Inflection Point

The Russell futures have descended lower into the first support zone on our map. Here’s where the tape of the coming weeks will be decided – meaning whether we bounce and continue on our merry way higher or if we are to see a meaningful correction. The implications of a breach here would be serious in particular given the price objective on our SPX point and figure chart.

As you can see the daily is already touching its 100-day SMA and we are but a few ticks away from visiting our weekly NLSL (closely followed by the 25-week SMA). The latter has been acting as support for months now and quite obviously the bulls do not want to give that one up. Otherwise I do not have much to add on the equities front – as I said this morning, the onus is now on the bears to initiate a medium term trend change. If it was Monday or Tuesday I may consider a speculative long position here – and as you recall I was still short:

My open campaign did already reach its 1R point today and per the rules I will close out EOD unless we drop below 1143.5 again. I am tempted to change campaign management to a more trending approach but the odds of continuation lower here are limited right now plus the weekend is at our doorsteps.

Our Zero indicator also doesn’t show us anything worth writing home about. Almost a complete flatline, so participation down here is practically inexistent.

Bonds – the subs and I went long the bonds this morning. The ZN got shaken out but the ZB stuck just nicely. I’m actually going to hold this one given the daily context:

That was a nice and surprising breach and I think I’m going to play this via my trending campaign management, meaning I will advance my stop to every following spike low. Let’s see where she takes us.

GBP/CHF – knocking on upside resistance and I would be very interested in a long breach here – trigger on the chart. The weekly context is rather interesting given the entangled 100/25-week SMAs. If we push above today’s highs then we should be good until that weekly NLBL.

Have fun but keep it frosty!

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Cheers,