Running With The Bulls

No, I didn’t go to Pamplona to see the bulls run – yet – will have to wait until July for that. Meanwhile all that was needed for a stampede was a good ole’ fashioned VIX Buy Signal. Which by the way all my subs were briefed about yesterday afternoon before the close:

That was yesterday’s setup. The rules stipulate that we require:

1. A close outside the BB.
2. A close back inside the BB.
3. A close below the second’s candles’s close.

You simply inverse the rule for a VIX Sell signal. And as you probably guessed it the rule refers to equities and not the VIX. For more details please confer our handy cheat sheet. The result of yesterday’s signal?

If you were a sub I hope you got positioned early and pyramided your way up. However, I would like to caution everyone about overstaying your welcome. Its very much possible that we push higher from here but there is resistance on the horizon and after a big candle like today it’s best to take at least partial profits.

Exhibit A – although we are not yet at our handy volume hole there appears to be resistance at a diagonal resistance line which appears to be part of a falling diagonal. If we breach that then the bears next major line of defense is 1330.

I said ‘major’ because exhibit B (i.e. our Net-Lines chart) shows us a NLBL at 1319 – a touch of which would confirm a breach of that diagonal I pointed out above. Not a bad spot to get long if we breach. If we do not breach then I would not be tempted to go short there as the prior diagonal would most likely act as support.

Exhibit C is my RSI_EMA chart which has us back at yet another diagonal resistance line – this ought to be interesting! Again, if we breach it I think it would shift the dynamics of the game back to the longs. Until that happens the bears have a decent shot here.

And finally Exhibit D – the VIX once more. The updated chart shows us near that 25-day SMA which has been serving as support. A breach below would also coincide with resistance breaches on the prior charts, so what happens here right now seems to be important – apparently we are at an inflection point.

Exhibit D – our weekly spoos chart perspective reconfirms the 1330 resistance cluster. Which would be our next best chance to consider a short trade. Let me however point out that I am very binary about being short here – as soon as we breach higher just a few handles it is very likely that we get to first 1319 and then 1330. If we breach 1330 then the bears are going to need a lot of vaseline. This means that I will use very tight stops until 1330 and if we get above flip back into delta positive mode.

If that was a bit confusing here it is in a nutshell:

• Possible short here with a tight stop a few handles higher.
• Resistance at 1319 but I would not go short there as support will loom nearby below.
• Possible short at 1330 – assuming we get there – again a tight stop a handle or so above.
• Flip that sucker if we push beyond 1330 – back into delta positive mode.

Target Updates:

Soybeans – that was a nice inside day setup the other day and it’s time to get out and call it a trade. I may try a short if we get a retest of that NLBL, which also seems to coincide with that 25-day SMA.

EUR/AUD – three sessions ago we tried a little short at the NLBL and are now at target, too much support looming below.

AUD/JPY – another inside day entry we took a few days ago. Also at target and it’s permissible to take profits at the NLBL. But I may actually hold a few positions at the prospect of a continuation higher. Obviously what happens here at the NLBL is key – I’ll give it a day but have a stop a few pips below.

Still In The Running

Cable – clean inside day setup and it tried to fake us out. I bent the rules a bit and took the breach a day later (i.e. today). If you happened to be so lucky then there’s nothing to do for a while it seems – unless of course we get stopped out.

CAD/JPY – another inside day setup that’s making me smile today. Nothing to do here until we reach that NLBL which should serve as our target.

And of course I kept a few goodies for my intrepid subs – please step into my air conditioned lair (it’s hot here today):

EUR/JPY seems like a decent short trade here until of course we close above 99.456. So if I get stopped out I’ll strap on my helmet and flip that trade. I actually think the odds here are 50/50 for either direction so don’t get married to your position. When it comes to trading it’s best to be promiscuous – so feel free to release your inner slut 😉

AUD/JPY – the chart marks it as a good short but since I typed this we are back above which flips it into a good long trade if we close above 78.332. today

That’s all for today – I know meager pickings but heck – it’s better than a kick in the shin 😉

Cheers,