And That Is How We Roll

One of my readers made an interesting observation on the VIX earlier today. It seems that volatility was dropped for a few minutes, only to be corrected a short while later. Anomalies like these are easily missed but fortunately my SPX:VIX ratio chart visualizes this nicely:

And apparently today was no exception – there is a similar spike that occurred late in the session yesterday. I wish I had a proper explanation for this but clearly a momentary drop in volatility would only make sense if equities would have spiked higher. The only other explanation would have been a drop in the SPX with the VIX remaining in place – and clearly that did not happen either. Whatever is causing this – I do not like it and if you think I was cautious about trading equities yesterday then you can safely assume I doubled up today.

That little spike on the spoos today got us to one of my price targets – we are now officially scraping the 100-day SMA. And yes, of course we can push higher from here. Given the current squeeze (and what’s going on over in the FX lair) I would caution against picking tops here.

That diagonal resistance line on the spoos has also been touched – so seeing a bit of an intra-day reversal should come to no surprise to anyone (paying attention). If you managed to squeeze in short positions at the top – congrats. I suggest you set your stops above today’s highs and stick with them. Let the tape show us that it’s ready for a correction – you can’t wish it into existence.

Of course my current distaste for equities hasn’t kept us from banking coin. If you were a subscriber yesterday then you know that I served up a regular smørgasboard of setups. Let’s revisit them now so that you can either relive your glorious entries or kick yourself for not paying attention (or worse snoozing away):

Finally! After jerking us around for weeks I proposed another binary entry at the upper border of a smaller diagonal yesterday. And we seem to be off to the races! If we’re lucky then this starts a little short squeeze that gets us to target.

Silver not far behind  – in this case the Maginot Line (i.e. 100-day SMA) pulled our trigger finger. Not sure on a target here as there’s nothing but air above. I want to be optimistic but will wait until we know if we can hold the momentum.

Sugar – I suggested a reversal trade right at the NLBL. And wow – it literally fell off the plate. Was that a nice entry or was it a nice entry?

USD/CHF – inside day setup – and it’s making us proud today. If it keeps this up then a target of 0.952 is possible.

NZD/USD – less energetic after triggering our ID but I did warn about that NLBL right above. Which is really our ‘second entry’ so to say. If it can smash through it then expect some acceleration.

Cable – 100-day SMA breach which of course was our entry. Nice progress so far but expect a retest, always.

EUR/USD – not so good for my exchange rate here in Spain so maybe I should consider this trade my little hedge. Great progress so far and I think we may be good until 1.26. A drop back below here would be tougher to manage. I would set my stop somewhere inside today’s candle.

EUR/CAD – what a dream of a take off after our ID setup! Now attempting to pass an already expired NLBL – which should make it easier.  Again, expiring a NLBL after five days is an arbitrary rule, thus I still expect it to impose some degree of resistance.

AUD/USD – we are officially long but this one has not excelled higher like it’s EUR cousins. Good entry though and no reason to over think this – set your stop and forget about it until stop out or target.

Honorable Mention:

The Mole indicator (part of the Zero chart) nailed the high today. There was a reversal signal which would have been a decent scalp but gravity set back in quickly. Having seen similar entries in the past I now believe that entries taken after a series of arrows (like here on the top) may allow us to switch from scalping to swing trading. Any thoughts?

Yes, that is how we roll here at Evil Speculator. You can either chase Phantom of the NYSE tape or you can focus on banking coin. Your choice.

Cheers,