The Squeeze Is On

Happy Monday everyone! I am happy to report that several of the entry opportunities I posted last Friday are faring well with hopefully more ill-gotten gains beyond the horizon. On the equities side the E-Mini is getting ready to put the squeeze on whoever remains short at this point. And let me tell you right now – if you are a bear, or are still holding short, you are probably not going enjoy this post.

About 2/3 of the late January sell off has already been recaptured and in my mind the recent spike high near 2750 was the final line in the sand for the short term perspective. Every tick higher henceforth now adds additional defensive context for the longs and increasingly reduces the odds of another leg lower. At least on a short term medium term basis. Long term I have a few more thoughts below the fold.

The Zero indicator (you are a sub I hope!) showed us weak but consistently positive participation on Friday, further bolstering our long perspective.

A continued vega squeeze on the VIX has been leading the charge higher as visualized by our trusted SPX:VIX ratio – here plotted against just the SPX. At least short term everything is pointing higher.

Thus it is not surprising that I entered long the ES on a breach of 2731.25 as planned (in the subscriber section – sorry I can’t give it all away). It is now time to advance my stop to break/even.

Crude was slow going at first but now seems to be picking up the pace. I’m advancing my trail to < 62.50. The formation on the daily panel suggests continuation higher.

Gold was another juicy entry last week and I’m now advancing my stop a few ticks < break/even (I didn’t correct the comment on the chart) which is near the 100-hour SMA right now. Reason is that it’s quite possible that we’re going to see another retest of that one which is why I’m putting it < 1332.4.

My BTC campaign wasn’t as lucky and immediately proceeded to ISL after entry. There currently is a new attempt to produce a short term floor but it would be too premature to enter here. The medium term trend still supports the longs here but if they continue to be unable to drag the horse across the 11,800 mark then bad things may happen. That said – a convincing spike low with a retest would put me into another long campaign.

LTC on the other hand is holding steady and I just advanced my trail to the recent spike low. As you can see, no drama, no rumors, no excitement here – simply entries taken as we would in any other market vertical.

More entries and a few additional market perspectives below the fold:

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