The Bad Boy Buy Bots Are Back!

Something caught my attention last Thursday, exactly a week ago. You may remember the UVOL chart I shared with you that showed a red sell interest curve that to at least to me appeared a bit unnatural, if you will. It appeared that selling pressure was constant and highly organized – thus suggesting that it was driven mainly by bots and most likely not human traders.

Well, guess what – apparently the bad boy buy bots are now having their turn – as a matter of fact they appear to have been rather active for the past three days. Take a look at the chart above where I highlighted the days when selling pressure was constant with very minor intra-day retracements.

Of course you may wonder why we would care, right? Does it matter if the bots are buying and not humans? I think I do because what really drives the tape these days are automated strategies and not human beings. Just look at the buy curves on down days – they don’t look very organized to me. As a matter of fact the curves are quite a bit more random which suggests that some people got squeezed out of their positions and had to sell their long exposure. The sell curve however looks smooth and organized – coincidence? I think not.

If you want to develop a better feel for what drives this market then you need to pop open the hood and take a peek at the engine. How it runs is as important as to where it takes you. Perhaps the bulls simply pulled over a few days ago deciding it was time for an oil change ;-)

On the spoos we are now approaching the 25-day SMA and a NLBL – we have about 15 handles to go and whether or not we get there today, this is where I expect some type of resistance. On the weekly side we are peeking over that NLSL – if the bulls manage to close above it tomorrow it would be a small victory as it would reverse the prior signal and also give us a nice weekly hammer with a tail touching weekly support at the 25-week SMA. But I want to be clear that the bulls are NOT out of the woods just yet. Failure at the 25-day could easily swing this thing back lower – so don’t get complacent.

Excellent setup on silver today after a pretty nasty sell off yesterday. I’m still holding some short positions and have now moved my stop to the inside day’s buy trigger. If you’re not exposed here yet then play the ID as you always would.

USD/JPY – popping over its 25-day SMA and if it can hop over the weekly NLSL at 98.57 we would have confirmation that the long side is probably the way to go. Again, I showed this yesterday already and the converging daily SMAs were a perfect inflection point.

As usual, more goodies below for my intrepid subs – please step into my lair:


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Cheers,

Weekend Becomes Eclectic

We have a nice mix of material to work through this weekend so let’s get to it. About two weeks ago, as the SXP was pushing toward 1600, I suggested that we may see a short term shake out and that’s we got. Of course buyers followed up just a few days later and that now leaves us with an interesting configuration on the weekly panel:

I’m currently seeing the possibility of a Retest Variation Sell setup – it’s not complete yet and would require a drop below last week’s low to trigger. Very interestingly there’s also a weekly NLSL sitting nearby at 1539 offering additional support. Personally I think the odds of this setup failing are probably better than 60% and if we drop lower again this week I would be actively looking for long exposure near that weekly NLSL. A breach of course would lead us lower but at this point that’s pure Asimov.

The SPX P&F is bullish as heck and is now pointing at 1695 as its next price objective. Again, that’s a long term target, always keep that in mind.

But it may be the daily panel that may give us early clues as to where we’re heading next. Last Friday the spoos painted an inside period and the range is rather small which makes for a juicy setup this Monday.

Before we get to my laundry list of long term charts I wanted to offer some perspectives on the USD/JPY, which I think just made its first step toward a long journey to the upside. That breach of the 100-month SMA is significant and although we can’t rule out the possibility of a retest that SMA will now most likely become the basis of a climb much higher. The weekly panel already successfully re-tested a NLBL and as long as it holds we’re off to the races.

Well, I warned you this would be an eclectic mix of charts. AAPL showing first signs of hope as the bears were just put on notice via a low pole reversal warning. The bearish PO remains in place but a push above 430 would change that and possibly put us back into some longs. Well, it’s been a great ride down – let’s see what happens here in the coming week. If you’re still short AAPL then a push above 430 should be your signal to pull the cord.

But we’re just getting warmed up – a lot more waiting below. Please step into my lair:


More charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don't waste time and sign up here. And if you are a Zero subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

Please login or subscribe here to see the remainder of this post.

Cheers,

Euro Perspectives

This weekend all eyes are once again on the ongoing drama in Cyprus – many editorials are focused on how may (or may not) address a Monday deadline to avoid a banking collapse. I’m certain you all know the story and I won’t waste your time on yet another opinion piece. Let’s just say that I continue to greatly admire the European’s ability to turn a problem into a crisis, and a crisis into a catastrophe. Well played! I’m not being cynical actually – after all this is not ZeroEdge. Well, maybe a little bit. Never forget that there is opportunity in chaos and if you believe that the emotional roller-coaster ride of the past five years has not benefited certain parties then I won’t try to convince you otherwise.

Let’s instead be productive and talk about what we really care about in the context of Europe – which of course is the Euro currency and not a tiny player like Cyprus. Obviously I’m posting this and other pertinent chart knowing that things may quickly escalate by Monday morning, but it’s still crucial to know where our pertinent inflection points are. Above you see our FXE P&F chart – it shows us a bounce right where it should have happened, near the 127.5 mark, which I pointed out as the Euro’s final line of defense several weeks ago.

At this point the bearish price objective of 118.5 is still in play however if we see some type of final resolution by Monday I wouldn’t be surprised to see a push into 131.5 or 132 which would constitue a low flag pole reversal warning and put the bears on notice. Similarly non-resolution may finally take us much lower below the 127.5 mark and beyond.

The weekly panel shows us below the 100-week SMA and that’s bearish. A reversal back above would be very bullish as it would represent a failed SMA breach. On the monthly panel we see two NLSLs, the first one of which near 128 has been providing support thus far – a drop below 125 would probably get us toward our P&F target, at least somewhere between 121 – 119 is a possibility until there is some LT support.

Let’s also look at some of the pertinent FX pairs to round out our perspective on everything EUR:


More charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don't waste time and sign up here. And if you are a Zero subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

Please login or subscribe here to see the remainder of this post.

Some Words To The Wise

Once again I suggest that you simply ignore all the noise about Cyprus you will invariably come across this weekend (unless of course you live in a cave). Chances are you are as sick and tired as I am of the constant drama and the never ending debates focused on the damage control du jour over here in Europe and to some extent over on your side of the Atlantic. There is a growing phenomenon that seems to have become an addiction in its own – to constantly expect and even salivate over some possibility of a tragic system failure – that coveted six sigma event that may somehow reset everything. In that respect I must caution everyone to be very careful what you wish for – as you may just get it.

Perhaps this is a subconscious response to an increasing frustration with the Western political and financial classes which are both obviously in rather questionable state these days. But guess what – there’s nothing new under the sun – this game has been played on for a long time now, and we yield very little control to affect its outcome. The one thing that has changed is a rapid explosion in instant communication and a wider playing field for the dissemination of information. And what has not changed is the most fundamental aspect of it all – the inherent nature of man.

The reason why I started Evil Speculator in the first place was to give the little guy a fighting chance in navigating the traps and tribulations involved in trading the markets during a time of (sometimes fabricated) crisis. We do that by focusing on our charts and most definitely not by following the news. Whatever you will learn about Cyprus this weekend will come too late – meaning by the time it reaches your eyes or ears it has long been played by the inside crew. Follow the charts and you may at least be able to ride the coat tails of those invariably positioned to be on the winning side of the tape. As the saying goes – don’t listen to what they say – watch what they do.

Cheers,





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