Gutta Cavat Lapidem

Happy Sunday everyone. Before I get to the meat of it all a few house cleaning items:

Things are looking up in the evil lair. In the past month alone the number of subscribers has basically doubled. Maybe some of this can be partially attributed to the change in trend across equities but I also believe that much of it is a response to Evil Speculator 2.0. As some of you remember about six weeks ago I opened a new chapter for this blog by switching to a hybrid subscriber/free format. The essence of this model is that new posts are available to subscribers first but become freely accessible either after the session or a day later.

What I had hoped to accomplish appears to at least to be going in the right direction as we are all a lot more in sync these days and the main focus seems to be centered around banking coin. Our charts are working, the symbols/setups are banking coin, and in general we all seem to have a good handle on the market. The amount of noise has been reduced dramatically and I see many new faces these days – many of who appear to be avid traders, which is very validating. Subscribers and non-subscriber alike appear to enjoy the new format and I myself admit that it’s been a long time since I had this much fun running the place. And as the saying goes – if something’s working don’t fix it. So, expect more charts, more analysis, more trading ideas, more trading strategies and more of the evil flair you all have learned to enjoy – yes, yes, I know – it’s an acquired taste.

To all the noobs who relented and finally decided to sign up: First up, thank you for your business. Some of the things I present may be new to you, and some of it may appear a bit overwhelming. And some of it may appear a bit too technical. If things are over your head I suggest that you start by asking questions in the comment section. Being quiet and not understanding the info will not help you as my goal here is to engender self sufficiency and to help you beat the big cats at their own game. Unfortunately I cannot always be there to answer every question as I only have two hands and two eyes – plus there are only that many hours in the day. But there are several senior participants who will be happy to jump in when I’m not around. After all this is a trading blog and everything I do faces public scrutiny on a daily basis – my analysis is not being handed down like a market oracle. If you have evidence to the contrary – don’t be shy and present it. Finally, if you are really stuck or something doesn’t make sense to you please email me at admin@ and I’ll be happy to help.

To all the stainless steel rats who never ceased to support me in the darkest of times – a huge thank you. I couldn’t have revived this place without you. You know who you are ;-)

Tools And Toys

A quick comment about Rammstein. A few weeks ago I was doing some back testing on Rammstein and arrived at new settings which seemed to be a lot more promising. I however did not want to fall prey to curve fitting and decided to run the strategy in quiet mode for a while to see if the new settings held up. So far so good and I intend to turn the signal back on in a week or two. Please be patient in the meantime – we are at a critical situation in the market right now and that is not a good time to be experimental.

Geronimo has been a bit quiet in the past two weeks but that’s actually a good thing. I also changed some settings a few weeks back and I’m extremely happy with it as it didn’t give us more than two false positives in the past month. As some of you know – Geronimo is a long only strategy and it’s important that it does not fall apart when the trend starts to the downside. And as long as it happily banks coin on upside corrections we frankly don’t care as it’s purely a scalping strategy.

The Zero Lite chart has been slightly modified last week as I added the VWAP indicator on the top panel. Some of you who are familiar with this indicator may understand how that correlation may prove to be valuable as it provides additional context when it comes to intra-day inflection points. I could be more elaborate here but I believe it will be easier to simply keep pointing such occurrences out in real time on the chart – when it matters. I suggest you keep watching the Zero Lite as usual and take notes when I point out certain VWAP/Zero correlations.

Alright – now let’s delve into some charts – I have many:

This week we’ll start with the Euro as I think it’s one of the most important charts right now. It is clear that the FX wolf pack has been calling Trichet/Merkele’s bluff as the €1 Trillion EU-TARP had no effect whatsoever – a mere week after the announcement I might add. Technically however we are now at levels where a bounce must manifest itself, otherwise things are going to get very ugly in a jiffy.

As you can imagine this may have an impact on how next week may play out on the Dollar and equities side.

I posted several times about long targets on the Dollar and that horizontal line is where many stainless steel rats went into cash after having enjoyed a long run up. If you are interested in some of the Dollar calls I made then check out my retracementlevels category where I correlate 2sweeties RLs with my own wave counts.

But this is not the time to chase the tape (is it ever?) and because of continued upside risk this is also not the time to take short positions. Why? Because instead of a extended fifth this could be a third – and if so you don’t want to step in front of a moving freight train. But I think the onus here will be on the Euro – if it falls through the 2008 low we may see the Dollar make fervent strides higher.

On the equities side I continue to follow the fractal situation on the NYSE A/D ratio. Over the weekend I recoded my brand spanking new SuperADRatio over on Multicharts as the TOS data feed appears to have holes and I prefer IQFeed in particular for all market meta-data. The more normalized SuperADRatio reveals several important clues – mainly that the strength of Friday’s sell off rivaled that of May 6th. So it’s indeed possible we will see a continuation of the downtrend, most likely after a little Monday bounce – should it materialize. Although I don’t trade correlations I believe that a Euro bounce may lead to a small counter wave up in equities:

The count has not changed – I still expect the May 6 lows to be breached – possibly next week. A bounce should reverse around the 1150 mark – after 1155 I would get a bit nervous although technically it’s absolutely permissible. We don’t want to see a breach of 1174 – things could get very dicey for the bears if the bulls can get above that. For now there is however no indication that will happen – yet – I will of course keep guys in the know if I see odds change to the bullish side.

