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Crossing The Chasm
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Crossing The Chasm

by The MoleFebruary 1, 2016

Equities are soon facing a veritable chasm on our volume profile chart, one which spans roughly between ES 1940 and 1980 – 40 handles of non-participation where pretty much anything can happen. At the current velocity I have some doubts as to whether we’ll even make it half way through there but I don’t want to be too hasty with making an assessment as we’re slowly dropping out of a high volatility range and may be seeing more trending tape later this week.

2016-02-01_volume_hole

So patience is definitely a virtue here and if nothing else don’t even think about short positions until we at least scrape the 1950 mark or so. IF we crawl toward 1960 and participation is still looking iffy then I may start looking for short positions. But that’s mostly academic right now as we’ve still got at least another 40 handles to go until that becomes a consideration.

2016-02-01_AUDUSD

The AUD/USD looks like a possible long play here and I’m currently long with a stop trailing at -0.3R. If we get another kiss of the 100-hour SMA then you may follow my bad example here, but if you do put your stop below 0.704.

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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