Ready For The Second Round

Seems like copper may have been using loaded gloves as I got knocked on my ass near the end of the first round last week. Micky tells me that I got heart but fight like a god-damn ape. He also keeps rambling about laying off some pet shop dame for some reason, not sure what he’s on about. The second round is starting and I’m going straight for the ribs this time.

Well what can I say we handled that first round admirably and our stop fortunately locked in a bit of profit near the current price range. Given the spasmodic spikes as of late (see hourly  on the left – first down then up) it seems that we’re going through a shake out phase before the express elevator is taking off. If you look at the daily panel on the right then you’ll see that the 100-day Bollinger is increasingly getting pinched. Which suggests resolution is just beyond the horizon, especially for a busy bee contract like copper.

Given the current formations and the new spike low on the hourly panel I have decided to jump back into the fray with a long position. If you do the same then entries are permissible until about 2.64. Your and my ISL is placed below 2.6315 – the most recent hourly spike low.

Our E-Mini campaign has survived the weekend and appears to be in good shape. I am pleased to see a continuation of the current support diagonal I suggested last Thursday. By the way there are still seats on the bus if you are interested.

Silver is just ridiculous at this point and seems to have boarded the express elevator to now realistic looking target range near 53. As you may expect I am advancing my trailing stop accordingly. In terms of tape reading this is a textbook example of a spike low followed by an immediate and merciless advance to the upside.

We don’t see this type of price action very often over in equities but it is almost a daily occurrence across futures contracts. The pattern I keep seeing over and over is mind numbing sideways action followed by sudden and nasty advances, squeezing the poor suckers still holding the bag. If you enjoy mixing mean reversion with trending systems then trading the futures can be pure manna from heaven. Or life in hell if you aren’t nimble and too opinionated.

Below the fold: My favorite setup for the day on the forex side. Plus I’m sharing very important medium/long term perspectives regarding bonds. Probably not information you want to miss out on 😉

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