Boy, I can’t believe we actually closed below 800 – that was a bit of a surprise as we were only a few points away (797.70).
What also surprised me today was the lack of participation. After all, it was the last day of this quarter and I expected to see a stronger signal. We didn’t get disappointed by price movement however.
As expected the Primary Zero did well today and the Lite never dropped below the zero mark. I scared my subscribers in the morning by advising them to not take the long VTA due to the rather flat signal – turns out I was full of shit and that the alert was good – I hope they ignored me. The Zero Lite was doing great as long as we rallied up but it was strange to not see it drop below the zero mark towards the end. Yes, it dipped down quite a bit and scraped along but there was no divergence to announce that drop and no indication as to where we might head tomorrow. I hope the direction is down as I’ve held my puts through all this.
There you go – see, I do my best to be objective about these reports and you are all welcome to chime in. Some wankers suggested that I was only using these wrap ups to hype my indicator – well, yeah – this is a good way to attract new subscribers – true that. But again – it’s a two way street – right? If I was full of shit and if my subscribers were unhappy I’d be sure they’d say so right here. So far they seem to be very happy with what they’re getting – at least that’s the impression I receive from what I think is an overwhelming majority.
Anyway, you guys can all think or say whatever you want. But the data speaks for itself. You can use this link to see all of the wrap up posts, sorted by date:
Seems like my prior post launched a shit storm – and was in particular exploited in particular by snarky anonymous posters who never ever contributed here before. This goes out to you guys:
Hey, I understand you’re pissed and were just waiting for a chance to pounce and fuck with the Mole. After all, I have been taking your money for months now – ouch – this got to hurt. Now shut the heck up and post something of substance and maybe I’ll take you seriously.
Anyway, I’ve got a thick skin but many of you don’t seem to, so let’s review my prior statement for all you mentally and emotionally impaired:
What are you guys – rats or mouth breathing leeches? Because there’s only a place for rats here – and they pull together and collaborate. I’ll be back when I see quality return to this blog.
It seems the meaning of this has all but escaped you mouth breathers. I have long insisted that the only way to survive this market is to collaborate and exchange ideas. It seems that most of you have forgotten what I posted back in October 2008 – perhaps it’s time for some of you to go back and read it again:
http://evilspeculator.com/?p=1147
Let me quote what I believe defines the essential idea behind Evil Speculator:
Anyone who comes here is invited to become part of our cause, no matter what color, creed, or culture. We play by the rules, even if they change them on us midstream we simply learn and adapt. We work hard to develop a system that offers us an edge, and it is our system – we play by no other person’s rules. The market is a cruel mistress and as such we pay for and acknowledge our mistakes and weaknesses, doing so makes us better traders. We strive to be disciplined and resist emotions like fear or greed, and we reject cognitive biases tempting us to bend or even break our own rules. We recognize that despite the fact we all compete against each other there is strength in numbers – therefore we choose to collaborate and share our insights. After all, what we are up against are extremely well organized institutional traders with access to considerable resources as well as intimate knowledge of how to play ‘the game.’ Finally, we don’t hesitate and take action as as soon as the opportunity represents itself – nothing you do or know matters if you can’t pull the trigger when the time is right.
So, if you still think I’m the crying baby who’s complaining about his poor little blog not getting the participation he deserves – think again. I could take the Zero, evil.rat, and several other trading strategies I have developed and sell them to various hedge funds. I know that I can because I have been approached several times and could easily ’sell out’ and make a pretty penny. I really don’t need to be doing this. But I have chosen to do so because I care and I hate to see people lose their 401ks and life savings to a bunch of butt pirates looting the country and now the public purse.
If you feel like insulting somebody – maybe you should start with some of those cronies on Wall Street who are responsible for this whole mess. The corrupt politicians who have looked the other way while high paid lobbyists were changing the game in their favor. As I’m writing this these people have a plan and they are actively working to deprive you and your children of a prosperous future – at the personal gain of a small minority (i.e. banksters). What have you done to make a difference? Oh yeah, I forget – you told off Mole because he dared to ask for participation – you should be so proud of yourself.
