Steady As She Goes

In the past few weeks we have been keeping it simple/stupid by  following the trend and as usual, ignoring the news. Which served us despite the fact that many technical indicators were suggesting heavily overbought conditions (a five year low in volatility only being one of them). As the old saying goes: The market can stay irrational a lot longer than you can remain solvent. A lesson I learned (the hard way) many years ago.

At this point there’s really not much to do but to let things play out. Make no mistake – it’s not the tape that ruins most traders. It’s our egos that usually do us in. As we as human beings we seem to have a unique ability to ignore the blatantly obvious. The need to constantly question and to evaluate every single (and improbable) possibility would rank in close second place. It’s amazing how clear things often turn out to be in hindsight. But fledgling traders often have a tendency to ‘over optimize’ (a term I borrowed from hacking software) and project their own theories on reality. In many cases to their own financial demise unfortunately.

None of us is immune. I’ve been there – you have been there. If you have been trading more than a year or two and survived then you may just have what it takes to join the small percentage of people who can make a living as a trader. It’s a pretty exclusive club, mind you, no matter what anyone tells you. Most people wash out. Sometimes due to ignorance but a lot more often due to laziness and impatience. The market is a cruel mistress and you have to work hard to master her whims.

Now let’s drop the philosophy lecture and look at some charts! The spoos – not much to say right now (per the above). She’s pushing higher and I think the best policy right now is to follow the ST panel upwards. There is no other context of importance right now but price. By the way – if she decides to drop through the 25-hour SMA then look at the lower 25-hour BB for possible support. That’s been holding up earlier this week and it’s where I would expect ST buying interest to emerge if they decide to scare the children again.

Dollar – getting interesting here. I’m seeing a lot of ‘context’ if you will – see the right hand panel and I’m sure you get what I mean. All that is happening near the 100-day SMA and thus I think a big move is coming. Not sure which way but I wouldn’t rule out the upside just yet. Anyway, keep watching this one – could be good, especially if she starts a short squeeze.

Silver – another chart to keep an eye on right now. It’s heading into daily resistance (right panel) and I would look for a possible reversal near 33.

More below for my intrepid subs, some commodities, some FX, and some stock symbols!
[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.
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Exxon Mobile – I was about to pass this one then saw the diagonal resistance line it’s kissing again on the center (daily) pane. Now we also have an inside day and that gives us some good context for tomorrow.

XLU – it’s one of my favorite ETFs actually, used to trade the hell out of this one back in the days. Great context via a 100-day SMA retest plus we’re getting an inside period (day). Also watch the ST panel (left) as the 25-hour SMA seems to be providing support. Good setup with plenty of context – so use it.

DRYS, man I remember when this cat was trading over $100, now it’s around 2 bucks. If you are afraid of trading commodities or FX then ask yourself how often 95%+ drop happens in those markets – exactly right almost never.  Anyway, good context here if you don’t mind trading something under ten bucks – I usually do but may make an exception.

John Deere – poked outside the 100-day BB and now we get an inside day. That’s the way we like it.

Cabot Oil – same setup and same idea.

Unfortunately TOS FX charts are screwed up again and I about had it with them. Seriously considering switching over to NinjaTrader charts for my blogging. If they only had dual panels I would have done it a long time ago.

Anyway, CAD/JPY – approaching the 25-day SMA. Let’s see what happens there as it’s still rising.

Bonds – the 30-year contract. I’m still waiting for a breach here – we are getting a lot of context and I recommend you keep an eye on this sucker.

Natgas – inside day – you know the rules.

Coffee – inside day near the 25-day SMA. I like it, especially after a quick drop like that – a bounce upward would be my favorite scenario but I’m taking both sides.

Copper – trying to overcome its daily NLBL – I say we would simply follow the 100-hour SMA. Easiest way to gauge which way it’ll swing.

Have fun but keep it frosty!

Cheers,