Thursday Morning Briefing

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.

Let me set the table so that everyone is on point today. The spoos are currently at an inflection point in the battle of the bulge, the latter being a huge volume hole that separates us from an accelerated sell off.

As I’m typing this around 8:00am EST the E-Mini has reached said inflection point – it’s the 25-hour SMA which finally caught up with yesterday’s red candle avalanche (sorry for the typo on the chart). I think this will be an important test – the bulls have to conquer this one followed by the 100-hr to get back in the game.

You may also keep an eye on the NQ, which is in a similar configuration but also sports an hourly NLBL that’s crossing its own 25-hour SMA. Great long entry if we breach decisively.

As a little reminder – this is how I left it yesterday. After getting a great entry near 1400 I got stopped out above 1397. Only to re-enter short with a stop above 1400 when I saw VWAP holding. Truth be told, based on what I’m seeing right now it’s quite possible I’ll be stopped out again. But this has been a low probability high payoff (i.e. lottery) trade for me from the beginning. Usually (if I wasn’t already positioned overnight) I would play the hourly SMAs on the ES or the NQ – so, if you’re not in a trade already then knock yourself out. In case you wonder, yes it’s permissible to use the 25-hr as your stop out point but it’s also possible that the gyrations kick you off the bus.

The FX side is looking pretty much in sync with what I’m seeing over in equities:
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AUD/JPY sitting right at the 25-hour – a breach drives us a big higher, if not then be short. I’m also seeing a triangle configuration here, so this ought to be interesting.

AUD/USD – not as pronounced but in similar configuration. Same game.

EUR/USD – more bearish but also at 25-hour. I love it when things come into sync.

Massive move over in cable – this is one of the reasons I’m anticipating trouble with my current short over in equities. If the Dollar gets whipped today then it could push equities back over into bullish territory (i.e. over 1400).

Gold back at the 25-hour – it’s really our theme today. As you can tell it’s alternating between slow and fast periods. We are currently in a slow period so what comes next may be fun, if you are on the right side of the candle. I use the 25-hr SMA as my guide, which is fortunately starting to flatten.

Silver actually the easier trade IMNSHO as we have a NLBL here which was just breached. I’m currently long with a stop below. Simple.

Cheers,