Limbo Central

Make no mistake, this woodchipper of a tape is intentional and has but one single purpose: To keep you guessing, press your buttons, and lure you into overtrading – all of which easily leads to losses and psychological weakness. I’ve been glancing over the comment section and unfortunately see way too much time being spent on making sense of this furball. Don’t try to stroke your own ego – you won’t be able to figure this out – the tape always will be smarter than all of us combined. It’s almost as if some of you guys haven’t been reading my posts, so let’s try this one more time:

If you haven’t seen my weekend post on market weather pattern then now may be a good time to take a look. May I in particular recommend the part describing limbo periods? Anyway, I have said it before and I’ll say it again: Unless we breach either 1270 or 1330 there is zero edge here. Welcome to Chopfest 2012 – bring a raincoat. Since some of you seem to learn the hard way let me serve up a platter of additional evidence:

JNK:TLT seems to be in sync – no divergences means we have no additional information suggesting that credit knows anything more than equity. NEUTRAL.

Copper continues to point down. Has been a pretty good guide this far so this one ranks BEARISH.

AUD/JPY – long term. That one is pushing ahead slightly of equities. BULLISH.

Not confused enough? I hate to say it but I’ve got more – please step into my lair:

VIX is now dancing at the 20-day SMA – putting us into NEUTRAL territory.

NYSE Volume ratio – advancing vs. declining. Looks like we are pushing up  strong which would be bullish. BUT we are also right at the 3.00 mark which recently has been a reversal zone – and that’s bearish. So let’s call this one NEUTRA to be fair.

NYSE Issues ratio however is pointing up – I call this BULLISH.

And here we are looking at NYSE stocks above their 50-day SMA vs. the ones above their 200-day SMA. Bullish as it has pointed up but bearish as we are stuck at a major resistance line. Another one putting us into the NEUTRAL zone. Scotty – beam me up now!!

Bottom Line:

These are the kind of times financial bloggers hate the most. I would love to serve up  heaping platter of setups but I am not able to confidently recommend much I would put my own coin on. The exception being two small plays that may keep you busy for now:

EUR/USD – we are right at the 25-day SMA. It doesn’t matter where this puppy swings – I would take it either way. Use that 25-day SMA as your delineator and put your stop on the opposite side once we see it either reverse or breach.

Then there’s Natgas – actually not a bad setup – we all love an inside day coupled with an NR4. You know what to do – if not then please check the cheat sheet.

Cheers,