Nice Little Bear Squeeze
Well, that was a nice little bear squeeze we got ourselves today – almost textbook I may add, featuring the early morning wipeout followed by a systematic run higher. If you paid attention to the charts I posted last week then this morning’s support zone should have come to no surprise to you:
Those two Net-Line Sell Levels (NLSLs) at the psychologically important 1300 mark proved too much to overcome, which frankly was not a big surprise to me. There is simply no confidence in the tape – one way or the other! For the entire month of January I have maybe seen one or two quick spikes beyond the Zero’s +/- 1.0 signal range. A twenty handle drop at the open usually comes with a bit more juice to the downside and lack of participation/momentum simply means that the tape can turn at any moment – and that’s exactly what we got.
If you are wearing your bear hat then please don’t get your panties in a bunch until we see a breach below 1285 – or even better 1280. Now that could open the door for a more pronounced correction, but until I see that happen let seasonality, momentum, sentiment, etc. be damned! 😉
But I really don’t care that much for equities right now – not until we get a strong move in one direction or the other. The FX side is a lot more juicy IMNSHO – very very nice setups today:
AUD/JPY – similar pattern as the spoos but there is a whole cluster of support sitting below plus we have a rising and fast encroaching 25-day SMA which should be good for some support. I would watch out for a breach of the 81 mark – if we get that plus a push above the 25-hour SMA then say hello to 81.80.
Alright the best ones below for my intrepid subs:
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There you go – tons of good setups on the FX side. Did I promise too much? Happy unbiased trading (to quote Volar).