The Bus Is Empty

Remember the old adage I have been drilling into your rodent skulls on numerous occasions: The bus moves fastest when it’s empty. And judging by the complete lack of participation in the comment section (at this crucial stage) I must conclude that the bus must be running pretty empty as we’re quickly descending lower. And that means things could easily accelerate as a ton of retail rats are waiting for a bounce that may not materialize.

Now for the past few weeks I have not missed one opportunity to emphasize the fact that we may be in the late throws of the current bull market and that I was expecting quite some fireworks for 2015. Didn’t expect them so quickly to be honest but here we are. Is this where equities finally fall off the plate for the first time in years? Nobody can now for sure, but as long as our crystal ball is still in the shop the best we can do is to get positioned at crucial inflection points. Which means showing up for work when things look boring – not after the fact when the big moves are well behind us.

Alright, enough bitching. See above the E-Mini volume profile chart. We are again seeing lower lows and lower highs and as long as that situation continues the odds support continuation toward about 1920. Things get extremely serious after 1965ish, which would be the final death knell for the bulls this winter.

As you can see the 100-day SMA and the NLSL at 1995.75 is currently behind us. Should we close the session below it then we’ve got a daily sell signal in the bag and obviously that’s very bad medicine for the bulls. Actually it would be great news for my NQ short position courtesy of Thor but let’s not count our chicken until they’re hatched.

Silver is the only new setup I would touch today. It’s currently bumping against the 100-day SMA and there’s also a weekly NLBL at 17.08 (with the 25-week SMA right above it). I think a breach of today’s highs would be golden, if you forgive me the pun. Due to today’s long candle range I would put my stop near 16.75.

That’s all for today – I hope to see a bit more participation here otherwise I’m afraid you guys are destined to miss out on some mighty coin this winter. Which would be a shame, n’est-ce-pas?

UPDATE Closing Bell: 

The rather forceful bounce near the lows has the words ‘possible bear trap’ written all over it. That move looked rather engineered and must have drawn in a hell of a lot of eager bears. I think the bearish case now slides to a 50% possibility (earlier today closer to 80%) and it’ll be a mere 30% if ES 2020 is retaken.

Here’s the Zero – some of you apparently played that divergence on the Zero Lite today – well done. As you can see that spike higher came literally out of nowhere which is why I attribute it to the usual suspects (i.e. institutional prop desks having a bit too much fun here). Could turn into a double bottom type of situation – again the bears need to hold 2020 and a drop before 2010 would be best.

Quickly shifting dynamics here – not for the faint of heart. Be nimble and don’t get drawn into emotional decisions. Unfortunately the NQ campaign is not at 1.2R yet which means that the ISL is still in place. Let’s see what the overnight tape brings.

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Cheers,