Momentum Indicator Roll Call

I introduced this monstrosity a few weeks ago and I’m really starting to like it. The yellow regions mark occurrences where conditions seemed ripe for a bounce. Similar to the NYSE Adv/Decl Volume ratio chart it appears that final lows within corrections are often accompanied by lower prices in the context of higher readings. Thus far we are not seeing that yet, so this indicator is not telling me that the current down move is in danger – again thus far.

Speaking of the devil – I switched the NYSE Adv/Decl Volume ratio chart to a 3-day SMA as we need to be a bit quicker on our toes moving forward. As mentioned above for the NYMO:BPNYA ratio, we are looking for divergences at new lows – and thus far all I saw was a lightning fast snapback after the May 6 low. Although nothing is guaranteed this chart also appears to permit the formation of new lows in equities.

Every week I look at this chart I see something new. I have again highlighted bearish/bullish reversal signals but what’s also interesting are the two fractals I have highlighted. The readings near the March 2009 low and the current signal seem to mirror each other. Let’s see how this will play out – I can’t put too much stock into this just yet. However, the more traditional interpretation was spot on – we got a snap back right at the top of the channel at the May 6 low. There was a lot more room on the bottom and we are not in overbought conditions, even on this quicker 3-day SMA chart. However thus far equities are pushing lower, not higher. This may indicate that we are seeing a trend change here. Or it may simply have been a bear trap and put/short holders will get punished next week. I believe the next three days will be key in determining the tape for this summer.

Supporting Evidence

The JNK to 20-year treasury bonds ratio appears to paint divergences ahead of large corrections to the downside. I failed to highlight the one preceding the March 2009 low, so remember that this applies both ways. What the current reading is telling me is that we are not done yet.

Copper has a very similar read when put into context with equities. Again, it appears that big divergences point towards a trend change or at least that a deep correction is looming ahead. Nothing on this charts looks bullish to me and we’d have to see a big spike up starting next week to change that.

Bottom Line:

The Euro chart is at an inflection point and if it breaches its 2008 low I believe that all hell will break loose in equities. If not then we may see a more complex sideways pattern which I have not accounted for yet in my wave count. Maybe some triangle or double zig-zag – which would be key to discouraging the bears ahead of a final and strong move to the downside. So, either next week will be fun or mind numbing for the bears – it all depends on how things play out on the currency side. Technically I do see the potential for a bullish snap back but my momentum indicators suggest that there is potential for a breach of the May 6 low in equities. My correlations also point towards that scenario, thus supporting the bearish wave count I have presented above. Again, nothing is guaranteed in life and especially not in the markets. It sure feels like a trend change is in the works – but in the end the market has to prove it to us – until then all of this is nothing but lines on charts.

Personally I will continue to hold my long term puts until the market tells me otherwise. As I keep saying over and over again: Don’t worry about the head fakes and intra-day swings. Focus on the big picture – and fade all the noise. I’ll be here with you every step on the way (down).

8:16pm EDT: I forgot to mention this in the afternoon and it’s completely off topic – but I grant myself a little tidbit tonight. Today marks the 50th anniversary of the laser. The date was May 16, 1960 when Theodore Maiman successfully built and fired the first laser over at HRL in Malibu. Which btw is still there today – the facility is located in a fantastic spot on Malibu Canyon Road overlooking the ocean. I pass by there all the time when I head out for a day at the beach. And each time I drive by I remind myself that this is the birth place of the laser – an innovation in physics which changed our century. Nothing in terms of technology you take for granted today would be here without it. Anyway, happy anniversary laser! :-)

Mole

This entry was posted on Sunday, May 16th, 2010 at 5:26 pm. Both comments and pings are currently closed.



  • Gold_Gerb

    first post – gerbils are quick.

  • http://thebhbgroup.com TheBHBgroup

    This post is gold Jerry…Gold I tell ya!!! wow Mole….it keeps getting better and better every sunday….I love the copper and Euro analysis since they are both the leading indicator in this market right now!!!

  • tradingmom

    Mole — thanks again for the great site. I love the new format. Disqus seems to have gotten over last week's problems (for me at least) so I can post. Bloomberg is showing the euro at 1.2351 as I type. Gonna get interesting…

  • amokta

    Evil speculator seems to be dynamic & happening these days!! We should make more use of symbols/setup info you provide. (HOB also seem to be moving to a one site model, not quite hybrid, but sub & non-sub section on same site).

    when do futures open?

  • convictscott

    Fractals on the put-call index. Great stuff Mole, innovation in a world of imitation.

  • gsavli

    futures opened at 0:00 CET and are being pumped up right now.

  • amokta

    thanks – i use barchart.com, which is delayed 10-15 min. seems index futures down a few handles?

  • gsavli

    it opened where we closed, then went down to NQ 1903, now up at NQ 1910, high so far 1911.50.

