Too Many Damn Setups

I’m having way too much fun this morning, which accounts for my somewhat belated post. There literally seem to be juicy setups crawling out of the woodwork and I just kept adding new ones while reducing exposure on others in order to reduce correlation risk. So without further ado let’s jump right in:

Equities continue to be a pain in the ass across the board and I’m not going to devote much time here. The daily panel is pretty clear of course as we’re in the midst of a medium term correction. Initially I didn’t give that 25-day SMA much credence but it seems like it is being observed – that’s pretty bad news for the bulls.

What continues to fascinate is the volatility profile. We should be slowly dropping here but the signal has been stubbornly pushing sideways. We did see that back in September as well and what I’m looking for is for the signal to start dropping while we produce new highs. NO WAY I’m getting involved right here. Not because I don’t think that we could drop straight down from here – absolutely we could. But the potential to get chopped to pieces is simply too great and I have to wait for a situation where I see the odds shifting in my favor.

Besides, Punxsutawney Phil didn’t see his shadow which means spring is early and buying interest should emerge here shortly. Yes, I’m kidding of course – wait for the tape to cast its own shadow.

Alright, let’s get to the goods. USD/CAD – snagged a small short position here. However it’s possible that it’s establishing a base and if I get stopped out I’ll wait for a drop and retest and then go long.

EUR/USD – my old nemesis is producing a pretty nice pennant and I better head to the ATM today. That said – I’m looking for a short position as we may just do one more round trip inside that triangle.

Wheat – want to be long on a drop to around 472.5. Whether I get it is another story – she’s a mover.

Soybeans – yeah, I know – a Hail Mary entry which I probably won’t snag. But given all that volatility I thought it couldn’t hurt.

But my favorite Forex crosses are courtesy of Mr. Kuroda today and I’m keeping them for my intrepid subs. So grab your secret decoder ring and join me in the lair:

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That ought to keep you guys entertained for a while. By the way I was horrified by the participation here yesterday. Did I miss some exotic holiday or what’s going on? Back to work you lazy buggers!