Coiled Up And Ready To Strike

I know we’re talking summer tape here but the level of inactivity over the past few days has been a bit concerning. Equities continue to hover above a crucial inflection point and it wouldn’t take much downside to launch a wild ass covering session. The more time passes the more this thing is coiling up and accordingly the more violent I expect the resolving phase.

My ES campaign remains almost unchanged as it’s currently scraping a very modest 0.4R. It’s Friday and I’m not too excited about holding a position over the weekend, especially given all the craziness we’ve been bombarded with in the U.S. as well as over here in Europe the past year. So final judgment will be rendered EOS today – if it can produce a bit more distance and pushes toward 1.0R then I may hold over the weekend. But if it drops back near my entry or below then I’ll have to pull the plug.

Frankly I hate having to mess with my system this way but the events of the past few months have left me pretty rattled and I am neither expecting the political nor the economic situation to improve anytime soon. Event/tail risk is a factor that must feed into our system trading. Obviously if you know anything about Nassim Taleb’s work then you understand that events do not happen when we expect them – as a matter of fact they usually occur when we least expect them.

If you’re a premium subscriber here, and I hope you are, then you may have jumped on the EUR/AUD last Wednesday. Once again there’s not much to add or to do here – I would continue to hold this position as is.

While we’re talking Euros – the EUR/CAD just dropped like a rock and then bounced back. I couldn’t resist and snagged myself a small long position with a stop underneath that spike low. Which incidentally almost exactly snagged our 100-hour SMA. Love that one – let’s see if it reverses higher.

Words to the wise: The EUR/CAD is like that hot girl with the sexy tats who you keep seeing date those bad boys. Sure you’d love to take her for a spin but you better be up for the action

Wrapping up the week with the AUD/USD. I am NOT long here yet. Yes, at first I was tempted, given the formation on the daily. But I kept seeing it drop and then decided that a reversal entry would be safer. Which means that we need to see a spike low and preferably a breach of that hourly NLBL at .7484 first. So set your clocks and hope for the worst.

It’s Friday afternoon on my side of the Atlantic and I’ve got a special treat waiting for me. So I shall bid you adieu until next week. Enjoy your summer weekend!

Prost!