    E/U 1.2367

  • elliott_surfs

    for those who don't already know – the Thinkorswim platform is free to download and paper trade. when they ask you to fill out info, tell em to eff-off and continue to run the program.
    if that helps anyone =)
    good luck trading this week

  • gsavli

    here's a EUR/USD chart.
    if it doesn't turn right here, the next support is around 1.17

    http://www.uploadgeek.com/share-103C_4BF0655B.html

  • nyse

    Nice post; I am very glad I joined the ranks of the rats. While I come from a different “approach” I find your analyses very helpful, and I am learning about a lot of different things to look at from you and the rat contingent.

    Regarding the Euro, it is worth less than the dollar, IMO, and should continue to move at least toward parity. When this is all done, the dollar may be the “best” one left standing. In any case, the challenge, at least for me, is the fact that nothing moves in a straight line, and the irrationality often present in the market makes staying liquid amidst the moves toward the “true” fundamental value a difficult at times. Moving on…

    Interesting video here; I'd love to hear anyones take on it:
    http://www.youtube.com/watch?v=yzpb5hPkxUk&play
    Here's the summary:
    On last Friday, two large XLF trades were put on -
    XLF June 13-14-15 put butterfly 20k X 40k @ $0.13 (JPM)
    XLF Sept 12/16 1×2 put spread 20k X 40k @ $0.73 (Goldman)

    These are both clearly bearish, long volatility plays of a significant size by two banks that:
    a) have trading desks that made money every day and
    b) make up a combined 9.34% (JPM – 6.1% and GS – 3.24%) of the XLF underlying (which is the Dow Jones U.S.General Financial Index (DJUSFN))

    Now, clearly there are many other instruments/trades that could provide long volatility exposure, however, I find the instrument they chose to be interesting. I also find the timing differences to be interesting as well (i.e., JPM's june bet vs GS's sept bet). FWIW, I put some similar options trades on last week in XLF's bastard son – SKF.

    Any input/comments would be appreciated. Good luck to all of you next week, and thanks in advance for your patience as I learn more about your approach to trading.

  • http://evilspeculator.com molecool

    Quick yes – but I would prefer a chart or two ;-)

  • yudhisthira

    Russell 2000 more resilient than SPX. It is still above the bailout bump from last weekend.
    http://screencast.com/t/YWJmYzNhMGQ

    Looking at these retracement levels. Hopefully SPX is leading the way on the downside and RUT will catch up (down).
    I'll be looking at the Lucy-Charlie Brown scenario for bears above 707 RUT.

  • http://evilspeculator.com molecool

    Very interesting info – thanks for that. I looked at the XLF chart and it looks mixed. Short term it seems to be completing a drop – how far I don't know. Long term it has given up a lot lately and the ideal time to get in on the short side was a month ago. But if firms which continuously beat astronomical odds are trading it down I would not get in the way ;-)

  • Gold_Gerb

    why? so i can be mocked and spit upon, i think not!
    ;-)
    may20/21 – keep you eyes open rats.
    http://ttheory.typepad.com/.a/6a00d83455c65c69e

  • momac

    I really appreciate your posts Mole. Having an idea what is in store calms me so I don't make snap decisions that are wrong.

  • yudhisthira

    Used to have cousins in Malibu when that laser fired.
    Ten miles down the coast is Lake Shrine on Sunset Blvd.
    Good quiet place for recharging the mind.
    http://screencast.com/t/YTk4ZTJlMG

  • ArtyomGrand

    Nice..i am trying that right now!

  • yudhisthira

    Euro trying to tag 2008 low without going through it.
    Working so far.

  • ArtyomGrand

    Agree..me too…much appreciated.

  • WTFed

    Asia selling off.

  • http://trading-to-win.blogspot.com/ DavidDT

    some hot chicks with nice music
    http://www.youtube.com/watch?v=5K5QD6Eulig

  • yudhisthira

    Whoops. Small breakthrough. Fake out?

  • http://trading-to-win.blogspot.com/ DavidDT

    TOS dermo kodga volume visokiy

  • yudhisthira

    whiskey? ha.

  • yudhisthira

    Evening decline tiny compared to last Sunday's pump.
    Can we do better than this?

  • ArtyomGrand

    David, chto za TOS? Kogda nabirau niche ne vihodit :(

  • ArtyomGrand

    Outstanding, although no guarantee that we will tomorrow too.

  • Gold_Gerb

    10,490 ouch.

  • http://trading-to-win.blogspot.com/ DavidDT

    think-or-swim=T-O-S

  • roscoe_casita

    Silver Chart: http://goo.gl/wiJu

    So we've gaped above an old high, made new highs, gaped again. Filled the top gap, on the bottom gap, we rallied off the old highs, a Textbook Break away gap.

    Further strength & new highs in silver will lead a challenge of the old highs above 21$ (already happened in EUROs.)

    My position has been to Buy physical OZ for delivery. And buy Puts against SLV as insurance against a collapse in price. 5% insurance cost against the position to make a Delta Positive above 18-19$, and neutral below 17$. I will cash out puts on a serious decline again to buy more physical and re hedge.

