Labor Day Trap

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

We’re about an hour away from the open of the last session before the long Labor Day weekend and equities still appear stuck in limbo, thus leaving a door wide open for both the bulls and the bears. Of course that is somewhat intentional and quite frankly I would be somewhat surprised to see a clear resolution today.

This puts us in a bit of a pickle – whatever stops may be in place may be blown to pieces over the long weekend, in particular given the prospect of yet another war. I’ve seen this very game play out several times in the past decade or so and I usually decided to stay away from exposing myself any further than I felt comfortable (i.e. minimal expecting complete loss of my position – not just my stop). Call me paranoid but anything can happen over the three days and this increasingly starts feeling like a big trap. Problem is – this time I look around and I’m not sure who the sucker is. So it just as well might be me.

On a short term basis the spoos are at a nice inflection point between the now converging 100-hour and 25-hour SMAs. Usually I’d jump into this with three feet but as stated already – I don’t expect much momo today, especially in the final few hours of this session. I think I can justify entries as indicated on the chart but I’ll take them off the table once the Zero starts going flat (and trust me – it will).

The NQ looking a bit more bullish as it’s where I would want the ES to be right now. That NLBL at 3100.25 makes for a good long trigger. If we drop below 3090 I may entertain some short exposure but would close it out at the bell.

AUD/CAD looking a bit like the equity futures – same idea here and my entry triggers are per the arrows, basically short on a clear breach of the 25-hour and long above the 100-hour. There is a diagonal support line developing, so this one is approaching its make or break point.

More short term goodies below for my intrepid subs:

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Cheers,