Monday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

Welcome back! I trust you all enjoyed your four day turkey masacre. My initial plans to take a few days off notwithstanding I somehow found myself slinging code pretty much most of it. Good stuff is in the works and you should be looking forward to a glorious 2013 – assuming of course the Mayans were wrong.

The spoos were pumped like a cheap hooker all Friday and we now find ourselves at the 100-day SMA. Which as you may recall is the  final hurdle separating us from the annually scheduled bear smackapalooza, a.k.a. the Santa Rally. What’s interesting on the daily is that Friday was an outside period and we’ll cover that a bit later today. The hourly is retesting the 25-hour SMA and I want to be long here with a stop below the SMA. IF she blows (i.e. drops below) then I would flip this sucker as the NYSE session may then turn into a post holiday leftover shakeout.

Before we get to the FX lair let me demonstrate to you why I keep calling NG the nutty gas. Those candles are nasty by any definition and I’m glad I didn’t get caught by that guillotine. Now I’m not sure what exactly is going on today but I’ll be long here if I see a pressing reason – i.e. an hourly inside candle or signs of a floor. My stop in any scenario would be below that hourly BB line. If you take this one please keep your exposure *very* limited.

Now all of the action today is on the FX front – please join me there:
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USD/CHF – right at the 25-hour SMA. I want to be long here if I see it holding above. Noobs – if I go long at an SMA then my stop is always a few pips/ticks below, preferably at an uneven number.

USD/CAD got the same memo and it seems to be creeping above already. The candles have slowed down a little which gives us an easy entry but it also may mean we’ll get whipsawed a little. Unfortunately the 25-hour SMA is still pretty steep and won’t be acting as support. Thus I will have to be disciplined with my stop. Either the setup pans out or we’ll wait for another opportunity.

In contrast the long setup on the EUR/USD is much easier to defend. You know what to do. This is my personal hedge in the face of an exchange rate that’s been costing me dearly at the ATM.

CAD/JPY – short term Maginot line touch and holding. That’s pretty much all we need to know, right?

AUD/USD looking a bit weak here at the 25-hour. Let’s see if it can bounce back above the line and we’ll talk about a long position. NOT interested in a short – too messy right now.

AUD/JPY almost mirroring the CAD/JPY – well, almost as it’s still a bit further away. I am waiting for a touch here before I jump into the fray.

Cheers,