  • roscoe_casita

    We've also found support on a rising top line trend line, as bullish as they come.

  • roscoe_casita

    Wow

    Shanghai
    Hang Seng
    Nikkei

    all got the major shaft: http://goo.gl/zLan

  • ArtyomGrand

    A-a-a-ah :)

  • skynard

    That's disturbing DDT!

  • Long_John_Silver

    Absolutely – it's good to be onboard for a lot of reasons .. one being I'm never that sharp at 6:30 AM anyway -

  • Long_John_Silver

    That drive west from the 101 through Malibu canyon is one of the most beautiful in the west, a favorite of mine and my daughter since she was 2 while en route to the state beaches north of Trancas .. now we have a new landmark and a bit of science to discuss, no doubt while listening to a CD in the car – thx for the post – ljs

  • http://evilspeculator.com molecool

    Starting today there should be a new plaque at the entrance of HRL for everyone to see.

  • http://evilspeculator.com molecool

    Neither am I – life as a trader on the West Coast.

  • http://evilspeculator.com molecool

    I'm not sure about that one yet – let's keep an eye on it. But in Feb/Mar 2009 there was definitely a disturbance in the force.

  • convictscott

    Roscoe, In the nicest possible way, thats not a silver chart :) Its a chart of the SLV, there is a big difference, and you are getting a very distorted view. Look at the chart of physical silver or the front month SI N0 futures contract, and you don't see the same gap. SLV is an *approximation* of silver, not the price of the real deal.

    Gold made new highs (unable to hold them) on Friday, which was unconfirmed by silver which did not make new highs. This is a mini-version of the dow theory non-confirmation, a canary in the cage that after a parabolic run up, the metals complex is stinking of dodge.

    IMO a failed retest of the high of 13/5 is a high probability short

  • Tronacate

    This could be one ugly monday. The whole world is coming unhinged. Has there been any run on European banks yet??

  • roscoe_casita

    I'm always looking for reasons as to why I'm wrong =)

    Very true on SLV not being the price. I still see a gap on all silver futures: http://screencast.com/t/ZjViMjJmYTUt

    Gold in USD has been following Gold in Euros; Silver in Euros is above last years highs, i'm obviously betting on that =).

    I've got it in my mind that those gaps can do a few things:

    1. Turn into an Island top reversal, a bearish development indeed. Selling off to 18$ an below.

    2. Make new highs turning the gap into break away gap. Very bullish.

    3. could churn and close the gap over a few days?

    If it becomes an island reversal, I'll start hedging more aggressively indeed.

  • bananaben

    Great stuff Mole – 75% short as of Friday – sold some TZA at Friday's high – this bear is just might be getting better at the game!

    Took a trip this weekend into the Siskiyou wilderness on my mountain bike. Saw four beautiful bears – one momma with cubs (did a 180 on that one) and one big male (all black bears). Thought that was a good omen for the week ahead! By the way, here is what happens to stupid bulls when they screw with a bad ass bear:
    http://www.southeasternoutdoors.com/outdoors/ur

  • bananaben

    Thanks for sharing – might add some FAZ at the earliest opportunity! Something tells me we are going to retest 1050 ish in the next few weeks.

  • standard_and_poor

    Most TNA longs were initiated on last Mon. open at about 54.64. Currently 95% long (ouch). Raising stops to 53.22 (stop on close) on 45% of position and to 53.05 stop on remaining of 50% longs. Will re-examine possibility of re-entry into a 95% long position near 50.26 if stopped out tomorrow. Still expect new highs into next year but possibility also exists
    of an abc zig zag from 4-26-10 with the hard down c phase having started 5-13-10; then again if per chance the market closes in the green tomorrow (unlikely at moment) I'd say we're still in an impulse wave up.

    We shall see, I'll trade either direction.
    5-16-10

    Listen to how one line turns into a lyric:
    http://www.youtube.com/watch?v=uzrPiYbyNVQ&feat

  • http://evilspeculator.com molecool

    Nice! I saw a few bears in Sequoia a few years ago – quite an experience!

  • http://evilspeculator.com molecool

    SLV just like GLD is not even backed by real gold reserves..

  • raised_by_wolves

    Me three. That's why I sometimes pull all nighters and don't go to sleep until after market close at 1 PM.

  • raised_by_wolves

    Mole, what do you think? When the general public realizes that SLV and GLD are the fraudulent schemes that they are, will puts be worth (1) a hell lot or (2) nothing at all due to options ceasing to trade?

  • katzo7

    Bears be careful here, my indicators call for a gap up Monday morning and some PITA movement to the upside before the next fall occurs. In overnight action already we have moved from a low of 1120.50 ES to a high now of 1133.25, a good 13 points ES.