So, if you come here you better appreciate the fact that I despise leeches. I have been doing my best to turn you guys into group of self sufficient and collaborative traders who can survive any market and support their families in the dark times ahead – no matter what. Unfortunately many of you leeches have grown such big egos that you can only see and think as far as your nose goes. Good riddance to those among you.
Whoever is capable of jumping over his/her shadow and accept Evil Speculator for what should be – you are more than welcome here. This blog is more than just a quick fix on free EWT analysis – if you don’t see that then you are completely missing the point. This blog is your chance to become a better trader and contribute to a growing group of like minded individuals who back each other up – in good times and in bad times. Because the folks we are trading against are organized and they do collaborate as their strategy is paying off – handsomely and in the Billions I might add. But you, Mr. Genius, you think you can go it alone.
Quite frankly – I’m not feeling it here lately. The comment count has gone through the shitter and the quality of comments right with it. Yesterday night I asked you guys for long candidates so we can ride that Minor wave 3 rocket all the way up. I just scanned the few comments since last night and see nothing – zilch – nada – nichts.
Rats – I have been working day & night lately and am worn out. When I ask you guys to participate I expect at least some minimal effort. And frankly, it’s been like pulling teeth lately – I keep producing like a machine – post after post after post – and I get fairly little in return, except for the same questions over and over again. The comment count is going down – not sure why. And it’s not the market as I see plenty of bears participating over at the Slope – T.K. can hardly keep up with his crew. Man, I wish I had a blog like that!
So, I’m going to go into quiet mode for a while – how long I don’t know – maybe an hour, a day, a week, or a month. It seems that my time here is neither appreciated nor rewarded.
That’s where I’ll be with my lappy – working on evil.rat and sipping on Margaritas. And please spare my any postings along the lines of ‘how much appreciate the blog – blah blah’ and ‘how you’ve only been so quiet because of [fill in paltry excuse of your choice]‘. What are you guys – rats or mouth breathing leeches? Because there’s only a place for rats here – and they pull together and collaborate. I’ll be back when I see quality return to this blog.
I don’t have a lot of time tonight, so let me proceed directly to tomorrow’s chart:
We satisifed the minimum requirement for a Minor wave 2 retracement but since it’s an expanded flat (see our bible psalm 47:1-34) I’d like to see five waves to the downside – right now it looks like only four. That would get us to the coveted 770 region which is where I’d like to position myself for Minor 3 of Intermediate (A) of Primary {2}. My favorite scenario would be a touch of 790 – 800, followed by a drop to 770. Yeah, we should be so lucky
Of course further downside is not guaranteed and this could have been it as we passed the 23.6% fib line right at the open. Well, I’m sure we’ll know fairly soon after the bell tomorrow – let’s not forget that the larger degree trend is to the upside and that is where we should expect nasty surprises.
Either way – your mission tomorrow, should you choose to accept it, will be to find long candidates for riding the looming Minor wave 3 rocket to the upside. As you know I have some mixed feelings about what lays ahead. On one hand a third wave is usually a fun ride, assuming you actually manage to jump on board, which is often the tricky part. However I also see a lot of resistance looming ahead, thus I’m extremely cautious about picking a target for this one.
But you know what, ladies and leeches – sometimes it’s best to not over think the whole affair. We know the odds at this point and need to play the cards we’ve been dealt. So, I suggest you go through your favorite symbols and find us some oversold candidates (if there are any). I will also consult shortsqueeze.com to see if I can find some stubborn candidates with a high short squeeze factor. Those should pounce nicely should we get a push to the upside.
Finally, if we drop through 770 then there’s not much holding us up until probably the 730 region. I don’t think that is really a high probability but I wanted to throw it out there.
