. The volume profile panel shows us playing the musical chair game around 1380 and if you are dumb enough to participate you may find your ass in a sling instead of a chair.
Since I took this screen grab we actually have dropped through the 100-hour SMA and then pushed back up a little. Currently we are trading at 1374 1371 1368 and it’s starting to look pretty ugly. In short I really think we need to push above that before the close of the NYSE session or we will probably see follow through to the downside overnight. [UPDATE: well, that is looking unrealistic at this point]
The daily shows us the bull’s final line in the sand at 1357.5 – if we drop below that NLSL then hasta luego a 1322.
Some more perspective for my intrepid (and apparently overly forgiving) subs below:
More charts and cynical 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 or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
The P&F chart shows us technically weak as we are about to take out a bit of diagonal support we’ve been building here in the last week. Currently we are four handles away from 1370 – so we are right at the line of scrimmage here. Very exciting! 😉
Copper’s PNF is looking very compelling and a drop through 3.5 would lead us lower. I’d be long there with only a few ticks of risk. And yes, I would flip that trade in a heartbeat – actually I’m hoping this is what is going to happen as copper has been looking weak. Not marked on the chart is an extension of that red diagonal which probably somewhere at 3.3 now. Make a mental note as that would be the last bastion of defense if a downside fake out is attempted.
Currencies – the AUD/JPY is looking like crap and I think it needs a vacation. 84.8 – our NLBL on the daily seemingly is where the rubber meets the road. A bit late to take a short trade here but if you are in then this is where you get out. Until that happens you should be good until the 100-day SMA near 83.
The one setup I really like today – EUR/JPY – we have a nice NLBL breach here and you can be long with a stop below 106.79 – don’t be too stingy though – I think there will be blood this week.
And of course bonds are on the long side now. Unfortunately I was traveling yesterday but I am sure you guys knew the drill based on what I presented previously about a breach of the 100-day SMA. Everything is inverse now – your stop should be below 141’19. REMEMBER that 143 was our acceleration point on the long term charts – please go back to my Tuesday post if you don’t recall what I’m talking about.
Crude remains a good long at the 100-day SMA – if you are long then there’s nothing to do until we see prices dip below 102.
Bottom Line: Don’t get emotional – this may be just a shake out or it may be the real thing. The charts above paint a very clear picture of where you need to start thinking bearish – we are close as I’m writing this we have not crossed the Rubicon just yet.