Let The Games Begin
The impending G7 summit this weekend is pure manna from heaven for the giant clickbait machine more commonly referred to as the mainstream media. Turns out that Trump and Macron aren’t best buddies anymore which has kicked indignation on both sides of the political spectrum into overdrive. As usual I simply lean back and enjoy the spectacle in all its glory. While all the losers are picking sides, I’m picking entries – that’s the Evil Speculator way.
Truth be told I’m not in the best of spirits right now as life handed me a shit sandwich yesterday which I’m still in the process of digesting. Fortunately it’s Friday which will give me a few days off to lick my wounds and then return to doing dirty deeds done dirt cheap.
We’re going to mix things up today and start off with some campaign updates. The EUR/USD does not seem to respond well to Trump dissing Eurocrats which is why I’m hoping he’ll double down. Then again I’m selfish as I live in Europe on a US dime.
Fortunately the EUR made it to the 2R mark which is why I just got stopped out at the 1R mark. FWIW I don’t think this little ramp will be the end of this snap back so if you’re a EUR bull rejoice and wait for next week.
GBP/USD looks like a stop out at break/even. But similar perspectives here regarding the fat lady not having sung the grand finale on this reversal.
Surprisingly the same happening on the USD/JPY side – what is it with forex later? Anyway, my stop is still at break/even as my stop was a lot wider on this one.
I had just about enough with gold whipsawing all over the place without direction. Which is why I finally exited near break/even and decided to not even look at a precious metals chart for a month or so.
Let me spoil you guys a little since I didn’t post yesterday. The CPCE Deluxe is now pushing into final ramp territory. I am calling it that for a reason as I’m sure trigger happy bears are already itching at the trigger to start accumulating short positions.
Instead uncle Mole encourages you to consider recent history which shows that short reversals in current conditions (i.e. CPCE > 0.54) are usually late, if they happen at all. A much better idea is to wait for a dip back < the BB and then add an extra week.
SPX Breadth tells a similar story – a push > the 1.0 mark usually means the final run higher lies just ahead. And again a dip < that threshold eventually increases the probability of a market correction. Mixed odds however in the past decade as sentiment has grown to be a lot more bullish.
SKEW vs. VIX – the only fly in the ointment as it has been one of the few more reliable reversal indicators in my momo charting arsenal. Here I would also wait for a dip lower back into the Bollinger and although we are close it hasn’t happened yet.
Alright, so now that you’ve got a better sense of where we’re at, let me show you what to do about it.
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