I got really lucky with my GLD puts today as I managed to grab them close to the top. That doesn’t happen too often, especially with precious metal trades. So far so good – it’s important that we do not close above that diagonal going forward. A spike to the upside wouldn’t concern me too much – I’m more concerned with closing prices at this point. Similarly we’ll know pretty soon what’s transpiring here – after one month of whipsaw we’ll either get a release to the upside or downside. Obviously I’m expecting the latter but have no compunction to head for the hills again should we see a close above that ‘fucking diagonal’ – hehe.
It was important for the Dollar to put some distance between its prior low as the probability for further upside is a lot higher now. I mentioned today that I’m counting the retracement as a ‘dirty’ a-b-c, with c representing a Bernanke sponsored spike to the downside. Note that we touched the 38.2% fib line almost exactly – we might see a little pull back but as we are in a third wave now the trajectory should be clearly to the upside going forward – I expect the prior high of 89.44 to be breached in a short order.
That’s it for tonight, my dear rat minions – see you tomorrow morning evil eyed and bushy tailed.
Yeeee-haaaa!!! Good day for the Zero – observe exhibit A:
Clean signal all day – we remained below the zero mark all day on both sides. That’s what I’m talking about. At the end we got a push into what I think may be the B wave for this consolidation. Note the divergence on the Lite – the second spike lower is losing momentum and then resolves to the upside.
Not much else to say really – I’ll chime in a bit later with some observations of where we’re heading next. I’d love to see 770 before we continue to the upside, but let me pore over my charts for a little.
Hey, did any of you guys grab those puts I pimped this morning? ICE was a lot of fun, NVDA hold steady, WYNN held as well, and FAST was the only one which moved with the market at the end. ICE and GLD were the money makers today.
BTW, if you haven’t seen it yet – check out the new evil.rat page I posted yesterday. You guys might enjoy those profit graphs.
Step by step…. come on, rats – suffer through it!!!
UPDATE 2:15pm EDT: Not surprised to see us push up now – there was a strong divergence in the NQ vs. the ES about 15 minutes ago. I didn’t cover my short – sick of turning into a daytrader – playing the futures is enough. Could however just be a B wave to the upside – as I said, we need more than just a one-day Minor 2 wave.
A bit of a pain in the ass tape today. Looking at that SPY chart we’re in a weird spot right now – a lot of air above and if we push back I’d be heading to the hills probably. I don’t feel like loading up on the long side here – SPX around 770 for me is minimum, which would also be roughly a 38.2% retracement.
BTW, Zero Lite painting good signals today – kept us in the trend so far.
UPDATE 3:15pm EDT: One always wonders where those sudden long green candles always come from. Lovely to see 30 minutes worth of downside price movement being taken out in 2 minutes. Your tax Dollars at work, rats – LOL
I think we’re back to re-testing the VWAP – this shit is getting old. Seriously, the only real price action we’re seeing these days happens overnight – and then you’ve got to take a coin toss as to the direction. I’m not complaining though as my puts are doing pretty well even during the spikes back.
UPDATE 10:35am EDT: You guys have no idea what I’ve been through this morning and all weekend.
Friday evening the hosting company migrated operations over to a brand spanking new server and since that moment I have been fixing problems left and right. After not getting any Zero subscriptions for a day someone finally alerted me to the fact that that page was broken as well – &%@$(!*!!
Once I got that and a host of other issues fixed I thought I was out of the woods. But nooooo – just 20 minutes ago someone over at the hosting firm fat fingered a Unix command and effectively shut down the entire site. Shugs – great start for a Monday morning.
Give me a break rats – I have been working all weekend. These things never go completely without any hiccups and much of this is out of my hand. I actually have some mean Unix skills but unfortunately I don’t have full control over the server – it’s a co-hosted box – therefore I myself need to file support requests when the site falls off the plate.
Damn – I need a vacation….
