First The Burn Now The Churn

This morning I mentioned that our E-Mini short term panel was providing a pretty good view of what was brewing for today. Without a breach of the hourly SMAs buyers mostly remained on the sidelines. After some hefty burn we now get  more churn for the discretionary bottom fishers. The easy pickings are long gone and right now market makers are feeing off the tormented bodies of anyone trying to pick a low here.

We’re currently testing ES 1400 and I don’t expect much resolution here before the bell as it’s just so much more fun to keep everyone in suspense over the weekend. The spoos did touch the 100-day SMA today and that offered some temporary support. I have also highlighted our P&F price objective which is 1385 on the SPX – then you add current fair value of -5.10 and we get to ~1380.

Interestingly enough this lines up very nicely with weekly support as the 25-week SMA is now at 1381. So if daily support at 1400 gives way then the ES 1380 cluster (i.e. 1385 on the SPX) is where we should expect the next level of defense. On the upside I suggest you watch the 100-hour SMA – it’s where buyers continue to run into strong resistance.

Copper is also touching support and I’m looking forward to seeing attempts at painting a floor. It’s possible to be long here with a stop below the SMA but I have a feeling we won’t get off that easy, even if we bounce.

A few more setups and then let’s call it a weekend:
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USD/CAD – very nice setup right at the daily Maginot Line and a long position is warranted. The only caveat here is the falling 100-hour, which means we must decide our stop now and stick with it.

NZD/USD – breaching a NLBL plus its 25-day SMA. Which means I want to be long here with a stop below both.

Cable – could be super interesting as we have a confluence of energy levels now. There’s that obvious diagonal resistance line, the 25-day which is falling and then the NLBL which we are retesting. Quite a jumble but if we can make it above the resistance line we could be good for a push higher. If we drop back below the NLBL then the current super coil could be resolving downwards.

AUD/USD – as you recall it made it above both SMAs and is now tickling a NLBL. I’m waiting for a breach her and have no interest of being short yet (we would have to drop further).

Finally natgas which retesting its SMA plus a new NLSL. But what’s even more interesting is the LT panel:

As you can see we are right at a weekly NLSL and slightly below the 100-week SMA – plus we are touching the underbelly of its 25-month SMA. So what to do? I think a breach higher or a drop lower could both be massive. So watch the daily for support and if it doesn’t materialize then be short. Obviously we are at an important inflection point that could turn into a LT trade which could pay off big.

Have a great weekend! I’m going to spend much of it continuing my work on the NinjaTrader version of my Mole indicator. See you all bright eyed and bushy tailed on Monday morning.

Cheers,