Let’s Not Overstay Our Welcome

I’m starting to be cautious here – let’s be smart and not overstay our welcome. Although my P&F target on the SPX is near 1390 I’m seeing possible support on the equity side and an intermediate ceiling on the greenback. Let’s review:

We are below the ole’ volume hole and that’s bearish. A push up higher will require some energy and it’s not as procedural as we have seen in the past. HOWEVER, I’m also seeing sort of an expanding triangle formation right now and if we pop today or tomorrow then that could actually turn out to be medium term bullish, potentially lifting us to new highs. So what happens this week and into the election should follow us into late December. Obviously a drop much further below discards that possibility.

On the NQ side things are looking a bit more bearish as we are below the 100-day and it seems to be holding. What’s working in the bull’s favor (still) is that the Maginot line is pointing upward, so we have a rising resistance line here.

Unless we ramp higher massively at the EOD the VIX is probably going to paint a first leg into a VIX buy signal today. Noobs – that’s relative to equities, so don’t get confused (please check the cheat sheet).

I know, mexed missages, right? So let’s check out ole’ bucky which is currently bumping against resistance. In the past we haven’t even gotten near, so this is definitely a positive. But I think it’ll take a bit of doing get us higher here, I’d be more comfortable to see a swing higher followed by a successful retest.

Let’s swing by the nursery: Sugar gave us a last kiss goodbye last week and thus far it’s holding up nicely. So far so good 🙂

Copper – another LKGB and it’s proven to be pretty profitable. I think I’m starting to scale out a little here but it’s permissible to keep a few lottery tickets at hand for a push into our target zone near 3.52.

USD/CAD – not yet a setup but I wanted to put it on your map. If you are long from two weeks ago then you probably want to scale out.

Setups, we do have setups – please step into my lair:
[amprotect=nonmember] More charts and non-biased commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
[/amprotect] [amprotect=1,13,9,12,5]

Corn – as you recall it screwed me sideways on the ST side today but I may just be enacting my revenge shortly. Just kidding of course – we keep emotions out of this game – that’s a sure killer. However, there may be a good setup here. As you can see it’s already aiming at the hourly NLBL and then there’s the 100-day and the 25-day that are on a collision course. If it can push above all that (especially today) then we may have a great window to be long here – after all the 100-day is still on the rise.

Cocoa – inside day + NR4. Keep it simple stupid and don’t overthink it. If you don’t know the rules please consult the cheat sheet.

USD/CHF – nice push higher here. But let’s get above the 25-day SMA and we can talk about a long setup – until that happens I’m short. Frankly, I’m hoping for a stop out as the long potential looks a lot juicier. But until it happens I’m short (but we are close as I’m typing this).

EUR/USD – my old nemesis which torments me during every visit at the ATM. My Christmas present would be to see it crash and burn right here at the 25-day but those are thoughts of wishful thinking and I must be long (yuk) until we see a bonafide breach and even better a failed retest. We’re not even close yet.

EUR/AUD – looking strong. One of those, be long at the 25-day and forget about it trades. I would however like to see that 100-hour start to point up here soon.

CAD/JPY – sitting on possible support here and the 25-day is meeting up to join the fun. We could have a basi for a launch higher. Let’s see if we get it. Watch the 100-hor for early hints – admittedly it’s been less than impressed by its existence lately. Sorry, when it doubt be long near support, right now we are a bit in limbo but it may be a good medium term position.

AUD/USD – possible support here at the NLSL – the 100-day was breached earlier today. This is probably where she either holds or fails – two more active days at the NLSL. Otherwise there’s just air below.

Bottom Line: Don’t get over exposed down here, we had great entries lately and it’s been pretty busy all around. Let’s not forget that we had quite a spike in volatility in the past week and that’s probably too delectable for the MM’s to pass up. Time to slow down a little and see where things are heading next. As the Navy Seal’s motto goes – the only easy day was yesterday 😉

Cheers,