The SPX experienced a little melt down as well this morning. Quite frankly – although I do like seeing what I have been asking for – a meaningful retracement – it all is happening a bit too fast and too hard. We are already touching that diagonal I pointed out yesterday and a one day Minor 2 wave would be a bit rare. So, it’s possible that we’ll whipsaw around until April 1st, which is the beginning of the new quarter. Although there’s a bit of portfolio reshuffling going on today I doubt the boys will let things get out of hand completely. Watch for support around 770 and then 740.
UPDATE 12:37pm EDT: Nice – I just traded the NQ all the way from 1204 to 1214, which was close enough to the VWAP line. FYI – just as a side note: What I often observe is a fake out move in the opposite direction one point away from the daily VWAP, after which it pushes back 80% of the time to finally touch it. Then there’s usually a retest – of course at that time it’s tough to know whether it’ll resolve into further upside or downside – I usually follow my momentum indicators. Right now they look overbought on a hummingbird chart.
Also grabbed May GLD puts at 930 – looking pretty good so far. Of course when it comes to Gold one’s glory is often short lived. I now would enjoy seeing a fat drop to the downside – we need to see some distance between the price and that fucking diagonal.
UPDATE 1:26pm EDT: I grabbed some puts in FAST, ICE, WYNN, and NVDA – have a few more I’m trying to get filled in.
UPDATE 2:53pm EDT: The ole’ buck is on fire today:
Explains the drop in Gold plus it offers a comfort buffer zone away from that low last week. At this point I still think this was an ‘ugly’ a-b-c correction – c being very long due to Bernanke’s printing press. We should see further upside and and I expect the prior high of 89.44 to be breached.
BTW, the NQ is stubborn today – ES is dropping while the NQ is going sideways.
If the S&P 500 was a cute German redhead then that would been its March trailer:
We’ve had a very nice run in the past three weeks and at this point it’s pretty much guaranteed that we’ll end the month in positive territory. Since the 666.79 low on March 6th to this wave’s current peak at 832.98 we’ve rallied a whopping 166.19 SPX points in 21 days. For your bean counting rats – this is a stunning 25% reversal, which in itself should lay rest to any further expectations/hopes for a medium term bearish scenario. However, we can never be sure and until the wave count disqualifies the Intermediate (4) of {1} flat scenario I’ll keep it in my desk drawer – ready to whip it out if we breach that 700 line.
But even Lola needs to take a breather sometime before she proceeds with getting into further trouble. So, in the short term I see two scenarios – the easy part is that both are based on the assumption that we are in Intermediate (A) of Primary {2}:
Orange: We keep ignoring gravity plus all current trend/momentum indicators (see below) and push higher to complete 3 of (A). I’m a bit split on this count frankly for several reasons:
The NDX is facing a wall of resistance and I don’t expect the SPX to make a run on its own.
If this a third wave it doesn’t have to be the longest wave but should take us further than 880. The problem there is that this is the 23.6% fib line of Primary {1} and if we don’t fall back at least 10 points you can call me uncle. So, the point here is that this would be a very short third wave – and that would be ugly.
We are extremely overbought at this point – although I have been surprised several times in the past two weeks we are way overdue for a ‘meaningful’ retracement (e.g. 25 SPX points +).
Blue: We started our descend into {c} of 2 of (A) on Friday, which should bring us down to the 770 – 780 region. This appears to be an inflection point at which various trend and resistance lines converge. It is however the maximum allowable under EWT rules, so a further drop below 770 would change our wave count. I expect some turbulence around the psychologically sensitive 800 mark. We all know how much the mouth breathers like to hang on to round numbers.
Giving additional credence to the blue scenario is the NYSE McClellan, which is painting a nice divergence. Of course that doesn’t mean we cannot add one or two more spikes back into the 90/100 region before we see a meaningful short term correction. The bulls needs a break as we are running out of buyers.
