More Dollars Into The Shredder

It’s going to be a wild Friday it seems. Retail sales and CPI data disappointed earlier this morning, causing yields and the U.S. Dollar to head straight for the basement while gold of course is heading higher. I guess gold could be trusted after all, but hindsight is always 20/20 and you never know how the numbers get shuffled. Of course the NQ is soaring as I’m typing this as bad news is good for equities – back to the old QE script I take it. Unfortunately my long term outlook on not seeing a meaningful interest hike anytime this decade seems to be playing out as feared. Or as the saying goes: Don’t try to bullshit a bullshitter 

The S&P 500 futures meanwhile are approaching low oxygen altitudes as shown on our volume profile chart. However given all that exuberance I wouldn’t be surprised if we see a ramp into new virgin territory today before the bell.

NYSE volume was remarkably low yesterday and with many participants on vacation banging the tape is even easier. Then again the bots don’t take vacations, do they? Either way if you are sitting on a winning campaign then you may want to take at least partial profits near the closing bell today. An empty bus doesn’t just move faster it also turns easier.

The VIX may drop back into single digits by the EOS which may lead to very exciting entry opportunities in the coming weeks. At minimum buying protection here is dirt cheap and as I’ve shown on various occasions, a VIX repeatedly dipping into single digits over a period of several weeks does lead to very ‘interesting’ tape further down the line. As a matter of fact I’m currently working on a pertinent strategy which exploits IV divergences.

Gold/Yen (the latter inverse) – unfortunately catching that one is almost impossible unless you accepted a significant risk and entered yesterday. At least for now it seems the gold bugs are off the hook. And not a day too soon as those lower BBs on the daily and weekly panels started to look rather foreboding [see previous post].

Fortunately it turns out that I am not completely useless as that cable entry I posted yesterday (to the subs) is off to the races. And we barely got in as I was waiting for a quick drop toward 1.292. I’m now moving my stop to break/even and suggest you do the same if you took this one. Yes, a bit above b/e is okay but we want to give this one a lot of space to run as it just breached several daily NLBLs, thus good times could be ahead as there’s nothing but air above on the daily and weekly panels.

It’s Friday and you know where to find me. Enjoy your weekend – prost!!