  • spicestory

    thank you for pulling me out of the cave, thought it isn't for freeloader ;-)

  • raised_by_wolves

    Question is, will EUR/USD bounce or break here?

    http://content.screencast.com/users/raised_by_w

  • Long_John_Silver

    Lo 122.71 rebounded to 123.8
    1:30 am PDT

  • chronographics

    Its a bit tricky here – there were some calcs to show a possible good bounce from 1.2230/50 but really it has struggled up so far. Have further downside targets at 1.2150 and 1.1650 but its hard being in such a crowded trade. I am keeping it small and tight – as the actress used to say

  • katzo7

    Tim Geithner was seen throwing up in the White House bathroom Friday as he watched the market tumble on his iPhone. This was just before a meeting with Obama about fiscal direction. The restroom attendant, after seeing this and while cleaning it up, tried to explain how it was really risky to try and fix gov. debt by adding more debt. The attendant also mentioned something to the effect that he could not understand why the banks were rewarded with cash after creating one of the biggest fiscal crises in history. Geithner looked at him and said, “but you are just an ignorant janitor, wtf do you know? Trust me, it will all work out.” After that Geithner went out for a 4 course lunch with his old boss Lloyd and a low level gov. worker. The gov. picked up the check.

  • katzo7
  • amokta

    Asia/autralia significantly down. So how come FTSE/dax up. Also US futures slightly up.
    How can this be?

  • katzo7

    PPT.

  • amokta

    Indeed :-)

  • katzo7

    ES support becomes resistance now, ST (1138.50). Compare to earlier chart.

    http://www.screencast.com/users/katzo7/folders/

  • Bob the Horse

    European equities are cheaper on a relative basis than they have been for year. A weaker Euro is positive for most companies in Europe. I would not want to be short Europe equity markets. So I am not.

  • momac

    Good Morning everyone. Someone was working very hard last night. Went to bed with es down 13 pts or so and gold up 12. I wonder, can they keep all the plates spinning today

  • Gold_Gerb

    plates spinning, I like it.
    Look at the EUR/USD – 1.24 and ready to bolt and fill that gap around 1.25ish.
    let's see, strong EUR, weak USD = positive lift time.

  • Kudos

    Copper just took a big nosedive, down around 3% now. Ominus

  • BobbyLow

    Mornin folks. Not only Copper but Oil struggling too. Like to see Oil break 70. Has another .80 to go. Gonna be a struggle today.

  • Kudos

    Yes but copper was on the 200d MA and today's move was a move from the 200 down 3%. Oil was below the 200day last week and it is also a more manipulated market.

  • BobbyLow

    Agree on Oil being such a manipulated market. The way they have been able to push prices up with absolutely no relationship to demand is beyond belief.

  • http://www.mylifemytrade.com MyLifeMyTrade

    As indicated on Friday, we did see 114x after some fun last night.

    The market did reveal its cards last night. The best short was RUT/IWM/TF – it really went up…

    Whenever IWM goes up like this in bearish context, that day has a major down move. So, I will say that we will see 1107 today.. And then a much larger bounce to 1150 will ensue for remainder of the opex week.

    Strap your helmets and tighten your seatbelts friends.. the ride is about to get bumpy :-)

  • Kudos

    Or the right people have all the protection and they want to fleece the retail put sellers.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Folks… go back and see what happens when IWM gets a spike like today's in a bearish context. The day is a bull massacre.. absolute merciless massacre… May be today is different.. but this game is not about right or wrong.. it is about probabilities IMO

  • Bob the Horse

    I thought you dealt in certainties?

  • http://evilspeculator.com molecool

    :-)

  • Onorio

    Hey Rats! Back to the party :)

  • roscoe_casita

    $UVOL < $DVOL That IS Different from all the other mondays btw.

  • roncofooddehydrator

    Do you know if there is a way to do $UVOL-$DVOL in prophet charts?

  • Onorio

    Now short EURJPY @ 114.30

  • roscoe_casita

    ($UVOL-$DVOL)

    If you've got any */+- symbols, surround with ()

    (Thanks to the person who told me that awhile ago!)

  • roncofooddehydrator

    Thanks!

  • amokta

    ok. whats going on, who's buying what, and whats the bottom-line
    (ive been in meetings all day)

  • http://evilspeculator.com molecool

    Yeah – one feature I really like about Prophet charts. Before that I always had to write an extra study/indicator.

  • roscoe_casita

    I personally like to have $UVOL & $DVOL along with $ADVN & $DECN in their own separate windows on the flexible grid.

    Because $UVOL-$DVOL can be right around 0, like right now, even though both $ADVN & $DECN are increasing, just that $DVOL is increasing more.

    And there is a difference between a Dropping $UVOL and an increasing $DECN and vice-versa

  • http://evilspeculator.com molecool

    Just fell out of bed (caught a cold and had a horrible night). I'm just watching here – not the time to buy. Will run my scanners after breakfast.

  • nyse

    Good points.

  • Onorio

    Hey Mole, little question if you`ve time to answer…

    When you take a position based on the 30m BB reversal, what`s usualy your target?

    Tks.

  • http://evilspeculator.com molecool

    Hey – how about this then: (($UVOL – $DVOL):($ADVN -$DECN))

    Or make the last part $DECN – $ADVN and look for inverse readings.

  • http://evilspeculator.com molecool

    I often use retracement levels or pivots for that. It also depends on the strength of the breach – but in most cases I simply look for prices to make it back into the BB.

  • roscoe_casita

    Aye, thats the Arms index right?

