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Friday Conundrum
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Friday Conundrum

by The MoleMarch 13, 2015

A bit of a surprise seeing equities heading straight back down as I was expecting a more thorough bounce yesterday. Quite fortuitously I didn’t take partial profits, as I would have under normal conditions, plain reason being thatĀ I was getting set up over here and simply didn’t have the time. Right now my shorts are flashing green and it’s turning into a very profitable Friday afternoon. Moral of the story – better to be lucky than good šŸ˜‰

2015-03-13_spoos_update

So let’s take stock of where we are and where we may be heading. This is what I would call a veritable Friday conundrum. The triptychĀ E-Mini panel shows us right at a daily and weekly inflection point where we bounced yesterday. Below ES 2032 we are at risk of descending lower toward the 2k mark and then 1982 at which point we’ll be dancing to Huey Lewis and the News again.

2015-03-13_zero

The Zero is showing us real participation today (to the downside) but it’s flattening out a little there toward the end. I think we need toĀ see wait out the close for some possible late session hits. However it’s not unusual to see selling pressure abate a little if the first part of the day has been leading down.

2015-03-13_VXV_VIX

Just to be on the safe side I caught up with some of my breadth indicators. No sign of divergences on the VXV:VIX ratio.

2015-03-13_VIX_VXO

Ditto on the more short term VIX:VOX – this is where I would expect to see the first signs of attempting to trap shorts.

Bottom Line: I am going to do here right now what I would have done yesterday – takeĀ partial profits, but leaveĀ the door open for continuation lower starting Sunday night. This is how I always would proceed and after banking quite a bit more than 4R (remember I got in at 2103) Ā it is more than justified and well within my discretionary campaign rules. I won’t polluteĀ the process by attempting to predict where we head next – major inflection points are often touched just before the weekend and for a reason. There is no way knowing whether or not ‘this is it’ (only Huey knows). Let your system rules guide your actions – not your bias, wishful thinking, or various other emotions that stand in the way of banking profits.

On the setup side we do have a two juicy candidates on the futures side:

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I leave you with thisĀ – which may become our Monday theme if things play in our favor šŸ˜‰

Cheers,


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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