Friday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

On the equities side we’ve been accumulating more and more context and it has now become apparent that the 100-hour SMA on the E-Mini has been respected in the past three sessions and is now acting as a barrier to the upside. On the daily panel we are seeing lower highs and lower lows. Obviously there is little appetite out there for being short which is why I am keeping my current positions in place with a firm (bid) stop at ES 1968.5.

The SPX is a mixed picture – yes, it’s been able to recover the quick spike to the downside but it’s still being lead lower by its own 25-day SMA. And that one is about to meet up with the 100-day SMA sometime today – which means I expect to see resolution of this situation either today or Monday at the latest.

GBP/JPY still pointing lower but thus far equities continue to resist gravity. Obviously we all have seen this play out over and over again over the past few years. We should be keenly aware of the fact that we are trading against the overall trend and the only reason we wagered into short positions in the first place is due the grace of an early entry courtesy of an hourly configuration across three major futures contracts (i.e. ES, NQ, and YM). Despite the bearish tape of the past few days however no significant bearish inflection point has been breached. Which is why I now expect a 65% chance that my short positions will be stopped out. However, due to the thin participation we have seen (holiday tape) any downside could trigger a cascade thus this remains to be low probability / high return campaign.

We have quite a few juicy setups this morning, starting with silver – here we actually have two nice entry opportunities. I would prefer the long side and with a bit of mojo that NLBL at 21.545 may just be breached. Bear in mind that we may see a fake breach first – it wouldn’t be unusual. It may be best to put 1/2R into this first and add another after 21.6 or 21.4.

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Today’s event schedule:

And here’s the spike controller for you Forex traders:

You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

Cheers,