Make or Break Wednesday

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

Equities have lost some ground overnight and we are now back at short term inflection points which may decide whether or not the ongoing correction has legs or if it soon will be replaced by yet another short squeeze. The NQ above still in a sideways Bollinger bubble and now at its 100-hour SMA. Short term I am not going to be long until that NLBL at 3,081.50 has been taken out.

Similar picture on the spoos which are now facing a dropping 100-hour and a sideways 25-hour SMA – there’s also a NLBL at 1,650 which is good into the open. The E-Mini is the only one with its 100-day SMA below it – we are approaching it at 1630.7. A drop through that and the bearish price objective on our P&F will play out.

FWIW – the bulls will have to make a stand here and today. A degradation below Tuesday’s lows will most likely lead us lower as the bulls are not enjoying any major support levels down here. Also bear in mind that the YM has continued lower (and still trades below its 100-day SMA) and that the strongest of the triplet produced an inside period yesterday:

Which is a great setup in either direction. I would go as far as to say that the NQ will probably be our best guide in regards to direction – perhaps not the best as a trade however.

Either way today should be a fun session as we’ve got a whole basket of excellent setups on our plate. So let’s get busy – here’s gold facing both SMAs and an NLBL at 1,367.5. I would be long above 1368.8 (the 25-h SMA).

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Cheers,