Finding the Drivers for the Next Entry

Amongst a mixed risk picture today in the markets it’s tough knowing how the markets will react. Here’s what we are doing to find the clarity in the price action and what to look for:

The Nikkei (NK) is pulling back…and that’s good news for traders waiting for buy trigger off support! The sell-off low from May 17 is a good place to start watching for an entry.

Thank you Amazon for reaching 1,000…the Nasdaq (NQ) now has a glimmer of risk appetite. Our NQ buy off at 5,585 and 5,555 continue to follow through to the upside. The intraday buy triggered this morning at 5,788. Not too shabby for a low-risk five minute, chat room set up.

Although the set ups on the daily chart of gold (GC) haven’t been the cleanest, there are some levels to watch:

Watch for what I call a “mid point fatigue zone” …when there is sideways chop. In this case the upper end of that zone is near previous highs between 1,272 and 1,275. There are some alternatives to selling GC and that would be pricing August puts with a 1,262 strike. The idea though is to be short. There are many stories like gold that are decoupling from the equities market that I am willing to short. The Australian dollar (EUR/AUD or AD) is another one of them.

The market is also rallying the euro (EC) today. Traders who are eager to buy U.S. dollars be WARNED:

No one can talk a currency up or down like Mario Draghi from the European Central Bank.

Why does this matter?

1) It’s best to focus on EUR/USD or EC futures buys on pullbacks like the one we set up from 1.1125 in the EUR/USD last Friday.

2) The EUR/USD is at the early stages of an uptrend that will echo the mid-2014 U.S. Dollar Index.

By the way, I tucked this down here, just for those of you who read this whole update…

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