    I don't have much luck on that , i actually keep all 4 open at the same time: http://goo.gl/IGiN

    Its a bit of room, but its way easier to see the whole market, imnsho, as you can see if buyers are exiting, or sellers increasing, ect,

  • http://evilspeculator.com molecool

    LOL – you are right – that is pretty close – didn't realize I reinvented it :-))

  • Onorio

    That`s when we close way outside the BB, but by the signal what targets do you use? After a close outside, a close inside and a close higher of the previous what targets do you use? IF you use that setups…

  • http://evilspeculator.com molecool

    A close inside – and if I can I try to pick a pivot nearby. That's it.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Market did reveal its cards last evening… It is showing up now… No fake boucne at 1124es IMO

  • http://evilspeculator.com molecool

    Close to Friday's lows now on the /ES – if we breach that the fun begins.

  • Onorio

    Well im trying to develop better target points trading with BB and i appreciate your help, tks again.

  • roscoe_casita

    Just read about that a few nights ago lol! But the confusing part for me was how it could spike in either direction, and hover there.

    I like to keep quite a few market indicators open on the Flexible grid (Awesome that!)

    $TICK
    $TRIN
    $ADVN
    $DECN
    $UVOL
    $DVOL

    VIX
    /YG
    /SI
    TNX
    /DX
    EUR/USD
    USD/JPY
    O

    If there is a big move lined up, it shows up on the majority of the charts

  • Onorio

    This is why i love to trade EURJPY…70 pips in less than 30m :) this sucker moves fast!

  • amokta

    Thanks. Hope your cold improves !

  • lululopez

    @Kudos — Copper now down 5%.

  • mrBozo
  • Kudos

    Has copper ever been down 6.4%? Something is seriously going on

  • Bob the Horse

    Yes – it's called a bear trap.

  • amokta

    FTSE turned negative late in day to close red, (probably in sympathy with US). This is surely a bEErish sign of P3 (or at least that some more correction is to come)

  • amokta

    I thought those were outlawed, due to Animal cruelty regualtions

  • Kudos

    Still mostly long? I think we are due for a bounce sometime but I don't like catching falling knives

  • amokta

    silver – bit of a deeply-dippy move

  • roscoe_casita

    Whats the limit locked down #?

  • roscoe_casita

    Fireworks are getting ready to start

  • Bob the Horse

    I am long and have been getting longer today. But I am almost entirely in European exporting companies who are loving a weak Euro. My hedge is the Estoxx future which is a financials dominated index which I have been gradually buying back over the last few days as I fear a banks squeeze. I have lost a decent chunk of change in last couple of days, about 1/4 of my mtd P&L but that's life.

    FWIW, European stocks are the cheapest in the world right now, just as a lot of them start to get earnings upgrades from a weaker currency. And ownership (as % of global portfolios) is at multi-year lows. So you have valuation and ownership relative lows, with earnings momentum relative high. No brainer to be long these stocks.

    Still not long any european banks but i wouldn't want to be short them either.

  • BobbyLow

    The day is a long way from being over but like I said on Friday, one of these days, Mondays will no longer be a guaranteed up day.

    Sometimes a simple explanation is best and that is a trend will always work until it doesn't work anymore. :)

  • roscoe_casita

    Someone just shorted the everliving shit out of the market, massive $TRIN spike.

  • roscoe_casita

    Silver Morning Star on 10 min, also WAY outside the BB bands, closing inside @ flat soon.

  • centerline

    I just turned my monitors upside down. Now it feels like a normal Monday!

  • BobbyLow

    Through Friday's Lows like Butter Mole.

    Could actually be a “Happy Monday”. LOL

  • Onorio

    Now that was FUNNY! :D

  • roscoe_casita

    Advn:decn is now 1:5

    u:D is now 1:10!

  • http://www.portfoliotilt.com PortfolioTilt

    At this point, it is looking more and more likely that we will at least pullback to the 200 day moving averages across many of the major indices. The NYSE Composite is already there. The NASDAQ, which has been quite resilient as of late, will probably reach this level as well. Also, do not forget that we have an intermediate cycle high at the end of this month so tread carefully folks! Long-term we are still up, but do not fight this intermediate-term correction http://portfoliotilt.com/stock-market-analysis/

  • http://www.portfoliotilt.com PortfolioTilt

    So true, “bullish Monday”, at least for today, is a total wash.

  • amokta

    Schwarzer Montag?
    Perhaps too early to call

  • http://www.mylifemytrade.com MyLifeMyTrade

    Done for the day IMO. 1107 comes after opex

  • http://www.mylifemytrade.com MyLifeMyTrade

    Agree things MAY change by the time day is over.

  • http://www.mylifemytrade.com MyLifeMyTrade

    The strength in european markets last night was telling… I think the only reason we went down after that strength was some unfinished business from Friday…

  • Rayden

    Hey Mole – shorted at 1170 ES per your setup, cover soon or wait? Maybe cover when the gap is filled at 1108? I also think we are going down a lot lower in the long term but I expect we may see 1170 again first (analogy with 1930 bounce).

