This Could Drag Out

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

I looked at the zoomed out hourly E-Mini this morning and it looks like we may get stuck up here for a while. Quite a bit of sideways volatility as discussed last week and clearly the 2k mark is now being established. Whether or not we correct here is beside the point – but we are plotting a ton of context here which will either act as resistance or support later. Judging by recent history it’ll most likely be support…

Last time we blasted right through the prior sideways range as if it didn’t existed. But rest assured that it would be observed on a drop lower – so if we descent my eye would be on the 1980 range for support. Which kind of is the rub here, isn’t it? If you just look at the pat month or so it looks like there’s plenty of room for correction. But then consider the previous 1980 churn zone, the 25-day SMA at 1970, the 100-day SMA at 1940. All I can say is – good luck to the bears – they need it…

Bottom line: I would love to see a drop lower here for obvious reasons – but as it stands we may spend much of the week in here. Well, I hope I’m dead wrong on this one.

The 10-year is looking like a bounce candidate but frankly it’s a speculative entry at best. I do like the configuration on the daily – if we drop lower. Right now I’ll see if that NLSL is going to hold for an hour – if it does I’m long 1/4R with a stop below 125’040 – tiny risk. May pay off on the off chance that it runs higher.

Two more ST setups below the fold for my intrepid subs:

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They are both actually based on the same idea, so if you take them both split your R between them. That said – both are pretty speculative and I strongly recommend you don’t risk more than 1R combined. The EUR has been sold into oblivion and it’s trying to muster up some mojo for an obligatory bounce. Frankly I hope it’ll go to hell in a hand-basked (expat living in Spain) but just in case I’m going to take out a little long position here with a stop below the lower 25-hour BB.

Very same idea on the EUR/CAD – and frankly I think the odds are low. But that means IF (and only IF) this play pans out it’ll probably correct back to the 100-hour SMA. So a 4x pay off for a small risk – worth a shot.

If you’re looking for a more respectable setup – something know sharp looking chart preferably wearing wearing a tailored suit and an Armani tie… well, let’s wait a day and see if we get more lucky tomorrow 😉

Cheers,