Back In The Thick Of It

Things are starting to look more positive as we are accumulating bullish context. As you recall the VIX triggered a bonafide buy signal (relative to equities) and thus far things are proceeding in the right direction. That of course doesn’t mean we won’t see an attempt to shake out some of the stragglers.

On our volume profile chart we are back in the thick of it – anything can happen around here and it has in recent past. But if nothing else the bears once again were unable to drag things beyond the point of no return, one which may have heralded a medium term trend change. So no cookies for the teddies and the bulls have another lease at life – at least for now.

The GBP/JPY correlation continues to provide important clues and thus far it seems to be leading higher.

Short term (left panel) we are holding the 25-hour SMA and may just breach that NLBL just below ES 1850. Not much context on the daily chart, so for now let’s stick with the hourly. As long as the 25-h is leading higher we are in squeeze mode. Won’t last forever though and various strategies for a shake out are probably already being hatched. If you are long from Monday then there’s not much for you to do – don’t over think this – hold your position and move your stop up with each 1R increment. It’s important that you let your winners run.

Thanks again to Scott for providing valuable guidance during my days off. It was short and sweet and very much to the point. That’s how I like it. Complicated charts and pages of rationalizations are for traders with too much time on their hands.

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Cheers,