  • http://www.portfoliotilt.com PortfolioTilt

    Come again?

  • nyse

    Check it: http://www.businessinsider.com/morgan-stanley-f
    What do you think?

  • nyse

    Is there any way to have different versions of the same chart in Prophet? For example, if im doing a long-term analysis of SPX and adding notes, is there any way for those not to show up on my “main” spx chart? Sorry if this is unclear…

  • BobbyLow

    Thanks for the comments on Lite Mole. Also the VWAP looks like a great addition.

  • spudthorpe

    ES bounced off a trendline around 1113, and it looks like we may have 5 waves off the 1170s top. I already covered at the trendline hit, although I agree there's a reasonable chance we hit that 1108 gap fill.

  • http://evilspeculator.com molecool

    Forecast now accessible to non-subs – please reload page!

  • spudthorpe

    Schwarzer Montag is “Black Monday” in German.

  • http://evilspeculator.com molecool

    Rayden – sorry, but I cannot give trading advice. I can only point out my own setups and analysis.

    Having said that – I would look at my Zero comment which is pretty clear on what *I* am doing.

  • gsavli
  • Rayden

    i see on possible count as 5 off the 1170s ending at 1120ish in overnight trading. which would put is in whatever the next wave down is.

  • amokta

    Some of the high-beta's (HTZ, MGM) are now around the may7th price territory.

  • Rayden

    I think that bailouts accompany tops or brief sharp rallies during a crash. Bottoms happen when it looks like things are just going to hell and will continue to get worse ;) Also, QE in the UK resulted in bonds dropping as people read it as a sign of weakness, it's not a mechanical system.

  • Rayden

    Mole – thanks, and I understand, sorry if the question was out of line. Where is your Zero comment? (and do I need to subscribe to that ;)

  • http://chartsandthat.blogspot.com/ ultra

    Yep – line in the sand is holding, but it's not looking too convincing..

  • http://www.mylifemytrade.com MyLifeMyTrade

    Seeing more confirmation that the downside may be done – momo names are pushing up harder now.

  • http://chartsandthat.blogspot.com/ ultra

    Afternoon/evening (morning?) folks.

    Found a floor around SPX 1120 – the 50% fib from the 2007 top – and HOD is currently the 5-day SMA. Kinda boxed in then, but which way will it go?

  • roscoe_casita

    K, shorts looking like they just covered, $TRIN on a down spike, $UVOL is doubled up, We've got knife catchers.

    Look for $DVOL up moves & $TICK down moves for another wave of selling to start.

  • amokta

    GMCR looks like it needs some caffeine

  • http://chartsandthat.blogspot.com/ ultra

    In honour of the lay-zurrrr's 50th….

    http://www.youtube.com/watch?v=Nh5Lh-tTSZQ

  • http://evilspeculator.com molecool

    DUDE, I was looking for that clip forever – wanted to use it in the past. Excellent :-)

  • LilSpaniard

    Mole- appreciate your comments on Zero. They are very helpful

  • http://evilspeculator.com molecool

    Yeah, that does not look good at all – I closed my position this morning with tiny profits. May hold here but the beauty of the setup is gone.

  • http://evilspeculator.com molecool

    I hope they are not distracting.

  • roscoe_casita

    Does anyone know where I can find a “Historical – What did gold buy you?” kind of information?

    I'm interested in the actually amount of goods you could purchase for your gold, i.e. 35 $ gold bought alot more if the $ was worth a lot more.

    I can get Price charts easy, I guess I'm looking for a 'value' information.

  • momac

    I agree. :-)

  • http://evilspeculator.com molecool

    From what I recall the buying power of gold has actually remained quite stable over the past two centuries – remember reading an article about that way back. I could be wrong however – will let you know if I find that info.

  • Count_de_Monee

    You are correct Mole. If I recall correctly gold has always held the same purchasing power. ie. whatever clothes you could buy with a few grams of gold thousands of years ago is what you'd be able to buy today. Like a nice suit or something.

  • roscoe_casita

    What about when gold was 250$ oz?

    I think the last 20-30 years have been a massive plunge in the 'value' of gold, and just beginning to see that return now.

  • http://evilspeculator.com molecool

    Yeah, that's what I recall. Which is why it doesn't matter how much your gold is worth in Dollars. In an emergency situation it is *real money* that can buy you food. Unless of course we're heading to a Mad Max situation – then guns & ammo are your best friends ;-)

  • http://evilspeculator.com molecool

    We are talking on average – there are surely deviations from the mean.

  • roscoe_casita

    Aye, I heard during Weimar 1 oz of silver would keep you feed for a month, and 1oz of gold would buy a city block, far over valued on the opposite spectrum.

  • Rightside_ot_trade

    for day to day practical use, her is something on the value of a silver dollar, or rather hte lack of value of a one dollar federal reserve note:
    from 'inclined to liberty' by lou carabini (inclined to liberty.com)
    “I began a recent presentation before a large group of cattle producers (R-CALFUSA) by showing a paper dollar bill and a silver coin. The words “one dollar” is inscribed on both the coin and the paper, yet the paper dollar will only pay for about one quart of gasoline at today’s prices, while the silver dollar will pay for well over five gallons. I explained to my audience that consumer prices are not high – the paper dollar has lost most of its value. It makes no difference how high the price of gasoline goes, a silver dollar will continue to buy gas for 20 cents a gallon, exactly the price gas was during the Great Depression. Based on 1940 prices, a paper dollar is worth about two pennies

  • roscoe_casita

    Aye, Most of my holdings are now in silver & gold, Physical.

