Gremlins

I love times like this. Everyone is running around with their hair and fire screaming about death and destructions. And plenty of blame to go around when things suddenly find a bid. Unfair market manipulations, insider trading, the Fed’s casino, you name it. But only a few selected people know the secret of what has been moving the markets in the past few years. And I’m about to share the truth with you. I hope you are ready to embrace the truth: It’s the Gremlins!

I kid you not – it should be rather clear at this point that Gremlins are loose at the Federal Reserve and most definitely at the ECB. Don’t they know about not feeding them after midnight? But alas my letters to various authorities have been ignored. And we all have to live with the consequences now.

Alright, let’s get serious for a moment or two. Some of you guys (names omitted to protect the guilty) are sending me long emails about why the news matter and how headlines move the market. Please don’t send me those – most likely I’ll just respond with one single sentence:

The news do not matter. Period.

First what you are reading has already happened and thus has no bearing on what the tape is doing. Secondly, what everyone knows is not worth knowing. Thirdly – trading the news is like driving on a freeway whilst looking in the rearview mirror. Most likely you’re going to crash. If you want proof then let me assure you that I rarely even look at financial (or even common) news reports and you all know my trading record by now – it’s all in the open. Any more questions?

Our low probably but low risk crude trade is treating us rather fairly. That’s what we want to see and there’s nothing for you to do right now.

Our DX trade is also pushing in the right direction. If you’re already in this one – good for you! If not then have no fear because you just have been given a 2nd chance:

Inside day – which is really beautiful as a breach below would be confirmation of our previous higher risk trade. Of course if it resolves to the upside you have just been given a chance to exit with a small profit. How do you like them apples? 😉

USD/CAD – yes, I’m all over the place again today – but we’ve got a lot in the running right now and this one was one sweet entry I hope you did not miss. Nothing for you to do right now but wait for target. Again, set your stop above 1.0075.

Gold – told you to get out yesterday – and I hope you did. I have a nice setup here – sorry, for sub’s eyes only. And there’s a LOT more where that came from – please step into my lair:

Well, if you have been a sub here for a while you probably already saw it. Inside day – and right at support – of course we would love to see this thing resolve to the upside. I am less interested in a short trade but it’s permissible as there’s still room until 1570.

Silver is in an identical position so maybe you can split your contracts between those two.

Another setup on cotton like we had on crude – again, a low probability but low risk entry. Of course if you’re conservative you can always wait for a floor pattern – it all depends on your trading style.

Natgas – I saw at least one of you head for the hills but I would give it a bit more time. We are very near that 100-day and a little shake out of the weak hands is to be expected. See my hourly panel for some possible support – I think that’s where I am going to place my stop and then let things unfold as they will.

Corn – I’m long with a stop below 588. Again, it’s a low probability but low risk trade. Careful – these are long candles and we are talking commodities – trades like these are not for the faint hearted. If you want to play along I recommend you keep your exposure to 1/2N max.

Wheat – similar setup – I’m long with a stop below 595. Same suggestion as for corn – keep it T-I-N-Y.

30-year treasury bond futures – nice reversal here and I am long with a stop just below that NLSL. What I’m hoping for is to play this two ways – a bounce here followed by a Retest Variation Buy setup.

Identical setup on the 10-year contract – so again it’s permissible to divide your exposure.

EUR/USD – inside day! You know what to do by now – if not please consult the cheat sheet.

I told you guys to get out – and I hope you did. What I forgot to tell you was a possible long entry here – sorry guys. Perhaps we’ll get a retest of the support line.

FYI – I flipped my CAD/JPY trade to a long as we pushed back above the Maginot line (i.e the 100-day SMA).

EUR/JPY gave us a great ID entry just two days ago. If you missed it then you have been given a second chance!

There are your inflection points – obviously I would prefer to see this resolve downward but we all have just been given a cheap stop that would let us out with coin in our pockets.

And last but not least – another inside day – would you believe it? USD/CHF has also just breached a resistance cluster which is why I would very much like to see this resolve to the upside.

I don’t have much to add to my prior musings on the equity side. Thus far support is intact and everything else is just noise – don’t let it distract you from banking the coin a stainless steel rat so rightly deserves 😉

Cheers,