Tape À La Carte

I hope none of you rats are surprised by today’s session as it’s completely by the script I outlined since my return from the Boiler Room Of Doom. If you are a sub then you were given clear and advanced warning that we would be correcting near 1160, which is exactly what happened:

The spoos paint a very obvious picture: Early in the morning we managed to briefly breached the daily 1159.75 NLBL which managed to hold yesterday. However the next one up (which is why I keep overlapping ones around) proved too much and was good for an instant reversal. So officially we already failed 1170.75 and if we close below the current readings we will also fail 1159.75 – good enough for government work I’d say.

There is a possibility that we’ll retest the Monday lows but courtesy of that little spike higher today we’ll have a NLSL at 1106.50 tomorrow, which should be good for a bit of support should things start sliding hard. On the hourly panel we are currently at an inflection point – if we hold the 1148 mark then this could be it and we bust higher from here. If we fail today then we probably go to 1125, which happens to be near the 1128.5 NLBL, another energy cluster. Again, a failure of that would probably drive us down to tomorrow’s NLSL at 1106.50.

I want to revisit my statement above though in which I referred to that spike higher today. Think about that one for a second – that spike served two purposes: First it drew in a few bullish pigs that are now being roasted on the way down. Secondly, without that spike up we would have a NLSL at the Monday low (1068) instead of the Tuesday low (1106.50) – that’s a whopping 38.5 handles. And it did not even take a lot of upside progress to change the dynamics for next week – a few ticks would have been sufficient, but of course a much higher high lends more credence to tomorrow’s NLSL.

The point I am trying to make here is that the big boys are always two or three moves ahead of the retail crowd. They long decided what they are going to do today but the way the current session is driven has an impact on support and resistance levels a few days down the line. Think about that concept over the weekend as it may change the way you perceive the market. It’s really not as random as we think – well, in a way it is driven by a lot of emotions, yes – but there is method to all the madness. Once you peek behind the curtain it becomes rather obvious what’s going on and, most importantly, how to arrive at the most probable scenarios.

Did I just blow your mind? 😉

Anyway, I really do not have much to add today – not juicy setups I see just yet. Either you got positioned on that little (Zero unconfirmed) spike higher this morning or not. If you did then keep an eye on that channel I painted on the Zero Lite chart. Otherwise let’s wait and see as to what happens before the close today, as the 1160 mark is what separates a small from a larger correction.

Have a great weekend – I leave you with this:

Cheers,