Discretionary Trading
Now Reading
Your Setups Are Served, Sir!
17

Your Setups Are Served, Sir!

by The MoleMay 10, 2016

Good things come to those who wait. After a bit of downtime over the last two weeks, and focusing a bit on options and the educational front, it’s time to snap back into action. I’m seeing some very interesting formations across the board this morning, so let’s dive right in starting with equities.

2016-05-10_spoos

The spoos are in shake out mode and may retest the 100-hour today. However I think a long position right here near 2060 has a good risk/reward ratio. Should the stop runners catch up with me then I’ll be waiting again near the 2050 mark. Juicy.

2016-05-10_spoos_LT

The long term panel is looking interesting – thus far the bulls seem to be running the tape although intra-day it’s been looking ugly as hell. Which has been the theme for the past year really except for a few weeks of trending activity. But let’s just forget about indicators, momo measures, breadth, all that jazz. Just look at the price action on the monthly. Quite a bit of range there, which is distinct from anything we have seen throughout this entire bull market. I’m seeing several stick saves there and if nothing else increasing volatility.

So we have more volatility on the short term, medium term, as well as the long term. Personally I don’t think that suggests a very positive long term outlook. Sure, we may churn around up here for the rest of the year as equities appear invincible these days – until suddenly they are not. So heed my words – something will give here eventually, and when it does it will come quickly and it will be ugly. Be prepared for the worst and adjust your trading accordingly, which at minimum means smaller position sizing and wider stops.

2016-05-10_NQ

An alternative play today incidentally is the NQ which is currently clinging to it’s 100-day SMA. A failure here could actually turn pretty ugly so this seems to be a major inflection point.

2016-05-10_NQ_LT

Here the long term points toward 4300 being a key long term level. Below it we are back in bear territory, so this could be interesting. As a matter of fact what happens on the NQ may be the canary in the coal mine for equities in general. As a side note you may also keep an eye on the 18,000 mark over in the Dow futures which represents a monthly Net-Line Buy Level and thus far has been acting as resistance.

2016-05-10_AUDUSD

Actually I can’t believe I’m giving this one away for free. Absolutely brilliant LT context on AUD/USD and I’m long with a stop below the recent spike low.

However what will most likely be remembered as the best setup of this month or perhaps even this quarter has me all me wiggling in my seat. Please grab your secret decoder rings and join me in the lair:

evil_separator

It's not too late - learn how to consistently trade without worrying about the news, the clickbait, the daily drama and misinformation. If you are interested in becoming a subscriber then don't waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Please login or subscribe here to see the remainder of this post.

I think that’ll keep you guys busy for a while. Have fun but keep it frosty – most of all, don’t get over exposed and stick with proper position sizing. If in doubt make use of our forex and futures risk calculators.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

BTC: 1MwMJifeBU3YziDoLLu8S54Vg4cbnJxvpL
BCH: qqxflhnr0jcfj4nejw75klmpcsfsp68exukcr0a29e
ETH: 0x9D0824b9553346df7EFB6B76DBAd1E2763bE6Ef1
LTC: LUuoD6sDWgbqSgnpo5hceYPnTD9MAvxi6c
PayPal: https://paypal.me/evilspeculator