Houston, We Have Lift Off!

I just love it when an evil scheme works out as anticipated. At the end of week 48 I suggested a short term shake out was on the horizon due to blatant monkey business on the volatility side plus historical precedence for week 49. And like clockwork this is exactly what we got. Last Friday I surmised that the ongoing honeypot period was about to come to an end and that the bulls were about to do what they always do so well in the final three weeks of the year: stick it to the bears!

And there you have it. The E-Mini has now sliced through a volume hole that has been its nemesis for over two months. We may see a bit of a retest here tomorrow but as long as that diagonal support line stays intact we should be heading for 1440.

Here’s are the daily and weekly Net-Line panels – as you can see we busted a daily NLBL today and are in the process of attacking a weekly as well. If the E-Mini can hold the weekly until Friday we should be set for an EOY spike higher.

That 1440~ range is where the VIX should also touch base with that diagonal support line it’s been building since early fall. I am not certain what will happen there – I think a little shake out to scare off weak hands is probably the most likely scenario. But if we punch higher toward the end of December then we may indeed see the VIX below the 15 mark again. Wouldn’t that be nice… as you know I love to sell complacency, but that’s a different story. If you don’t know what I’m talking about then I suggest you catch up on my long term update last Sunday.

The Nursery:

INTC – nice entry there last week and we’re off to the races. I would do nothing here right now – if this really is the rocket then we must let her fly until we dispose of the third stage.

AUD/USD – finally! Took a bit of doing but we got a nice entry which should take us into 1.059ish.

Cable – we had to wait another day to finally get that 25-hour SMA entry. But it was well worth the patience as it’s time to take short term profits. However, it may also trigger a daily NLBL today so it’s possible this runs much higher – thus I suggest you keep a few lottery tickets in the running. Expect a bit of turbulence ahead however as the hourly is suggesting resistance.

Bonus Chart:

Here’s a little bonus chart for the leeches. I’m seeing a possible retest variation sell on NLFX. Put your stop above the 89.78 high and grab a few lottery ticket puts. By the way that NLBL below will expire today, thus aiding the downside cause. Again, this is a very speculative setup – only take on a tiny position size.

More goodies below for my intrepid subs:
[amprotect=nonmember] More charts and non-biased commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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Let’s start with the currencies. USD/CHF – long with a stop below 0.9315. Again a speculative position on a short term basis. Depending on what happens this may turn into something longer. But for now it’s another low odds high payout setup.

EUR/USD – now long with a stop below the 100-hour SMA. The daily NLBL we breached five days ago has been reversed – that is usually a pretty strong indication that more upside lays ahead.

EUR/CAD – I’m still waiting for a breach of the 100-hour SMA. That daily NLSL we breached five days ago expires today, so we may just squeak by.

Bonds now officially a sell as it sliced through both a daily NLSL and the 100-day SMA. If you are not yet positioned then a last kiss goodbye would be an ideal way to get some short exposure. Not sure we’ll get it but it wouldn’t be the first time 😉

Sugar may be a long if it manages to climb above the 25-hour SMA. If it drops below the currently active hourly NLBL and stays below the SMA then it’s a nice short. I don’t care either way and will grab whatever the tape throws at me.

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Cheers,