Return Of The Market Mole

Late last night I returned to Valencia after having enjoyed the tranquility and beauty of Sevilla. If you ever have the chance I strongly recommend a visit as it’s one of the most stunning and welcoming places I have ever had the fortune to experience. And don’t get me started on the food – it will take me weeks of hardcore weight and endurance training to shed the pounds I have accumulated over a mere four days.

But now it’s back to work and frankly speaking I have been very much looking forward to it. No matter what you do with your life, here’s a good test. If you go on vacation and dread returning to your job on Monday morning then stop right now and find something else to do with yourself. Not to sound trite but our days on this soil are numbered – do your best to embrace every single day as if it were your last (like Robert Prechter you will be right exactly once).

When I was meandering the streets of Sevilla I couldn’t help but wonder if many of the low paid staff working at the restaurants enjoyed a better quality of life than the ‘professionals’ climbing their way to the top of the food chain in inhuman urban sprawls like New York, Los Angeles, London, Hong Kong, etc. Most of the folks in sleepy Sevilla seemed rather happy and content with their comparably meager existence. And how could you not be, surrounded by so much beauty, good weather, good food, well dressed and relaxed people. What came to mind was the story of the fisherman and the businessman – in case you haven’t:

There  was once a businessman who was sitting by the beach in a small  Brazilian village. As he sat, he saw a Brazilian fisherman rowing a  small boat towards the shore having caught quite a few big fish. The  businessman was impressed and asked the fisherman, “How long does it  take you to catch so many fish?” The fisherman replied, “Oh, just a  short while.”
“Then why don’t you stay longer at sea and catch even more?” The businessman was astonished. “This is enough to feed my whole family,” the fisherman said.

The businessman then asked, “So, what do you do for the rest of the day?” The  fisherman replied, “Well, I usually wake up early in the morning, go  out to sea and catch a few fish, then go back and play with my kids. In  the afternoon, I take a nap with my wife, and evening comes, I join my  buddies in the village for a drink — we play guitar, sing and dance  throughout the night.”

The businessman offered a  suggestion to the fisherman. “I am a PhD in business management. I could  help you to become a more successful person. From now on, you should  spend more time at sea and try to catch as many fish as possible. When  you have saved enough money, you could buy a bigger boat and catch even  more fish. Soon you will be able to afford to buy more boats, set up  your own company, your own production plant for canned food and distribution network. By then, you will have moved out of this village  and to Sao Paulo, where you can set up HQ to manage your other  branches.”

The fisherman continues, “And after that?” The  businessman laughs heartily, “After that, you can live like a king in  your own house, and when the time is right, you can go public and float  your shares in the Stock Exchange, and you will be rich.” The fisherman asks, “And after that?” The  businessman says, “After that, you can finally retire, you can move to a  house by the fishing village, wake up early in the morning, catch a few  fish, then return home to play with kids, have a nice afternoon nap  with your wife, and when evening comes, you can join your buddies for a  drink, play the guitar, sing and dance throughout the night!” The fisherman was puzzled, “Isn’t that what I am doing now?

Before we get to our charts I would like to thank Scott ‘The Convict’ Phillips for committing a complete brain dump all last week. He claims that it was literally all he knows but he’s too humble and I can assure you that you have only seen the tip of the iceberg. There’s a lot more below but like fighting or fishing it unfortunately cannot be taught via literal instruction – it has to be practiced and experienced. And that is what we do here every day. As Scott already mentioned – all of what has been shared in the past week will be covered here repeatedly moving forward. It’s one thing to read and understand something but I consider it my job to continue drilling it into your retail rodent brains.

The Mole’s vacation curse still seems to be live and well – for the past few years the going joke here has been that every time I take a few days off the market starts tanking. So I just popped up my charts in expectation of being able to suggest some impending support levels but quite frankly we have very little context here. And that is okay – one of the hardest lessons to learn even as a seasoned trader is to know when NOT to trade.  No matter what ‘lens’ you use right now – there’s not much to hang your hat on, no matter how hard you look. So don’t waste your time – instead wait for better weather.

The ES futures rolled over on Monday but we are decidedly back in a high volume zone. And that means we may bounce around here for a while until the tape decides where to go next. Don’t make the mistake of trading your book or your opinion right here, market makers love configurations like this and they will send you to the woodshed three ways until Sunday.

