Out Of Noise Emerges Opportunity

I think we can all agree that this has been a rough week across board. Forex has been leading the crazy train and I’m sensing quite a bit of whipsaw frustration in myself as well as fellow traders and readers. Of course that is exactly when you have to be ready to jump on entry opportunities. For out of noise often emerges opportunity.

Since the recent lows the bulls have been pumping the tape higher and we managed to rack up ten consecutive higher highs on the E-Mini S&P 500. After an obligatory shake out day we proceeded higher but hit a low volume wall near 1860.  This week we’ve seen sideways gyrations on top of the 100-hour SMA which eventually resulted in a fast drop toward the lower 100-hour lower Bollinger (which I pointed out previously).

Overnight we have bounced back higher and the onus is now on the bulls to push prices back above both short term SMAs. I am seeing a delicious inflection point near 1844 – specifically I would want to be long above it but load up on a few shorts if we approach 1842 – my stop (and reversal point) would be 1844. On the long side I would recommend a stop below 1842 minimum – even if we continue higher we’ll most likely get a last kiss goodbye.

Be careful around 10:00am EST – chairwoman (so they claim) Yellen is scheduled to deliver another speech. Although I don’t expect her to rock the boat that Bernanke kept from hitting the cliffs during his term we should always expect some wanton gyrations. Yes – you are not paranoid – they are out to get you 😉

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Cheers,