Not Business As Usual

Market dynamics seem to be in the process of shifting and that suspicion was one among several reasons that lead me to suggest to not waste your time looking for a floor here. It seems that policy has served us well in the past few days and thus far there’s really not much to add. Things have to play out and when I see a possible floor pattern then I will let you guys know. If check the FX side then you’ll see that the Dollar seems to be running into resistance on several fronts. Not necessarily a reason to expect an instant reaction on the equities side however – so be careful. Also keep an eye on the VIX – it’s been pushing higher and its Bollinger bubble is now in expansion mode.

My first daily price target on the spoos is near 1280 – I have also pointed out 1300 for two reasons:

First up 1300 is a psychologically sensitive marker – people seem to like round numbers, a peculiarity of the human condition that has led us to 99 Cent stores in the U.S. I guess nobody would bother going to a One Dollar Store, would they? 😉

Also at 1300, or just below we have our next volume hole – so there are two reasons why at least a little bounce may be in the cards. Until then I’d say steady as she goes – don’t over think this, okay? The odds are high we will all miss the very floor – the best we can hope for is a good price pattern or perhaps a NLBL that offers us a technical entry.

Gold turned on a dime today and is back inside it’s Bollinger. Aren’t you glad now that I had you take profits three days ago? These things happen and usually when you least expect them. The downside here is that this candle did not allow us a good entry and I would recommend chasing it. Let’s see what happens at that nearby NLBL – if we’re lucky we may get a retest of support here.

Before we get to the setups here’s another target announcement: AUD/JPY – still seems to have a bit room to run but after those hourly candles I am out and about. That was a nice entry a few days ago – not a huge move but heck, it paid the rent 😉

Despite the crazy tape I was able to eek out a few setups for my intrepid subs – please step into my evil lair:

Crude has been shot to hell lately and is now trading far outside its 100-day 2.0 BB. I have been waiting for signs of a floor lately and today I was happy to find an inside candle setup. Suffice to say that I am only interested in a long setup here. Not that it’s impossible for the downtrend to continue – a trend trader would hold until a stop or exit signal has been hit. But my style of trading includes reversal trades at NLBLs or a price pattern like this near support.

AUD/USD – way oversold – that was quite a long squeeze. Again I have been waiting for a chance to ge long here:

And again we have an inside day candle that may just deliver – if we’re lucky. Caveat – that NLBL nearby may give us trouble and perhaps we’ll take exits there and then retake this trade if it closes above it.

Here’s a risky trade for you guys and I’m only proposing it as I am seeing ole’ bucky run into resistance/support on several fronts: A long trade right here and now with a hard stop a pip or two below today’s low. If you take it then only take out a small position – it’s an official low probability trade.

That’s all I have for today as the pickings were slim – have fun and keep it frosty!

Cheers,