I’m getting pretty giddy down in my evil lair – for we finally have some context at a critical inflection point. I’m pretty jazzed about the fact that we didn’t let ourselves be distracted/disoriented by yesterday’s little shake-out. Which may have been distribution – it still remains to be seen. Now let’s look at what really matters at this very stage:
When markets have become this overbought we simply cannot trust regular market indicators anymore. All I look at now are price patterns which define inflections points – in other words we are looking for signs of distribution, accumulation, exhaustion, etc. This used to be a bit easier back in the days and in the past few years we had to shift our sensitivity thresholds considerably toward the bullish end. In any case – here’s where we are at – a double inside day (as of this writing) on the E-Mini. We are also enjoying additional support via a NLSL at 1,537.5 – just a few handles below the ID short trigger.
Similar situation on the YM – except this time the next NLSL is a bit further away.
NYUD is suggesting that we could be looking at distribution – it’s not extreme but it’s there.
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Anyway, their SPY profile shows me a P/C ratio of about 1.25 – a bit bearish but I think it could still fly either way.
We’ve got a whole basket full of goodies today and since it’s a critical juncture I decided to make it a freebie. So no excuses leeches! Here’s the AUD/JPY which also happens to be painting an inside period/day. You know what to do.
AUD/USD doesn’t want to be left out of all the fun – another ID after some indecision – I would favor the long side here as it’s the easier direction (e.g. NLSL crossing through inside). But the context is excellent – good to go either direction.
CHF/JPY – SMA retest after inside day – if you follow the 100-hour then you could already be short with a stop above the hourly NLBL.
GBP/CHF – looking forward to a touch of the 1.423 mark at which I intent to try on some trendy shorts.
GBP/JPY – has been climbing that 100-hour like a champ. I closed my eyes, thought of England, and took out some longs.
Finally the NZD/JPY – yet another inside day. I don’t think this is a coincidence – we’re about to take off across the board. Let’s leave the guesswork to the pikers on the other side of our trades – we’ll focus instead on the clear inflection points I have presented.
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