Only The Paranoid Mole Survives

The bounce I expected earlier this morning finally materialized but not before grazing my new stop which I had advanced to 1840.25. Bugger! I didn’t even get to take the 25% profits yesterday as I was off the 1.2R mark by a tick or two. Well, that happens – it’s just one out of 10,000 as we say.

So you may wonder about today’s theme and I’ll explain it to you via the Zero chart shown above. As you can see the current bounce higher is not accompanied by a meaningful signal (see the flatline on the Zero Lite). This usually means that participation is rather thin and that the current push higher may be a trap. You know – just because we’re paranoid doesn’t mean they are not out to get us – believe me, they very much are. So the next question in our mind should be – how can we take advantage of this?

Fortunately today’s tape is producing what I was hoping for yesterday already – an inside day candle. Which means we now have a trigger to the up and down side. It’s a decent range which should keep us from getting whipsawed tomorrow (so goes the theory – cough cough).

Here’s the same on the NQ – it was even painting a doji as I took this snapshot – if we close this way it would support the concept of indecision. Anyway, unless we paint a big move in the next two hours the triggers are as shown on the chart. Again, if you are new here then check our cheat sheet for the rules.

Another juicy inside day candle on the AUD/CAD – it also happens to be in an Retest Variation Short configuration. I would however prefer a long breach here – trading with the trend is so much more rewarding.

More setups below the fold – please grab your decoder rings:

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Cheers,