Great Place For Entries

A new spike low has formed in the E-Mini overnight with its primary low at the 2618 mark, which incidentally managed to almost exactly swipe my trail and ended my long campaign at a respectable 2.2R. Nothing to write home about but just fine for a move that may end up being a medium term counter rally within a long term downtrend. Now while many of you passionate bears may curse at this ‘dead cat bounce’ I am making the case that it’s actually a very positive development from a trading perspective.

Now here’s my stop out which perfectly nailed my trailing trail. Well played! And I’m not too broken up about it as I am now free to consider a new course of action.

Which most likely to everyone’s horror is ANOTHER LONG ENTRY! Yes I can already hear you guys call me a bulltard, but let me explain. From a technical perspective this is pure manna from heaven as we are being served a Retest Variation Long on the short term panel and a Retest Variation Short on the long term panel.

I know – shouldn’t it be the other way around? 😉

A breach below that spike low would be a technical indication of continuation lower. If you’re not short already then this is also a good spot for jumping in. Pick your own stop but keep it tight.

My brand spanking new SQN indicator suggests that this counter push either takes off right here or is destined to die in its cradle. Meanwhile what I find interesting (and a bit puzzling) is that realized volatility (RV) has been steadily dropping with only a slight expansion yesterday. This slightly plays into the hands of the bulls.

Nevertheless, given the general context of what I posted yesterday the long campaign has very low odds of succeeding but at the same time offers a low risk to benefit ratio. Or a high benefit to risk ratio if that makes more sense. Suffice to say that my position size is small here given the low chance of success.

If/once stopped out I would immediately flip for a short position as we would now have a failed RTV-L on the map that suggests we once again head lower. MUCH lower.

I’m taking a similar approach on the EUR/USD which is back in bounce territory given the pretty solid looking rising diagonal support line it has produced since last November. Plus the 1.13 mark has been my new nemesis repeatedly smashing any hopes of seeing the EUR/USD back below the 1.10 mark, let alone near par.

FWIW – they got it all wrong in the first place. It should be called the USD/EUR as I don’t see a convincing reason to use socialist Eurochode monopoly fiat as a base currency.  What’s next VEF/USD? Oh wait – they did that one too….

I am not amused.

While we’re talking about currencies more the more aptly constructed USD/JPY has been a trooper and my trail now is advancing to a juicy 0.3R. Yes yes, I know – someone alert the media….

A pop > 110 is necessary or this puppy ain’t going nowhere. My consolation is that most likely nobody in their right mind is daring to go long here. Which is usually where I come in.