Now Reading
We have a potential long setup here, but it sucks
40

We have a potential long setup here, but it sucks

by ScottApril 15, 2014

On Sunday night I warned you that after hours fuckery was in play and you should be cautious to the downside. Hope you heeded the warning. Yesterday we looked certain to fall off the plate and post a very bearish daily candle, but a masterful bit of intervention before the close pushed us straight off the lows. What we have now is a situation where the shorts are basically ALL IN, and the bulls are defending a last line in the sand. There is enough bullish evidence here that the odds favor the bulls mounting a last stand of sorts here. We have a potential bullish setup, triggered on break of the highs. The problem with this setup is that it is getting long into resistance. Personally I don’t think this one has the risk/reward basis for an intelligent trade, but if you insist on taking it perhaps monitoring market internals if it rises and trying to time an exit would be a respectable strategy. In any case you should be overly aggressive about banking profits.

Sunday’s warning


 

This is a tough one to take. The weekly chart is uber bearish and you would be getting long into resistance. Still it does have squeeze potential.

The 1min chart shows the anatomy of the end of day bounce was not natural.

Scott Phillips

 

 

 

 


About The Author
Scott
  • newbfxtrader

    https://www.tradingview.com/x/f5jzGHzp/

    Those trying to go long cable. Might as well wait for this to resolve.

  • Ronebadger

    Thanks Scott…I’m waiting for a clearer picture (if that EVER happens…)

  • Dyellowflash

    Long yesterday YM, TP all, long premkt today and TP 40%. Thanks for the heads-up!

  • Dyellowflash

    TP another 20%, rest at Breakeven stops about 60 pts away. Job done and dusted in 40 mins.

  • http://dartht.blogspot.com/ Gold_Gerb
  • ridingwaves

    back to where we began…10 yr still below 2.70..spy sitting on top of 100sma-correction was sitting on top..tricky…could be big red moon down now…failed breakout

  • aiki

    Could someone elaborate on why metals took a dive? The dollar was up marginally, so what? (now flat). Have small position in copper via JJC (sigh). Was it the Empire State release? TIC purchases were up huge, unless the data is wrong, that might’ve pushed up uncle bucky, but it wasn’t up that much. Of course, all the high beta commodity FX aud/nzd are off too…

    Since I believe in a 100% manipulated market, this does not surprise me, but I don’t see the catalyst at the moment.
    thoughts? Surely missing something here…unless the idea is to slam metals so they can be purchased at a better price prior to another centrally planned destruction of the currency (to the eventual benefit of equities, of course…)

  • Dyellowflash

    http://www.mql5.com/en/charts/1742587/xauusd-d1-intertrader-ltd
    Yesterday’s fake up was resold down the channel. Everybody’s Stops got triggered. Down trend day.

  • http://evilspeculator.com molecool

    Why does the reason matter? You simply should be trading the tape the market gives you. Your sentiment suggests you have opinions and are trying to make sense of market gyrations. That is not the way. Do you think the boyZ manning the GS prop desk complain when a trade goes bust? They simply evaluate the odds and put in the trade – one out of 10,000 campaigns. Next.

  • ridingwaves

    big delivery month..opex next week….what a vicious take down it was…if there is so much gold floating around how come it will take 7 years to get it back to Germany

  • http://evilspeculator.com molecool

    Hey ratlings – I’m about to hop on the train here in Barcelona. It arrives in VLC an hour before the close and I intend to put up a quick update around the time the market closes. So look out for that one. Tomorrow I’ll be back as usual.

    Doesn’t look like anyone missed me. Perhaps I should have extended my trip! 😉

  • http://evilspeculator.com molecool

    Rule #657 of trading: if you hear someone bitch about a loss they are either retail or were trading a position too large for their account.

  • wandering196

    sure we missed you!

  • Skynard

    Ruh-Roh!

  • aiki

    The busted trade was very minimal ($100 or so…) And no, I don’t care all that much – I’ve never been much with the metals, so was seeking a more informed view. As loss is whatever it is, but huge gaps generally take some effort on the part of somebody, so it has my interest. I am trying (yes, trying) to follow your example and focus only on the tape, but I have always been curious about these things because (manipulation aside) there is a macro dance that I find interesting to try to understand, in the hopes that it will help me be better informed next time around.

    Perhaps I’d just be happier (and more effective) if I just put all that BS aside and just focused on the tape? (You don’t have to answer, I KNOW what you’re gonna say…)

    Btw I didn’t know there were 657 rules, because I feel like I have broken them all at one point or another and I was only up to 623 by my count…

  • captainboom

    Avoid news. An excellent article regarding why.

    http://dobelli.com/wp-content/uploads/2010/08/Avoid_News_Part1_TEXT.pdf

  • newbfxtrader

    https://www.tradingview.com/x/Q1pZaVpE/

    why were you long? it was bang into major resistance.

  • newbfxtrader

    I could pitch in to keep you travelling as long as the market tanks :)

  • aiki

    Yes, but from a bit below. I could see it was consolidating above the low, and did expect a PB before moving on. My bad: weeklies rule!

  • aiki

    Actually I want to take this a bit further on the gap thing:
    Scott responded a few days ago to my question about OP’s. He said, “Longs got fucked, shorts got fucked, now there are new players involved and since they are new, they are weak hands that will jump at the first sign of trouble.” (not exactly, check the post…). I really liked this as it was a way to see into the psychology of the move. This kind of stuff helps me think properly (I hope).

    So regarding gaps like in the metals (or huge gaps in anything), I want to ask, “to whose benefit?” Did the world fundamentally change overnight (always, always possible….) but gaps take some effort (and usually fill), and just like OP’s there is probably some “reason,” for it that has some meaning to someone. (i.e., the someones whose account is now very green because of this). Comex delivery could be a very sound reason for this.

  • http://dartht.blogspot.com/ Gold_Gerb

    you were gone? {snicker}

  • Skynard

    ZL bending………

  • Skynard

    Waching VIX, spike above 20 will get things rolling:)

  • ridingwaves

    take note, I know its not a good thing here to say, but there are minimal Fed treasury purchases the rest of week…first week with 3 days in a row of no buys in years….

  • Skynard

    5 min div, taking half profit.

  • http://dartht.blogspot.com/ Gold_Gerb

    after a short squeeze, she jumped.
    opX.

    http://s18.postimg.org/6oihcje2x/jumper.png

  • Skynard

    Next spike will be full short again.

  • Ronebadger

    JSTFR?

  • Skynard

    shorting /ZW @ 700

  • wandering196

    Just looked carefully at Scott’s 1 minute chart Thanks. it helps me with the chart I posted yesterday

  • http://dartht.blogspot.com/ Gold_Gerb

    looking at the Spooos..yep.
    OpX.

  • Skynard

    Those bulls are pissed:)

  • http://dartht.blogspot.com/ Gold_Gerb

    just imagine if you were “emotional”
    he he.

  • mugabe

    they’re probably happy. SPY up 1% on the week as I type.

  • Skynard

    Indeed:)

  • http://dartht.blogspot.com/ Gold_Gerb

    a good day for a range algo, too see you through.

    http://s17.postimg.org/457iq6ha7/whipsaw.png

  • http://evilspeculator.com molecool

    Hey guys – I’m back. Just got home and had a burger. Going to parse the tape now for a quick update. So stay tuned until a bit after the close.

  • Skynard

    That was a crazy tape but fun.

  • mugabe

    That 184 level on SPY looks really crucial as regards the next move

    http://scharts.co/1h0HE75

  • Ronebadger

    interesting back test… we’ll see