Something To Work With

I’m rather quiet today as there is really not much to be said until equities find a floor. Today’s session is a stern testament as to why calling a bottom during highly volatile periods is a very precarious and often costly endeavor.

As a public service during emotional times I however would like offer some guidance to everyone. The S&P E-Mini futures just responded rather violently to the FOMC statement but then quickly snapped back and held above our current hourly Net-Lines sell level at 1165.5. Since I started typing this we actually pushed above 1121.75 and that’s a good sign. If the spoos can paint a floor here and perhaps even push toward 1135 we may see an attempt to reach 1149, which would extremely positive. Whether or not we get there and if so can push higher remains to be seen. However today’s session at least provides us with something to hang our hats on – we now have both sell and buy levels, whereas we previously only saw buy levels at a far distance for days on end.

A word about net-lines sell levels – they are actually valuable from two perspectives. First of course according to their name NLSLs provide us with clear price points at which selling may find acceleration and thus lead us lower. A more implicit but often ignored side benefit is that they also can serve as support lines, and thus a failed breach can be considered positive and thus also give us a clear delineation for placing our stops. As we now have some movements on both the down and upside we now have the ability to better gauge our risk and position ourselves accordingly. Sometimes this is just as good as it’ll get – trade accordingly and stay frosty.

I have one more chart for the subs:
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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Overnight you want to watch not only the spoos but also the AUD/JPY for clues. I’m seeing a nice inside candle on the hourly panel right now and we are also nearing a cluster of Net-Line buy levels. Should we push above it would help establish a bit of a floor here, which is desperately needed.
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Today’s position: Long patience and short emotions.

Cheers,

Mole