Trading On The Edge

One of the advantages of living in Europe is that I am able to decipher the tea leafs a few hours before most of you folks roll out of bed. Early this morning I did my best to let everyone know that we’d be seeing some movement over on the equities side (and of course across Forex as well). Admittedly unless you’re an early riser the entry was tough to catch and I bet most of you guys showed up at and wondered what the frell just had happened.

I think either the spoos or the YM are still good to go though – on the ES in particular if we see a late day pullback into 1445. So here’s the setup – we’ve got both a Retest Variation Sell plus an inside day breach which was triggered at ES 1546 (or YM 14466). We’re now below two NLSLs on the ES and above a similar cluster on the YM. At this very moment I prefer the ES setup as it’s weaker and may move like gangbusters if she really slides. The official stop should be one tick above the inside day candle’s high.

Of course it’s hard to say what happens over the weekend but I think the bears may actually have a shot at this. The VIX is closing inside the BB and that’s potentially supportive of some further downside and a more thorough correction. Fortunately we enjoy a pretty small inside day candle so our stop is nearby. Nevertheless I would recommend you start with a small position and pyramid higher via the BPC as price moves in your favor.

Well, I hope you took that setup on the ZN the other day – it’s been running like a hare since and I couldn’t be happier. Just took partial profits but will leave a few lottery tickets running into my projected target near the upper BB.

Here’s a little freebie for you leeches – USD/CHF could be ripe for the plucking in a day or two. The 25-week has already been tested and it’s approaching the 100-day SMA where odds are reasonable it finds some support. I wouldn’t touch it however unless I see that 100-day touched and tested.

A few more goodies before I reach for my Hefeweizen and call it a week:

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Well, we had another great week – time to kick up our feet and crack open a cold one. See you guys later.

Cheers,