Monday Drive Through

I had a pretty crappy night and it feels like my brain is running in energy saver mode this morning, which somewhat thwarts my ongoing efforts to tantalize my restless steelrats with insightful market analysis and actionable charts. So I hope you can forgive me if this post is going to be a bit more spartan than what you usually have come to expect here at Evil Speculator.

Let’s set the stage first via our event schedule for the week. There are a few high volatility events scheduled for today and tomorrow but Wednesday and Thursday will be the big whoppers as both the ECB and the Fed are scheduled to issue public statements about their respective interest rate policies.

Before last week I would have not expected any big surprises given the Fed’s original plan to gradually hike through 2019 but that obviously got completely blown out of the water on the 28th, which caught a ton of salivating bears by surprise.

Plus with Paris pretty much on fire every weekend now there’s no telling what Draghi may have up his sleeve to aid Macron’s efforts to somehow appease his pesky voters. Well, at the danger of coming across a bit cruel but to quote Joseph de Maistre: “Every nation gets the government it deserves.”

My long campaign is looking pretty peach at this point and I just advanced my trail to the 2.2R mark. Looking at the daily panel it seems to me that a breach of ES 2825 significantly reduces the bears’ ability to drag the tape lower and back below the ES 2600 inflection point. I’m not saying it’s impossible given what we’ve seen over the past few weeks, but a drop lower now and here would keep the momentum on the bearish side. We shall see…

The greenback reminds me of Bill Dunn as it has been bucking like a wild bronco. My long campaign thus far has survived the gyrations, mostly due to luck and my policy to not shift my trails until after the conclusion of the session. Which by the way is a good policy in high volatility tape if you intend to ride break out moves.

The USD/CAD campaign hasn’t been this lucky and I got take out at the ISL. Looked really good in theory but I guess there simply remains too much intra-day volatility which makes trading this one a bit tricky.

I leave you with a medium to long term perspective of gold. The daily formation looks very juicy and a retest of the 1230 mark (Feb contract) would be a great long entry opportunity. In retrospect I should have probably taken a whack at this one last week when it was warming up to resolving the falling neckline on the inverted H&S. That said I usually find entering on a re-test of the neckline (should I get it) to have much higher odds.

Public Service Announcement: US cash markets will be closed on Wednesday in recognition of the funeral of President George H. W. Bush.