Jul 242016
This market is nuts. Bonds and Dollar go up so the stupid market goes up. WTF! This usually doesn’t happen. On Friday the ES (S&P 500 mini) sat at the highs for hours and there wasn’t a lot of buying to “kill the bears” as I was watching the contacts getting gobbled up on the ladder. My scalping rule #1 is “low volume chop, kill the bears”, and sure enough it worked but hardly as it finally broke the upper levels as you can see on the intraday chart chop zone. Just hours of low volume chop bullshit.
Just look at the chart of bonds. How many times is this thing going to test 171? 5,6,7… I actually traded it to the short side as it went for the second test for a great trade but since then I’m scared cause you can flip a coin for the next move. I love the resemblance of a rock skipping on a pond.
COT is a bit more bullish and makes me want to puke. Producers are getting more short which is bullish. Also leveraged funds are getting more long.2016-07-22_16-43-32
A couple things I’ll be watching.
DX – US Dollar pull back off of 98.
That pull back would create a head fake on the Canadian Dollar which seems to be about to fall off a cliff.
6C – Canadian Dollar looks to be setting up for a huge move lower but if the US dollar falls hard off of 98 then this will be a nice long to hold it’s range. I’m more looking to short the 6C on a big move lower than to look for it to hold cause it’s been testing this area and it’s an inverted head-and-shoulders and a solid ADX lift on the recent move down.
GC – If gold doesn’t hold the 1315 it’s going to definitely test the 1300 and my main target will be 1260 for a nice bounce. The thing that is driving me nuts is that I longed it Wed on a huge bullish day and the technicals worked with it being “weak trending” in an “over sold” condition, but now it pulled all the way back to my entry and now it seems the ADX may become a trending market to the down side, so I got a tight stop and may possibly reverse my position to ride it down.
I’m hoping the trendline holds… But I do have a pretty tight stop here.
So with the market holding up, the bonds held, gold held, and the dollar ripping I’m thinking when the dollar pulls back, gold continues down, and bonds break down, this market will rip to all time new highs. My ES (S&P 500 mini) target is 2200 and then this thing is in major trouble after that.
Ideally I’d like to see the inverse which is gold goes up, bonds go up, dollar ranges, and the main market get’s crushed but the price action on Friday seemed that the market makers want it higher, probably to make sure every old senile grandmother type will have every last penny in the market before they crash it.  😉
HG – One more thing. Watching for major break out in copper with a cup and handle pattern and major decending trendline break. That’s somewhat bullish too.