Time To Strike The Iron

We are at an important inflection point this morning and it’s time to strike the iron as it’s hot hot hot! I’m running a bit late today so I only have time to report on equities – but it’s a very good one, so pay attention:

This is what’s working in our favor right now – the GBP/JPY is still looking divergent or at least unsupportive. Could change quickly but there are no guarantees in the trading game. So let’s look at the price action on the futures side:

This is a textbook RTV-S configuration and you can play it by the rules. My discretionary style however differs a bit from Ivan and Scott which is why I use Net-Lines as additional price inflection points. Sometimes they afford me better entries near important price congestion clusters. In this case we have a typical 1-2 pattern here (if you allow me a tiny bit of wave wanking). What comes next will of course determine where prices head next. I personally have no bone in this fight (yet), so I’m able to objectively assess all entry possibilities that the tape is affording me right now. Here we go:

• Short via the NLSL below 1948.25 – put your stop above a few ticks above yesterday’s highs (1953.25).
• Short via the regular RTV-S entry point one tick below (or at if you want) 1937.25. Your ISL will again be above 1953.25. This will result in a smaller position size as you are affording yourself a larger stop. When in doubt use our handy futures risk calculator.
• Long above the NLSL or yesterday’s highs. My stop would be below 1937.25.

Now I know what you’re thinking – those NLSL entry triggers are dangerously close to each other, and you’re right. I will have to monitor the Zero after the open (you do have a subscription right?) as to assess whether participation favors more up or downside. If you’re cheapskating it I suggest you watch the 100-hour SMA on the spoos plus the GBP/JPY correlation. In summary I’ll be all over this like a fat kid on a Mars bar – this could be a very fun campaign.

You have been briefed – now get busy!

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Cheers,