Happy Birthday To Me!

Yes, that’s right – today is the three year anniversary of my very first post – how time flies!

It’s been quite a roller coaster with (literally) some ups and downs. But most importantly we all collaborated and learned a lot on the way. The market evolved – and so did the rowdy crew here which we came to call the stainless steel rats. Most importantly – we not only survived but prospered in what must be some of the most difficult and challenging tape of the past few decades. And for that we all should be very proud and more importantly – very grateful. Many thanks to everyone here who has been supporting the blog along the way – spiritually, intellectually, and of course financially. Trading wouldn’t be the same without you guys 🙂

Since it’s our birthday and all I have decided to make this post a freebie – let’s get started:

The tape is running away from me and I already had to revise the SPX chart as we pushed into positive territory for the day. The odds for a 9th day lower would have been 0.19% – but as we are now green for the day as I’m typing this the odds for an eight consecutive day down would have been 0.31%. Plus we are outside both of my daily Bollinger – a lot further any of us would have thought we would plunge. But here we are and if you are still holding short – congrats – but it’s time to close those positions.

My RSI_EMA chart has been rather prescient when it comes to calling the swings. And it’s now telling me that a snapback is most definitely on the table.

The daily Zero had been calling fowl on the recent push higher and now it’s suggesting that we are at a long term support line (on the smoothed panel in the center). Of course this is again a long term indicator and if we happen to close lower today it would not change the fact that we are quite extended to the downside here.

After a relentless multi-day drop the spoos (i.e. S&P E-Mini futures) look rather hopeless on the daily net-lines buy side – the right hand panel. But the hourly is giving us a cluster of net-lines between 1256 and 1258. If you new here you probably don’t know that we have followed net-lines for a few months now and that I most recently decided to code the rules into an indicator as shown above. When playing with the settings I discovered that instead of expiring old net-lines keeping overlapping valid buy-lines on the map was actually rather helpful. Today’s hourly panel shows what I mean – whenever I see a push above a cluster of valid buy lines I definitely take note as I believe that this increases the validity of the push higher (and of course the same applies to net-lines sell signals and the downside).

Similar picture again on the AUD/JPY – we definitely need to a floor pattern here or we may just continue sliding down those lower Bollinger bands.

Quite some insane continuation move on the 20-year treasuries. We must be outside the 4th standard deviation at this point – which shows us how much fear and confusion there currently is in the market. And as the old saying goes – when there’s blood in the street, buy property.

As expected the gold bugs are pounding their chest. Last week I suggested that we may see a continued push higher and that I wasn’t comfortable being short gold unless we’d push outside that 25-day Bollinger. I’m glad I listened to my own advice as this was a nasty short squeeze. I have no idea how much more mojo gold has to offer but I’m not touching it unless I see at least an inside candle. That push outside the BB seems to evade us for now as those BBs are climbing rather steeply. So we need to see them flatten out a bit first – perhaps we’ll see a brief drop followed by another candle higher – hopefully this time outside both Bollingers. Anyway, be careful trying to short this thing – wait for the right moment, like an inside candle, a variation sell signal, etc. – that doji (if it remains) would be a good start.

Crude is pushing toward our second target around the 90 mark. If you took this short trade at the net-lines sell level then I suggest you start taking profits. That was one juicy trade – congrats if you took it.

Cheers,

Mole