Although equity investors seem to be ignoring recent economic data the Baltic Dry Index is something everyone should be keeping their eyes on. It’s been steadily pointing down and dropping since the rally in equities began – a strange ‘coincidence’ if you can call it that. The fundamentals continue to deteriorate despite what those schmucks on Wall St are telling you. I went to the Beverly Center yesterday (as I needed new underwear – I’ve been shitting through all my old ones in 2008) and I can tell you that it was pretty much empty. Now – this mall is on the outskirts of Beverly Hills – if that one is deserted then I don’t want to know how malls in Ohio, Indiana, or New Jersey look like.
Now, having said that – you guys all know that I’m not a fundamental trader but I do follow various markets and indicators so I can draw conclusions as to the probability of certain wave counts I’ve got in the race. One of the reason I have been staying pretty much in cash for the past three weeks has been the bond market. Jeff over at the Housing Time Bomb put it very nicely:
Remember, the bond market is 5-6 times larger than the equity market. The bond market is the dog and the stock market is the tail. Never forget that.
That’s right – on top of that bond market investors/traders are a lot less emotional and smarter than their mouth breathing equity slinging cousins. And when I see intra-day swings like the ones above I get very nervous and usually reduce my exposure. Let’s zoom out a little:
Remember when Bernanke announced that he’ll buy the long end of the treasury curve? Well, that long spike on the chart is hard to miss. But what’s also hard to miss is the fact that we already retraced 61.8% of that advance. Yes, we bounced back to almost the 38.2% line but have now again breached 50%.
The yields ($TNX) have accordingly been creeping to the upside. Now, traditionally rising yields are bullish for equities – nothing unusual – check. But wait a minute – Bernanke is hell bent on keeping yields low but we are actually pushing towards 3% – how’s that working out for ya, Big B?
I wouldn’t be surprised to see a nice C wave to the downside (what we’re painting on the TNX looks a bit like a developing a-b-c). So, if Ben goes on another shopping spree (your tax Dollars at work) it might be the needed catalyst for equities (and treasury yields) to correct to the downside a little.
Friday I finally got my close below that ‘fucking diagonal’ support line I had been deprived of for way too long. Now, in accordance with my evil Gold domination plan, we require a little push to the upside. If those intrepid Gold bugs indeed deliver us a retest I will drop a few pennies into GLD or GDX puts. Let’s keep our fingers crossed – but finally we’re getting somewhere.
Alright rats – I have other duties to attend to and the unfortunately do not involve hot L.A. strippers – need to start putting that page on the directed trading program together which I have been promising you rats.
Oh, before I forget – we switched over to a new and improved artificial intelligence unit serving this blog on Friday night. It appears one or two people had trouble subscribing to the Zero – if you experience any problems please shoot me an email to admin [-at-] evilspeculator (plus the dotcom stuff). My apologies for any inconvenience but these things never go down smoothly.
UPDATE 12:00am EDT: I just added a first draft of the info page I promised you rats – the strategy is called evil.rat.
This was a horrible whipsaw day and both Zeros performed brilliantly:
Nice clean short signals on the Primary Zero (with a temporary false negative to the upside which disappeared quickly). The Lite was simply brilliant, note how 90% of its time was spent below the zero mark – the two swings up could have gotten us out but we dove right back down and there was probably very little damage done. I’d give both a straight A today – especially in this kind of tape where everyone was confused (judging by postings and comments on other blogs and comments right here as well).
Alright, before I leave you guys for the weekend I have a special little treat to share with you rats:
This is a 12 months profit graph of that directed trading program I have been teasing you guys about lately – it goes from March 15, 2008 until the close today. Note especially how well it did during Gravestone Snooze December, Nightmare Flip Flop January, Bear Season February, and finally Monster Whipsaw March. It’s like the fucking Energizer Bunny – it just keeps on going and going and going:
Obvious from the graph is that this strategy loves volatility and eats it for breakfast. However, it also does very well under low volatility (i.e. VIX below 30) but although we might see that in the coming months for a brief moment I’m confident that we’ll remain above the 30 line for a majority of the time for the next two years.
