Daily Archives: January 6, 2017

Deceptively Close

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I was saying on Wednesday last week that ES, then six handles under the all time high, was deceptively close to the all time high, and that was because ES was already making heavy weather of getting through to retesting it. Nine days later ES is seven handles under the ATH at the time of writing, and has been kicking round in this area for a couple of days while we are still waiting for that retest.

The pattern setup here for delivering that retest is good, and the falling megaphone that has formed over the last few days is a likely bull flag that should deliver it soon after the break of megaphone resistance, which was tested again on the NFP numbers this morning but again wasn’t broken. A break over 2268 today would be a clear break. It would be nice to see that break today. ES Mar 60min chart:

170106 AM ES Mar 60min

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Binary Bust

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There was plenty and chatter about how amazing Bitcoin was doing lately. I even did a post about its well-formed bullish base, but my first words were “I’m not even going to try to understand the logic.” Someone actually emailed me the “logic” behind the trade (something about Chinese wanting to get the hell out of China), but in spite of all the hoo-ha, the ridiculous crypto-currency trade has poo’d all over itself, losing nearly a quarter of its value in a span of hours.

0106-bitcoin

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Angel Dust

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Many of you know that yesterday morning I had two small positions in GDX and GDXJ on the short side. They got instantly stopped out due to an explosive gold rally.

However, in the middle of the day, when gold was up nearly $19/ounce, I did a Slope Plus post called How to Handle Miners in which I stated the obvious (that the miners short was stopped out) but also the not-so-obvious, which is that I thought the big rally was countertrend and should be faded. Thus, I bought DUST, the triple-bearish-on-miners ETF.

Well, given the action so far, it looks like the gold rally is at least partly reversing, which is good. The next big question is how it handles that gap (green tint). Does it fill it and strengthen or does it slip below and resume its bearish ways?

0106-gc