“When nothing seems to help, I go and look at a stonecutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow it will split in two, and I know it was not that last blow that did it, but all that had gone before.” – Jacob A. Riis
dxy
Waiting for NFP and ISM
“You cannot control what happens to you, but you can control your attitude toward what happens to you, and in that, you will be mastering change rather than allowing it to master you.” – Brian Tracy
Equities continue to catch a bid and bar any real/consequential exogenous shock, it seems that nothing will stop the relentless grind higher. In the spirit of keeping things simple, apart from RUT and DAX, the way we would look at the other indices is that we are stuck in a positive drift chop zone. As long as we hold above the 50DMA and below yearly highs and unless we get daily/weekly/monthly closes above or below this zone, it will be hard to see any real volume coming in and committing to the next sustained move.
As discussed yesterday, the DXY is the current talk of the town. The big question is are we in the process of putting in a major/pure technical reversal at this key level after clipping the 200WMA or is it just time for a healthy retracement/pause before we continue to probe lower. Naturally, despite what many pundits will try and have you believe, no-one has a crystal ball so we will just have to wait and see how we react at these key levels. However, what is clear, is that we have had very tradable conditions and that the end of the week should not only shed some clarity on the next move but also, setup the next round of trades. More on this in the webinar sessions.
Commodities currencies remain in those 100/200WMA chop zones and we would continue to focus on these tradable ranges rather than try and look too far into the future as we wait for more clarity on the FED and US data.
Note for active 50Scouts members: make sure you keep an eye on your inbox for a free pass to Friday’s daily webinar session (make sure to check your spam folder too).
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Chart Book
“It is unproductive to think that the world has been unfair to you. Every tough stretch is an opportunity.” – Charlie Munger
Here are some charts from our chart book to complement the ones we posted yesterday.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily video morning call into N.Y. with a more detailed live discussion on all the charts and ideas we highlight/review in the weekly outlook and here on the blog, you should check out our Daily Webinar Group.
Waiting for NFP
“It is better to be late, and catch the right worm, than catching the snake’s tail.” – Benjamin Lee
Highlighted in our latest weekly outlook video, the real action is probably waiting for us towards the back end of the week. As discussed, context is key and markets have a tendency to press the pain trade as far as possible, especially in low liquidity o/n times and as market participants wait for high risk events to hit the wires.
Experienced traders understand that markets tend to behave in a healthy manner the majority of the time but this does not mean that they do so all the time. Even if this latest comment may seem trivial, it is very hard to build a long-term career as a traders unless one really understands this and adapts accordingly. We’ll keep the rants for the Daily Webinar 😉
Nothing much to add from what we discussed, so we will just leave you with a selection from our chart book:
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
The Chop Zone
“An investment in knowledge always pays the best interest.” – Benjamin Franklin
We have been talking about expecting to see the VIX spike into the 13/15+ area before it manages a sub 9 daily close but little did we know that the fight would be concentrated inside the 10 to 9 range. Talk about chop and tight compression… as we have been saying, it’s just a waiting game; who is going to give up first.
On the currency front, as highlighted in recent video outlooks and charts, the focus remains around those 200WMA for most pairs with DXY giving you the best overview of the gravitation pull/pain trade currently in play.
In non 200WMA currency news, we would also start to keep an eye on this very important structural resistance on cable.
On the tech front, despite this aggressive o/n Nasdaq ramp (can’t stop won’t stop), we would still be keeping an eye on NVIDIA today and into the end of the week.
Note for active 50Scouts members: make sure you keep an eye on your inbox for a free pass to tomorrow’s daily webinar session (make sure to check your spam folder too).
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Focus on Tech
“Lucky fools do not bear the slightest suspicion that they may be lucky fools – by definition, they do not know that they belong to such a category.” – Nassim Nicholas Taleb
Following the release of the Alphabet numbers yesterday after the close, focus will be to see on how US markets will open and if we get any kind of follow-through on the initial knee-jerk selling that came through.
Latest weekly outlook video highlights where we are at and what we are focusing on into FOMC this Wednesday. Clearly, the most interesting chart dynamics that are playing out are on the DAX.
Interesting to also look at DXY on weekly and monthly time-frames to help with the bigger picture view.
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
No Limits
“If you always put limits on everything you do, physical or anything else. It will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them.” – Bruce Lee
Pretty sure that Bruce Lee wasn’t issuing a subliminal message to a future generation of central bankers but who knows… stranger things have happened.
As we discussed in our latest outlook video, today should mark the start of the real action this week or at the very least, action on decent volumes and not this low volume churn that we had anticipated.
Here are some of the charts we will be focusing on today:
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
DXY DAY
“Don’t judge each day by the harvest you reap but by the seeds you plant.” – Robert Louis Stevenson
Our main focus today will be on DXY. We have finally made it back to the November low and this is where the market will have to make a key decision, not only in terms of the longer term cycles but also from an intraweek perspective.
As a reminder, we consider the % play move done on all the charts that have made it back to our November election extremes; the reset has completed. Naturally the key stand outs remain all the equity indices.
The trend is your friend? We’ll that’s clearly what XLF is try to highlight, especially with all the recent news and new wave of announced buybacks. We are going to go for a ‘no comment’ on this but it would be naive to not keep an eye on this chat today.
In terms of the recent indices weakness, NQ is the last man standing. Eyes on techs…
We have posted 2 videos you can catch up on this week if you missed them:
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
CB Focus
“The two most powerful warriors are patience and time.” – Leo Tolstoy
