Ping Pong

3:09pm EDT: As Fujisan pointed out the other day – we’re not going anywhere until we break away from this damn sideways 880/930 channel we’ve been stuck in for the past three weeks:

My concern is that we are consolidating sideways here just like we did last month prior to the final push to the 930 high. Of course for us option traders this is pure hell unless you had the foresight to buy either spreads or butterflies.

Anyway, I have reached the point where I really don’t care anymore – even if my line gets breached. I actually almost look forward to it happening as I can’t stand the whipsaw or the theta burn anymore. However, I have found a great tool to train you rats for the current market conditions:


3:36pm EDT: Finally – last 30 minutes of this shit – can’t wait for the weekend.

The question of course is – which way is it goint to resolve?

3:53pm EDT: Alright – there it is – I’m out after taking another hit. Fuck – this was an expensive week for me.

Zero Taking A Hike

While we keep whipsawing around and the MMs are driving everyone crazy, now might be as good a time as any to announce an increase in the subscription fee for the Zero. Since its introduction last year it has become an invaluable tool for many of you rats and it’s been really kicking butt, in particular during the last few weeks. Subscribers write me every day about how much they love it and how it has helped improve their trading.

Reasons For Taking A Hike

Unfortunately on my end a growing number of subscribers has also meant a lot more work for me and unless you have ever offered customer support for hundreds of subscribers on a daily basis you have no idea how many hours I spent each day answering questions or helping to resolve technical issues. This of course takes time away from my trading activity – and then I still have a blog to run.

Also, another issue has been the rapid drop of the Dollar and unfortunately I will have to compensate on my end for a growing loss of purchasing power. I just had to sink some pretty heavy coin into a high performance workstation last night as I’m running various trading strategies on NinjaTrader (which is a resource hog), plus my data feed, plus the Zero, the data feed uploader, etc. Finally, my hosting cost have increased massively and I am paying a lot more for the server and the bandwidth these days.

The AdSense banners are really not converting very well and despite a continuous increase in traffic over the past few months, monthly AdSense revenues have actually dropped, which is a bit strange. For instance, May revenues as of today are 30% less than those in March. Of course I can’t make anyone click on those banners – therefore I have to cover my cost somehow. I however have to pay the bills all the same – I’m sure you understand.

Bottom Line:

Thus, starting June 1st the Zero subscription fee will be increased to $49.-/month – I believe that is still a very small price to pay for all the value it offers. In the meantime you are free to tack on another month to your existing subscription at the old price. Even if you are not near expiration adding another one will simply tack on 30 days to the end of your current subscription period. Meaning – let’s say you just subscribed yesterday and your subscription is scheduled to expire on June 28. If you added another month today it would extend your membership to July 28 at the current price of $39.-.

I truly hope that I won’t lose too many of you subs due to this, but my belief is that any good trader who sees value in the Zero and is able to leverage the value it provides will be happy to pay an extra ten bucks – we’re not talking about a fortune here. I know many of you will bitch and moan about this, but unfortunately I have a business to run – just like everyone else.



The End Is Nigh!

Well, I can feel the heat around the corner – the end is nigh:

It’s the last trading day of the month, so please remember that the funds tend to use up most of their buying that day. However, by around mid-day this also leaves the markets susceptible to a decline. So, knowing that leaves us in a precarious situation as we might have a difficult choice to make:

Remember how I repeatedly have pointed towards the Wednesday 913.84 high as our new ‘line in the sand’. This has not changed and this is what you should know about handling a breach of that point:

  • If we breach 913.84 even by one tick the blue scenario is done for and we are most likely going to push above last week’s 924.60 high as well.
  • However, that does not mean that we are going to reach 924.60 today.
  • It also doesn’t mean that the market is going to breach 913.84 and never look back. It’s very much possible that we breach by a few ticks and then sell off hard – thus luring in a few more bears, which will then be nuked next week.

Of course the tape could push up and never look back and I would point towards the Zero Lite to make an assessment on when it’s a good time to dump your puts. I personally will not automatically drop the entire load if we tick my line in the sand. Unless we see some insane positive readings on the Lite there is a good chance that we’ll get a better chance to relieve ourselves from all the pain towards the end of the day.

On a personal note – although this week was a short one it has taken a lot out of me psychologically. Where I should see some green there’s a sizable flesh wound in my account right now – on top of it the tape of the last few days has been mentally taxing. As I said yesterday – going forward and until Primary {2} is conclusively over and done for my approach to playing the downside will be as follows:

  • Play it small (as I have)
  • Only go short at new price extremes in heavily overbought conditions.
  • Wait for the initial drop and then take profits.
  • Wait out whatever new lows might be painted, and perhaps go long (small amounts again).
  • Rinse, lather, repeat.

The name of the game at this stage should be capital preservation in order to stick it to the bulltarts by the end of this summer. I for one will be there and trust me my evil rat minions – I won’t take numbers nor prisoners.

Hope this helps a little to make it through what will surely be yet another frustrating trading session. May the dark force be with you.

12:05pm EDT: We briefly dipped below this trend line – but quite frankly I would be surprised if we breached it today.

Sorry rats – I’m not trying to be negative or anything – but the complete lack of selling pressure has given me a bit of a bullish bias at this point. Any sell off we’ve seen has been more or less ‘condoned’ – the bulls have not been squeezed at all for practically three full months now – consolidations have been sideways as opposed to down.

On the other hand – as I always try to be my own psycho analyst – it’s worthwhile noting that my current sentiment is most likely shared by the few remaining staunchest of bears. Thus, it also means that a bear capitulation should be near – if not today (and we take a loss yet again) it should be sometime in June. And a capitulation by the bears is invariably followed by a significant drop. Yes, the market is a cruel mistress and she has a knack for hurting the maximum number of participants.

12:20pm EDT: I’m not sure what exactly is going on in the bond and credit market today but somehow Curly managed to drop the yield away from his panic line:

Guess I’ll have to mosey over to Zerohedge to get an idea what’s really going on. I have a feeling this was only a first test. BTW, you market correlation traders – let this be a warning to you. TNX down – market up!

And the Dollar = history. Boy, are we all screwed if this turns out to be a third wave down…

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