Krampus Is In The House

The evil Santa theme I facetiously posted yesterday appears to have been more prescient than I would have cared for. Equities literally turned on a dime and continued to dive lower all day. Suffice it to say that I’m a bit miffed as we may have missed the boat here. In retrospect this was a good spot to grab some shorts but without a bit more context and only half a session after the FOMC announcement jumping into entries seemed premature. It’s conceivable that we’ll get another bounce ahead of Christmas but I’ll be honest – that was a strong move and the situation is looking pretty dire here.

On a side note: The whole ‘evil Santa’ theme doesn’t exist in Europe and always seemed a bit strange to me. However that doesn’t mean we are lacking in the goblins and demons department. When I grew up in Austria as a young child I remember some scary encounters with Krampus, the evil sidekick of Santa, who supposedly punishes misbehaving children. Every year near the end of November the local municipalities organize impressive Krampus processions that go on for hours. If you’re smart you hide somewhere in the back as those guys get pretty rowdy (probably due to excessive Glühwein consumption).

As you may imagine this little good-for-nothing scallywag imagined himself at the top of the list and almost crapped his pants when those guys showed up. You may laugh now but imagine it’s a snowy dark night, you’re three feet tall, and you’re looking at a whole pack of them trying to scare the living daylights out of children. Only later in life did I realize why my mom insisted on taking me there every season. She does have a mean streak for sure…

Anyway – back to the tape! Right now right here there’s really nothing to do. If you were long yesterday then your trailing stop has been long touched. Down here we’re a bit in limbo as I give very little credence to the 100-hour SMA right now. The diagonal near 1980 looks like where the bulls may launch a counter defense.

The Zero signal yesterday was very strange and over the past seven years I have rarely seen a Zero Lite signal (the right panel which shows the 5-min) which fluctuated between +2 and -4 within one session. This could be indicative of distribution and explains some of my pessimism regarding another spike to the upside. Now we are days away from Christmas and if we are to close the year with a little ramp then this is the time as we are running out of participation soon. I recommend you carefully watch the Zero today and early next week.

CAD/JPY Update – Nice entry there yesterday and we’re trailing via the Net-Line Buy Levels until we get a decent spike high.

EUR/CAD is also looking positive and the trail here is via the NLSL near 1.507.

I tried to slip into some bond exposure twice last week and it seems that I finally caught the right turn. Trailing the ZN now below 126’180.

The ZF also looking very good and here we are trailing below 118’160. Heck maybe bonds will make up for the action I’m missing on the equities side right now 😉

More setups below the fold – please meet me in the lair:

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Cheers,