Who Cares About Equities?
Today’s sideways session was to be expected as some consolidation is almost obligatory after a big surprise move to the upside. But we should really not be worried about equities at the current time. It’s a comparatively small market to begin with plus the few prop desks who are left trading are way too busy taking us for a ride. Which means a lot of volatility, screwy indicator readings, and thus only limited edge. If you however look beyond equities then you’ll find setups galore.
Yesterday I told you guys to look out for that 2210 NLBL on cocoa. I have an inkling it’s going to get retested again but if you got in here then set your stop and stick with the program. It’ll try to shake us out for sure – but that does not give us license to extend our risk exposure should our stop be touched. Remember if you don’t have access to futures then you still can play this setup via NIB. But be warned – it does not have a perfect correlation, especially when things get volatile. Anyway it should not matter if this thing resolves (to the upside) as expected.
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If you prefer coffee then this is your lucky day as it’s currently playing with its NLBL. To me the current candle looks like a failure and I would wait for a retest and a close above 220.5.
On the bonds side the 30-year treasuries are currently dropping through the 143.75 NLSL – that’s bearish of course. However I see some support on the hourly panel and there’s also the 25-day SMA looming right below. So I would be actually long here with a stop right below the SMA – if that one goes then we are dropping toward 140.
Almost identical setup on the 10-year treasury bond futures – play it the same way.
Now on to FX – the NZD/USD has reverted all the way back to its 0.7674 NLBL. I love these types of setups as they represent minimal risk. You can be long here with a stop just a few ticks below that NLBL. FYI – I would not be interested in a short trade here if this setup fails – the 25-day SMA looming below is way to close.
The AUD/JPY busted through its first NLBL but made a u-turn at the second one at 79.29. Now it’s back to the 100-day SMA scratching its head and waitingfor instructions. Also a good long setup IMNSHO – if the 100-day fails then things are getting messy – not necessarily bearish as there’s more support below but I would not play the downside especially during the holidays. So this is a great opportunity to be long with once again enjoying a stop just a few ticks below that SMA.