Ramp & Camp Friday

It’s been an pretty boring week on the equities side and it’s fitting to conclude it with what we rats call a ‘ramp & camp day’. I dug around and despite best efforts saw very little worth sharing – albeit what I did find is rather interesting. As it’s Friday and you’re probably bored to tears and longing for the bell let’s run through it quickly:

I usually don’t post LT charts during the week but this one should be considered in the context of the next one below. Either way – do you really want to be short term long stocks as volatility once again descends into multi-year complacency lows? At minimum I definitely would not want to be short vega here – so if you’re selling options watch your six, compañero.

Market makers seem to agree as we’re seeing quite a spike on the VIX:VXO front – and one that is now far outside my Bollinger. At least on a very short term basis I do expect a little correction next week to shake out a few piggies.

I often post updates on successful setups and it’s only fair to point out the ones that went horribly wrong. Cable threw us for a major loop after shaking out our Wednesday ID entry. Given that we are outside the 100-day BB this caught me a bit by surprise. But heck – that’s part of the territory and you let your stop take care of business and move on. Must say that it’s back to the drawing board for this one – and although the candle is pretty bearish I would not hazard to guess where it’s heading next.

Inside Day on the USD/CHF – we had one back on Monday and if we get a long breach then I consider it confirmation of the prior one. Which means a breach below stops us out of the current trade near break even (depending how greedy your broker is).

EUR/USD – the 100-hour SMA seems to be acting like a brick wall right now. Given that we may get an inside day this could be a great entry spot – on both sides of course.

And to wrap up the week here’s the AUD/USD which has been clinging to its daily NLSL. Thus far it has been holding and I think a long position is a possibility here, in particular as the 25-day SMA may lend some needed support next week when the NLSL has expired. You can also watch that 100-hour SMA as a proverbial canary in the coal mine (yes, like in the Police song): If we keep failing it then we may descend after all. But if it holds then it’ll be a great spot to stage long positions with cheap protection below the hourly SMA.

See you all Sunday!

Cheers,