FLAT AS A BOARD
After exiting the dx, euro and meal trades the other day I am flat. I do not have a single trade on in futures or equities right now. The above is one I contemplated doing and did not due to it being the strongest metal. I always want to sell the weak and buy the strong, and there is no doubt that Copper has been the strongest metal. At this point today, Silver has taken over that position. This is an example of one of these trap type of patterns, where you got a new high, then an instant reversal. I like these because they trap the breakout players. Once it becomes clear the move was a fake they head for the exits in droves. What is also very interesting about this is that this metal is the one that has historically tracked the stock market the most closely.
I know I know, I keep talking about stock market problems and the market closes higher every single hourly bar basically. This is just another example of the underpinnings of what normally gives you indications on stock price direction, that has not as of yet been accurate. We can add to this VIX readings, severe bond market divergences, % move off lows over a period of time, et all. There are just so many things about this current market that say we should reverse here that as a long time trader, it is very hard for me to ignore them. As I have said, there is not a sell signal here, but there are alot of reasons to look for one. This Copper chart is just another chink in the armor. Let's face it, this is the highest staked hand of Liar's poker in history, so it is not an easy play. If our stock market were to roll over the whole world rolls over with it, this includes economies not just stock markets, and the central bankers around the globe are well aware of this and are doing everything they can to make sure it does not happen. This is why we have not corrected thus far.
It does appear to me that tomorrow could be another opportunity to get long the Dollar and short the Euro if we hold where we are this morning in those two markets. My read on my indicators that I used to exit those trades that I mentioned in here was accurate, I saved myself from giving back some decent money in those two trades fortunately. Calls like that are not always prudent, it was somewhat of an odd one as I explained. However, at some point you just have to take into account what is happening whether you agree or think it should be or not. You just have to go with some things. The FED is manipulating the indexes, so deal with it. If you have a trade that is correlated as highly with the SP 500 as the DX is, and it is reliant upon a decline in the SP 500, you better darn sure be ready to hit the eject button quickly.
We have a little unconventional setup I have recently found developing in the DX now that could make for a powerful long if today's high goes tomorrow. It may not, and we may slide too far today for the setup to still be intact, so we just have to wait. I mentioned I was looking at shorting the interest rate markets, those orders were not filled. We have been too strong the last few days there. We are approaching a key momentum level in my way of looking at things ( indicated on the chart below ).
If price were to remain weak and we were to exceed these momentum levels, that might be a setup for a short entry. It is too soon to tell yet, but this is something I am watching carefully. Other than that, I am flat and waiting patiently for a few things to come around here.
Good Trading to everyone