Sitting On The Edge

Equities are at an inflection point – yes, we are pushing into new territory but due to a shallow correction yesterday we may not be ready to start another squeeze. I’m still holding the long positions I grabbed this morning and my stop remains at 2008.5 which means I was one tick away from being touched.

The E-Mini volume profile chart shows us what we’re up against – we are heading into uncharted territory and I think a more thorough correction is needed to kick this thing higher into the Santa season. Either way, I’m still holding my longs I grabbed at 1872. My current stop is at the 2nd nearest spike low at 1960. I am considering to shed 20% if we drop through the previous one at 1995.

The hourly SPX panel shows us a very solid 25-hour SMA which however is starting to lose momentum. So the situation here is pretty clear. The bulls need to start running or face a more thorough correction, perhaps all teh way toward 1962 where we find the 100-hour SMA (see, there IS method to my madness).

The VIX is slightly elevated as you can see from the ratio I’m plotting below the SPX here. So I think market makers are expecting a correction here as well. Strangely thus far nothing has yet materialized.

Update on the GBP/JPY setup from last night – see what I meant by not having a directional bias? Who looked at that chart yesterday and would have considered a LONG entry? Perhaps 1% of all traders – that’s how many. Well we did and my recommendation is to move your stop to b/e – you are now sitting pretty. I can’t promise that this squeeze will continue but the die has been cast and now we wait. By the way GBP/USD worked fantastically for a few hours but then somehow ran back to our entry – I recommend an exit on that one.

AUD/CAD – I was whipsawed there this morning but got above 0.9905 – taking profits now which earned me a bit over 1R considering the 1/2R I lost being long first.

Crude – perfect entry here this morning and we are now uniquely positioned for continuation higher. Again, no guarantees but move your stop to break/even and then sacrifice a medium rare beef burger to appease our overlords at the firm whose name must not be spoken.

Only one measly setup this evening and I’m keeping it for my intrepid subs:

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Cheers,