Max draw down on this strategy is a whopping 5.1%, which is ridiculously low. Had you traded one single ES contract the net profit on this strategy would have been $41k – not bad at all considering that it’s only in the market very briefly every other day or so and closes out every evening. So, there’s no worrying about holding overnight.
More details will follow but for now I’m busy implementing the email alert system, which requires a lot of hackery on my end to make work properly. If things get too hairy I might do this manually for the next month or so. Sometime this weekend I will put up a page with all the statistics, graphs, charts, etc. – anything you need know.
I’m also talking to the people over at ThinkOrSwim to get us evil rats specially discounted futures commissions, futures trading profile for NQ/ES, video tutorials, and a special session with Tom Sosnoff (I hope he says yes). As you know I’m a big fan of TOS and use them to trade the ES and NQ futures all the time. BTW, for the record, you don’t have to execute through TOS to participate – just want to make sure that’s clear.
The way this will work is that you guys will receive an email alert the second an order is supposed to be taken. A delay of a few minutes really doesn’t matter as this thing runs on an hourly chart – so, it’s not exactly a daytrading system. It just happens to perform a lot better if you close out your trades every day at 4:00pm EDT.
There is a stop as well and it’s about 46 ticks away – the system can be traded with a tighter stop but again over time the stop I selected produces maximum profits. Actually using no stop at all is even more profitable: $42k in the past 12 months and only 7% max draw down. BTW, that’s not 7% of your capital – the way NinjaTrader calculates it is on the value of the contract – kind of weird. But I think the visual graph shows it nicely.
I hope that wets your appetite a little bit – more details to follow. This is going to be FAT – like in fat profits!
UPDATE 12:31pm EDT: Thought you rats might be able to use this:
Gives us some short term lines to play with – as you know I’m not touching this today. Zero also not too impressed about today’s tape.
UPDATE 12:48pm EDT: Keirsten shared a chart on the VIX this morning. Here’s my own mental masturbation:
Just an idea how it could play out – VIX is tough to count but there’s a good chance we push through the 30 line before this consolidation is over and done.
Public service announcement:
Please be aware that EvilSpeculator will be moved to an even bigger and meaner server this weekend. I planned to do it last weekend but we were waiting for some parts and I didn’t want to do it during the week obviously since the DNS roll over might have cut a few people off for a day or two.
So, what I’ll do on Monday morning is to post the new IP address over on the Slope so that anyone sitting behind a slow DNS will be able to access the new site. Unfortunately the process of moving to a new server is always a bit painful as your ISP’s DNS might only update every few days or so. If you see very little activity (and no new post) on Monday morning then you might also call your own ISP and tell them to get their act together. Again, the new IP will be available over on the Slope – you can either copy/paste that into your browser’s URL field, or call your ISP to refresh the DNS cache.
UPDATE 2:39pm EDT: What do you know – Gold actually closed below that fucking diagonal:
Okay, now I am hoping for a re-test and that’s when I’m in. Of course we all know what’ll happen – huge drop right from here – LOL
UPDATE 3:00pm EDT: One more hour to go – today is one of those days where I’m super happy to be sitting in cash. I’ve had more fun getting a root canal.
Not sure if you guys are watching the treasuries but the 10-year note got dumped like a cheap hooker today (again).
The yield is obviously on the rise – how’s ‘buying the long end of the treasuries’ working out for ya, Mr. Bernanke? If I remember it correctly the 10-year responded the most when he dropped the news and that’s where I think the Fed was planning to be most active. Maybe some of you bond/note traders could chime in here? Karl is foaming over this – as we well know – and he’s right. The Fed will fail over the long term – we could see yields push through 3% sometime this spring.
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