On the weekly panel we just completed a rather long inside week candle. Given what I’ve shown above I think we may be looking at some tough tape ahead, at least until we breach below 1824 or push above the recent highs. So this week may pave the way to what lays ahead this spring – the inside week candle will produce either a buy or sell signal on a breach of its high or its low. If you’re a skilled short term swing trader then you may have a lot of fun in the coming days. Especially if follow our Zero indicator – it offers great signals in sideways tape.

There is however fun to be had – join me in the lair for some juicy short term setups:

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!

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Draghi Time!

So today it is Mario Draghi’s turn to shake up the markets a little – apparently this week will be our early spring cleaning for the year. We’ve already seen quite a bit of movement ahead of time as traders are locking in profits on various EUR and GBP crosses. Our Heisenberg beta testers already banked some fine coin this morning – more on that below.

Equities are seemingly relaxed until now. The spoos have slowly descended toward the 25-hour SMA, which thus far has been holding up through two big announcements. So let’s continue to stick with the charts, shall we?

The GBP/JPY is also holding up – it’s one of the popular carry trade pairs right now. On eventful days/weeks like this I always look toward the Forex side first as it’s the big dog wagging equity’s tail.

On the short term trading front I am sitting this morning out as I am already well exposed via our Heisenberg strategies. We’ve seen a lot of activity there since yesterday as Heisenberg is very good at catching outliers. As a matter of fact the entire concept driving Heisenberg is that of retail traders expecting mean reversion and instead being bitch slapped by leptokurtosis. Let’s see some of that in action:

First here’s one that got away yesterday. NinjaTrader was throwing me several curve balls on my production machine and I spent several hours fixing a corrupted database (don’t even get me started). Most of the symbols kept running fine but we weren’t able to load the spoos and missed out on a 3R winner. Very annoying to say the least. But fortunately this morning’s moves on the Forex side already made up for it.

CHFJPY running against the 60 minute chart. Took 25% profits at 1.2R and just actually closed out at 3R.

Same on the EURUSD.60, however this one is still in the running. Our stop is currently set to 25% MFE (maximum favorite excursion). If you guys are unfamiliar with the lingo then head over here for some of the basics.

GBPUSD.240 took partial profits at 1.2R – our stop here is still at break even and I expect this campaign to continue for a while unless we see a complete reversal today.

So this morning has been a lot of fun already, which is when you usually step away and don’t push your luck especially ahead of Mario’s big media moment. If you’re interested in automated trading then feel free to sign up for our free Heisenberg beta which is still ongoing. For more details please check out the intro as well as the campaign management example.

Have fun but keep it frosty.

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.


Setups Galore Wednesday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

We’ve got a ton of juicy setups this morning and equities are looking like they may ready to make a move. So grab a cup of java (or tea) roll up your sleeves and be ready for action – time to have some fun. So the GBP/JPY carry trade pair is still pointing down. If you look at recent shot term divergences you note that the pair always won.

However, I’m willing to consider both directions this morning, the potential for a fast move on either side is just too delicious to pass up. The Russell futures are treading water and are now facing a NLBL and a NLSL just a few ticks away. You know what to do – take a breach and use the inverse as your stop. DELICIOUS!!

I provided a bit more detail on the YM chart – very same setup. I mentioned ‘short until then’ but I should have said ‘short below the NLSL’.

The spoos not giving us ideal entry conditions and I would probably stick with the former two. However if it pushes above the SMA/NLBL combo then the bulls may just muster up the mojo to climb a few handles. Otherwise it’s looking pretty sad down here on the equities side. Bears rejoice but don’t get carried away.

But we’re just getting warmed up. Check out this beautiful configuration on the Dollar – I expect a big move coming and once again we have a small range separating the respective triggers.

More below the fold – please join me in the 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.


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    1. Drop The Baseline
    2. Lazy Thursday Morning Briefing
    3. Back In The Thick Of It
    4. The Squeeze Is On!
    5. Return Of The Market Mole
    6. We have a potential long setup here, but it sucks
    7. Start of the week
    8. Scott’s market update
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