10/24/2015 Weekend Update

[jademann]

never?!

[gappy]

Poor open, reflects asian econ problems. Pump tonight 1 hour before London open? Then again before NY, the norm. 10 minute.

fx.PNG

Vote Cobra. glta

[BullBear52x]

GLD long term bullish, short term is still on a sell, no rush but 112 level is very attractive long term.

[Unique]

ES Weekend Update: Keep It Simple Stupid Series (Nailed the coffin shut)

Friday’s session was very similar to the previous week’s Friday Oct 16 session; they were both standard textbook bull train continuation days. What we mean by this is that the first try 1HR 8EMA and 20EMA were sticksaved by the bull train as expected during our intraday updates. It provided the classic risk 3 for 10 bounces on the 1HR 8EMA and 20EMA. For bears, they had a cute short entry with the 10AM hourly bear reversal bar to the 1HR 20EMA minimum target which we covered ¼ of the day trade shorts at 2057.00, which was just a tick above the day session LOD. Pretty standard stuff so let’s fast forward to the important analysis.

What’s next?

Daily closed at 2065, this is the second consecutive session above the daily 200SMA with a bit of a top tail candlestick. Also, it closed just a tad below the 78.6% fib retracement of 2069.16.
We can now conclude that the bears’ coffin has been shut and nailed in. However, they are still consciously alive, but oxygen is quickly depleting.

Lesson time:
As we’ve been saying in the past; it is a bull train until price proves otherwise. Bears never got their confirmation and our swing short positions were entered too aggressively because we calculated that the odds of daily 200SMA rejection is higher than a full blown squeeze to 2090-2107. We liked the odds and risk vs reward so we took the trades, but it did not work out. This is the reason why we have confirmed immediate targets vs unconfirmed immediate targets as evidenced by the inception of the KISS updates immediate targets win rate.

Targets: As long as the bull train remains above 2050, the immediate targets are 2089.5, 2100 and 2107.

(We made a minor mistake in Thursday’s update, the August high is ES 2107 not 2103.75)

For bears: Monday/early next week needs to get back below 2054 the daily 200SMA as soon as possible and onto the trending daily 8EMA currently at 2029.62. (Daily 8EMA will probably become 2035~ when it opens on Sunday 6pm).
Obviously, the market could just consolidate in a tight range and wait for the Wednesday Oct 28 FOMC announcement as it burns off more premiums in options and it lets the moving averages catch up.

Roadmap and thoughts:
Generally speaking, from trading various instruments over the years we’ve noticed that when a retracement on a daily chart closes above/below 78.6% then a full retracement to the 100% becomes very likely eventually. However, we do not have the relevant backtest system to prove this in a statistical manner. Bulls really need to close above 2069.16/2070.

The first try at Daily 20EMA is a BTFD setup

Even if bears manage to reverse next week or within these two weeks; daily bulls have a first try BTFD setup at daily 20EMA setup just like how first try hourly 20EMA was a BTFD setup during Friday’s day session. We count this rally from the 1861 vs 1861.5 hourly bottom to 2065 as Leg 1. The bounce has never had to retest the daily 20EMA yet, but retested the daily 8EMA 3 times and bounced off it. This means it has been a massive bull squeeze run that the very first dip to 20EMA should sticksave. However, just because first try BTFD at daily 20EMA is a great setup ,it does not mean it has to be a daily chart scale bounce (50-100 points). It could just be an intraday 20-30 points bounce then retest the daily 20EMA again if bears manage to have that much conviction.

Weekly bulls/bears: Price has closed above weekly 50SMA. 4 weeks of green.

Monthly bulls/bears: There’s 5 sessions left for the monthly candle closing. August high = 2107 that’s bulls first target. Bears want a top tail and back below the monthly 8EMA of 2022.39.
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Our Swing Position
• Took losses on all the Nov Monthly OTM Puts (position size was 15% on Thursday)
• Reduced position by 45% in the Dec Monthly ITM Puts (position size was 65% on Thursday)
• Total = 20% swing shorts now (80% swing shorts on Thursday)
Previous weekend update: https://www.elliottwavetrader.net/membe ... Id=2152308

[Trades with cats]

Att Dividend players, the Tanker Casino is hot again. If something north of a 9% yield is what you want to look at if you hit the jackpot. Evrything here is thanks to the tireless posting s of the dividend pkayers over at InvestorVillage who have kept the tanker boards alive during the down tern.

They have run out of ships in the spot market due to congestion in China and rates actually got back to $100,000 a dayin very early October. They have dropped back some but everybody is making money. At the bottom we were talking under $26,000 a day. Why so volatile? Well there just aren't that many tankers in the spot market, most are on long term charters. Very important point is what it costs a day to shut down a refinery because you ran out of oil. Clean tanker (product) market isn't as hot right now but hey the refineries are all shutting down for fall maintenance so no surprise.

THis is pretty currenthttps://www.intertanko.com/Members-Info ... -figures-/

This gives a good overview of the 6 US listed companies. It is badly out of date on Frontline FRO because the numbers are all pre-merger with the sister company.http://marketrealist.com/2015/09/comp-f ... ance-3q15/

And this is a very fresh stock recommendation from an old line English company reposted by the guys at Investorvillage on the FRO board:

FEANLEYS being one of the 4 largest brooking houses, report

Fearnley:

Crude sector update: We have lifted our near term crude tanker spot rates by 30-40% through the winter season (4q15/ 1q16). Tanker stocks should move higher in tandem with a continued strong winter market, as exceptional near-term earnings are passed on to investors in the form of cash dividends. We highlight DHT (Buy, TP USD 11.5) and TIL (Buy, TP NOK 143.3) as our favorite picks. See Friday’s update for more details.

And finally Hellenic Shipping news says everybody has to install a ballast water treatment system, which takes 20 days in port and costs 1 to 3 million. The deadline is based on the individual ships inspection dates. So lots of hulls are in drydock getting early inspections before the Jan 1 change. Also they expect some of the oldest VLCCs to go to beaches in Bangladesh (where they cut them up for scrap)http://www.hellenicshippingnews.com/tan ... ge-supply/

[DellGriffith]

I'm beginning to think that the SPY $195 gap will never get filled, and now there's a new gap to $205.51.

Miyangi's quote above probably should have been in BOLD RED because if the bb ma cross of the 50 pans out, SPY will fill that 195 gap en route to slamming the lower bb

[DellGriffith]

Here's an article that looks that many factors regarding a 2015 rate hike (either october or december)
http://soberlook.com/2015/10/the-possib ... in-us.html

Can't vouch for that site but it seemed thorough.

[DellGriffith]

Early futures returns show SPY is trying for the gap down / abandoned baby monday. Doesn't mean it will happen, or even needs to happen for my shorts to pay off.