Empty Plate Tuesday

Welcome back intrepid ratpack – I hope you all enjoyed your ill deserved three day weekend. Personally I kept myself rather busy while you guys were enjoying yourselves. First the Mole indicator has been updated – it used to keep signaling at the end of the session and I saw little edge in those signals unless you trade overnight. Second I added the NR4 indicator to my setup charts – and that should give us a bit more information near potential turning points. Speaking of which – the tape seems to be all over the place again and I saw exactly zero setups in my charting universe today – sorry guys. Doesn’t mean I’m going to be completely useless, here are a few pointers for you equities addicts:

Let’s start with the spoos – our trusted volume hole proved to be too much to handle today despite an alleged high probability trend day (my foot). What a let down! Why can’t the tape stick with the rules for once? Just kidding of course – but at least we had some smashing Mole indicator reversal signals near the top and I’m sure some of you rode the sled back down hill. I don’t think this will be the last time we’ll see a test of 1330 and it’s not uncommon for the first shift to get taken to the woodshed.

Here’s my BB combo map – whatever you want to call it. Nice to see the upper 100-hour BB line up with our volume hole. On the daily side we now have an expired NLBL – which of course is only an ‘official’ rule based on prior observation. But we all know that a breach above 1330 could easily lead to acceleration. And that makes it a great spot to get positioned.

I think this chart really paints a very interesting medium to long term picture. Please note that we just touched the 25-week SMA and snapped back. Again, just like on the daily that may be expected and we have three more sessions to close this candle, which just may be sufficient time. A failure however may put this candle into the ‘last kiss goodbye’ category and that’s something to keep in mind.

I think it’s great to be short here until we push above that 25-week SMA at 1336. Fair value is near -1.70 right now and that would get us to ~1337.7 on the SPX. The monthly is my favorite perspective however – note that we are now back above that NLSL which sits at 1316.75. If the bears are holding out for part deux of this sell off then a close of the monthly candle below that level is almost obligatory as it otherwise may serve as support – at least for June and maybe July. We could close below it in August or September as that monthly NLSL will accompany us through the summer.

The VIX is also developing an interesting formation – for some reason it seems that this support line I drew two weeks back continues to be observed. Also note that the 25-day SMA is rapidly rising and should add as additional support. The longs want to see a drop through that sometimes this week.

StrikeFirst also just pointed out this one – I used to be a big fibs aficionado and although I wouldn’t base my trades on a fib touch it’s nice when things line up across the board.

I think that should give you guys enough to work with as we are bouncing through this short post-holiday week. I think we do have a selling opportunity here until about SPX 1336 (i.e. ES 1334.25), I would flip into a more bullish stance should we close the week above that.

Cheers,