It’s been a nice quick ride higher in equities but I fear that the easy part of the journey is behind us. Several hurdles loom ahead and under normal circumstances I would be confident about overcoming them given the significant buying pressure last Friday. However over the past two months it has become clear that this is not the same market we enjoyed since March of 2016, thus at best call me cautiously optimistic.
When I spoke of hurdles ahead, this is what I was talking about. There’s a volume hole right above us now near ES 2670 until 2680, and there are two more waiting after the more crucial 2700 mark.
Buying volume was almost non-existence all through the Friday session, which quite frankly seems a bit suspicious given how dominant DVOL was in the two prior sessions. Clearly the first few hours of today’s session should be very revealing. Watch that Zero indicator – it rarely fails us.
Well for one it got me into a long position while most of participants were looking downward. So maybe now is a good time to sign up for a subscription? It costs less than a single ES handle, so you do the math.
My trail has been slightly advanced to about 1.5R. I’m a bit conflicted here to be honest – on one hand I want to give it enough room for a possible run higher. But on the other hand I’m already mentally prepared for yet another turn on the dime.
Clearly this market has already conditioned me to be more nimble. Which in turn tells me that we are most likely heading for more directional tape.
Gold look liked it was ready to rock & roll but apparently insisted on another pull back. I still think this has a decent chance to turn higher as soon as the Dollar run mellows out a little.
Which of course I don’t want to happen anytime soon, so I’m happy to wait in the bullpen. ISL remains until things start moving or I get stopped out.
Copper also being pressured by a strong dollar it seems. Here I decided to take a rare non-rule based exit as I don’t see this as a strong break out candidate at this point. Yes, I know – I’ll probably regret it 😉
You may already have forgotten about our ZB campaign which also has been treading water for the past week. My stop here remains at break/even – so nothing new to report.
The USD however has been running like gangbusters and quite frankly it’s now getting to be ridiculous with over 10R in MFE. I just keep trailing this sucker until this ride ends.
And it may not be over yet as the current formation looks like it’s getting ready for a second short squeeze. We should be so lucky!! The EUR now trades at 1.19 against the Dollar which is a bit of a relief but a far cry from what I enjoyed until early 2017.
USD/CAD was actually a little scalp campaign which is finally heading in the proper direction. My trail has been advanced to 0.5R and I intend to close this out near 1.288 or a little higher if it has legs, meaning we see long candles or a spike high like the prior ones.
AUD/USD – meh… ISL remains. Maybe more patience is required here.
Here’s a quick look at crude which is now entering trending mode right above the 70 mark. I’ve already proclaimed several weeks ago that crude may be hitting the $100 mark before the end of this year and thus far we are on track to do it by late summer.
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