Reality Test

It’s easy to be bearish when things have just taken a turn to the downside and the blogosphere explodes with pessimistic adjectives. Leave it up to the Mole to deliver you clear inflection points allowing you to get positioned without bias. As things are moving fast I’m going to post a quick update on the spoos and keep building this page as I’m parsing through my charts:

I wanted to get this chart onto your screens as quickly as possible as the E-Mini is back at its daily inflection point, the 25-day SMA. A push below would put me back into a bearish stance – as long as she holds I may venture into a few long positions if I see signs of a reversal on the hourly panel. As I’m writing this post things are still in sell off mode.

The VIX once again popped a triple dose of viagra today – if we close near 16 we should be outside the BB. That’s quite a volatility jump in one single session and I’m once again a bit skeptical. Too much panic for too little blood in the water. However we cannot refute the fact that the bulls were unable to hold on to the lead they eked out on Friday. So at this point we cannot exclude continuation lower. Obviously things will get really ugly if we drop below Thursday’s low of 1495.

So in a nutshell: The bulls are in decent shape if we’ll push above the 25-day SMA (and lower hourly BB near 1507ish) by the end of the session. If we drop toward the low and hold it then I would still be in the 50/50 camp. However, if we make new lows today or tomorrow morning (i.e. a drop below 1495) then things may unwind and drop toward 1480.

Our dollar setups continue to bank us some mighty coin. I don’t see a reason to exit at this point and if you read my weekend update then you know where I expect some serious resistance.

Whenever there are rapid swings like this we seem to get a good number of juicy setups – please step into my lair:
[amprotect=nonmember] More charts and non-biased commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
[/amprotect] [amprotect=1,13,9,12,5,10]

USD/JPY – touch of the 25-day SMA but I don’t want to be long just yet – would be preferable to see some signs of a floor or a push above the lower 100-hour BB.

NZD/JPY – quite a bit of Yen unwinding toda and it’s also sitting right at its 25-day SMA. Great spot to be long while that lower BB on the hourly holds.

EUR/USD – sliding and I’m short right now. Tough to chase unless you’re already in it – it’s possible we get a last kiss goodbye on that SMA, so if you’re not in there then I suggest you stay out and wait for that.

AUD/NZD – testing its own 25-day SMA but I do like the inflection point on the hourly panel. Short right now as long as we remain below both hourly SMAs.

AUD/CAD – running into daily resistance….

… which is why I am excited about that inside period – here are your current triggers for tomorrow’s session.

Silver is starting to look bullish – I am out of my shorts and am long via the hourly. Those two ST SMAs are providing support right now, making it a good inflection point.

Ditto on gold – seems it’s slipping underneath some hourly NLBLs and may start pushing higher here.

Cheers,