All Quiet On the Western Front

On the equities side that is – feels a bit like a sideways correction to me. First I thought I would not have much to contribute today but for some reason a bunch of setups materialized today, which makes me a happy camper:

Let’s start with coffee futures which appear to be in the process of painting a floor. Not this first attempt will succeed but since we don’t have a crystal ball we’ll just have to go with the setup. I’ll be long on a breach of the lower 100-day BB near 186.50 – set your watches.

Here’s Volar’s coffee sentiment chart – looking like a potential floor to me.

Soybeans dropped through the NLSL and then bounced back. I love setups like this and you can either be long here on a breach and close above OR stay short as long as that breach does not materialize. Maybe the long trade has the bigger odds given the ongoing trend – but if she goes down it may start a long squeeze.

Volar posted some sentiment charts yesterday that suggested that both commercial net positions (i.e. hedgers) and large specs (i.e. the big boys) are reporting stats that would suggest we are near a top here.

Okay, below a few more goodies for my subs – please step into my fumigated lair:

Wheat is starting to look like treasury futures a few weeks ago. Technically I would want to be long here near 6.31.

And according to Volar’s COT map this may indeed be the way to go.

The 10-year treasury futures snapped back with a vengeance yesterday. I think someone on the board actually suggested that – congrats on making that call – I hope you traded it as well. In any case, in the context of the trend trading story I presented yesterday that 128’300 NLBL is where I’ll get a bit more excited. To be clear – it would be very interesting to see a failure there and if you are in it long term you should watch this resistance cluster closely.

On to currencies – the AUD/USD is sitting right at support and this should be good for a long trade. But you know the drill – a stop out triggered below that 100-day SMA near 1.04 leaves nothing but air below so be ready to flip that coin if necessary.

AUD/JPY also decided to join the fun – it dropped through one NLSL and stopped at the second – that old tease! I am more excited about a trend continuation here as the 25-day SMA is not far from here at 86.54. Which means I would not want to take a short trade on a breach here just yet – that SMA would be my inflection point.

EUR/USD – looking bullish as it has been holding the NLBL thus far. I know those candles look a bit bearish but a push above that 25-day SMA would get me on the long train.

And last but not least – what a sweet setup on the EUR/AUD – Señor Cabrera’s (second) favorite pair! Be long here on a close above that 100-day SMA and possibly enjoy a ride all the way into 1.33 or higher. I’m pretty excited about this one – but bear in mind that good things often require patience. So don’t be surprised if there are attempts to throw you off the saddle.

Cheers,