Setup Of The Month

Face it – summer is coming and instead of a maintaining a lean diet and hitting the gym you’ve been gorging yourself with a high carb equities diet. It may be time to slim it down a little, big boy, as this tape may be getting ahead of itself – at least that’s what we’re seeing on a short term basis:

Here’s the SPX/VIX ratio against the spoos – note how the ratio has been running sideways all day. We started to see a suspicious drop yesterday and and it’s not following price since then. What has been following is the VIX itself and that suggests market makers are getting a wee bit nervous up here.

The spoos are now pushing outside both Bollingers and it’s possible that this’ll be a good excuse to pull it back in for a day or two. Medium to long term this doesn’t mean much – if you need convincing then please check out the daily NQ and you’ll see why. She can run outside the BBs for quite a while – in itself that is not a reversal signal, especially when the Bollingers are rising with price.

Remember when we got long AAPL when everyone else was throwing it in the circular file? Well it’s time to take profits as it’s pushing into its 100-day SMA plus its 25-week SMA. Let’s see what happens next – a continuation higher can not be ruled out but I think there will be a bit of blood here now. Enjoy and have a milk-shake!

Okay, I can’t believe I’m throwing this one out for free but here we go. IF you paid attention this morning (see the previous comment section) then you already know that we’ve got a kick butt setup on the EUR/USD – in fact I would call this the setup of the month. Why you ask? Well, first up it’s breaching its 100-day SMA right now. Second it just cleared the long trigger of a double inside day setup. The 25-day is rising and will catch up on the inexorable retest. PLUS…

… there is this: IF the Euro can push above its 100-week SMA I expect things to get ugly on the Dollar side. I have had hopes that this setup would resolve the other way (you all know why) but the tape is the tape and if it pushes above 1.3205 I expect a strong push higher. This is the setup I have been waiting for and I strongly suggest you keep it close – not one to be missed.

But we’re just getting warmed up – please step into my trading lair:

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Cheers,