Long Way To Go

This morning I conveyed that the true measure of assessing a the potential for continuation lower is not in the vehemence of first drop lower but in what happens afterward. Follow up days are hugely important, especially near inflection points that are the gateways to a potential trend change. However it’s not as easy one may think – for instance here’s a snapshot on today’s Zero panel which shows us almost non existent participation:

This can mean that we are seeing an obligatory dead cat bounce but it could also mean that there is no further selling interest. In order to make a better evaluation I usually wait for the end of the session. In 80% of the cases you will see a participation spike near the EOD – either to the up or downside. Wait for that and don’t let your book do the thinking for you. Yes, we got an almost perfect entry near 2103 but that doesn’t mean we’re heading lower.

If you look at the weekly panel on the right side you’ll see that we bounced a handle or so above a weekly NLSL. And even if we slice through that one we have another one at 2036, then there’s the 25-day SMA near 2026, and let’s not forget the 100-day SMA at 2034. Quite a cluster of support and given the mojo I’m seeing today I think it would take a miracle to bust through all that. Which doesn’t mean I’ll cut my short positions – an entry is an entry and my stop is at beak/even – done.

Alright, as I’m heading to Los Angeles very early on Wednesday morning I am not taking on any new positions. So let’s review this morning’s entries as they seem to be proceeding quite nicely:

ZF is the laggard but keeps accumulating Net-Lines below, so this one looks like it has a chance of heading higher.

ZL – got stopped out here and flipped for a short. So far so good but we are heading for pretty strong support near 31.1 – which may actually be a good long opportunity and I’ll cut this one there unless it’s picking up steam. Downside momentum will be the decider here.

CAD/JPY – great entry this morning and it’s heading higher – stop now at break/even. Definitely love the context on the daily, which is why I took it in the first place.

CHF/JPY – also a great entry and it’s good to go. Stop now at break even.

GBP/CAD – at the danger of sounding repetitive but another great entry and I think it has decent odds to resolve higher. Love the pattern on the daily.

GBP/NZD – yup, same as the other three 😉 LOVE that potential NLBL breach on the daily. Run Forest run!

GBP/USD – I’ve been waiting for this one – long here with a stop below 1.51.

Gold – not feeling it really – it’s moving in my direction (i.e. short) but there’s strong weekly support looming nearby and given the lackluster tape I’ll probably cut this one unless it picks up steam by the close.

And that’s all I got for today – plenty of packing left to do! In case you wonder – I’ll be posting tomorrow again and on the 11th Scott has volunteered to keep you guys ahead of the tape. And I’ll pick it up from there again starting Wednesday afternoon.

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,