    Trying to find reasons I'm wrong, I've hedge myself already. Not sure what comes next. I'd like to see the price of silver moving above 2008 highs, like it has in Euros.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I know I am the one who had been touting for 1107 for days… But the way ES behaved around 1124 today and how it bounced off from 111x area is very telling

    The message being telegraphed is LOT more downside ahead.. BUT only after a gigantic opex spike up…. The sentiment is soooooo extreme in euro that if it bounces shorts could be in a world of hurt…

    Being late to the party is okay.. but being late and then overstaying – well that calls for punishment… Shorting the breach of 1124 was okay today. But the key was to recognize that one was late to the party and hence had to cover early.

    FXE is sporting the strongest intra-day RH bounce over the past week or so… not to be underestimated.

    On Thursday, I wrote that when EUR/USD took out its swing low, it was ominous… and we did get a meaty slide down to 111x…

    The sentiment is too bearish.. and it is opex week. Go look at the put and call OI in SPY for the strikes 112 through 116.. Do you think MMs will want SPY to expire anywhere between 112 and 116????

  • http://www.mylifemytrade.com MyLifeMyTrade

    Everyone was looking for 1180 on the previous bounce.. Guess what we may get 1180 this time :-)

    1140es is almost given… 1162es is very highly likely (high volume node). Spikes like this go much further than most anticipate… so 1180 could well be on the cards :-)

    When greece makes the payment later this week, everyone will rejoice.. What people dont' realize is that.. greece payment is more like: You owe me money.. but cant pay .. so I lend you more money so that you can pay me interest on the original loan and I rejoice this – LOL

  • amokta

    gmcr – i have sept 10 puts held from late feb (pps then at -83). my problem is not knowing when to sell, and then making a loss by holding too long!
    baminvestor.com (he's almost in the same league as Prechter in being 'early') said they could go to 30 quickly!

  • Kudos

    I actually got alot more long in the last hour, but i had added alot of shorts this morning that I just covered.

  • Kudos

    Oil recovering, 10 YR yields back to even, Copper recovering, currencies recovering. Bob you may be right on with the bear trap. Think its time for a half day to 3 day rally.

  • Onorio

    Bounce in, dump out!

    Short AUD @ 0.8740

  • http://www.mylifemytrade.com MyLifeMyTrade

    Open mind: we are still in the critical range on ES.. If any breakdown must come, it has to come from here.

  • Rightside_ot_trade

    excellent! yes, not sure why recently it has not broken it's previous high.
    the bags of 'junk' silver coins ( pre '64 of various denominations) could be useful if things were to go Wiemar.

  • roscoe_casita

    ./nod

    Not something I jump into or out of. I expect to never use them and have shiny bits to look at. Thats actually what I would prefer. But I'd rather be prepared then not.

    I bought the puts so if JPMorgan tries that shit again, I'll double my holdings and buy the puts again.

  • http://evilspeculator.com molecool

    Hey, what happened to TIVO?

  • roscoe_casita

    Lost some kind of lawsuit.

    WOW thats a massive island reversal!

  • Rayden

    MLMT – interesting points, I broadly agree with your market outlook. Too bearish right now, a bounce (short covering in euro + opex + correlations), a marginal high above 1170, and down we go again.

    One minor quibble… SPY options is a small market, relative to SPX and ES (about 1/10th the size). It is probably mostly retail, I don't think anyone big trades it except for small position adjustments and the like. Where is max pain for SPX? Don't know, but will calculate it in a minute ;)

    FWIW, shorted at 1170 thursday, covered at 1128 this morning, reshorted at 1134, covered at 1121, I'm out for now. I would go long now with a target 1170-ish, except (a) I have a cardinal rule to not trade against the main trend, and (b) there is no reasonable stop on the downside. buy stop 1055 limit 950? lol.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Agree no trades against the trend esp downtrend.. The bottom can fall out any moment.. You could enter a trade AND then place a stop.. The 2 sec delay there.. and kaboom… no point going long in intermediate term bear trend…

  • http://www.mylifemytrade.com MyLifeMyTrade

    More and more indicators pointing to BOTTOM is in.

    And I just checked – the bulls just turned the nitro-boost on… Bulls are out to establish that “down moves are swifter than up moves” a MYTH

  • Kudos

    I think the zero paid for the month today. Felt like I was going to cover sooner or later but I learned last time to listen to the writing on the wall (or the zero feed in this case). Just did a nice flip an hour ago from uber bear to pretty long, will re-evaluate tomorrow

  • nyse
  • n2thezonez

    Your thought is similar to mine.

    The front month SPY, near the money OI shows greater than 2 puts for each call.

  • n2thezonez

    The lawsuit that they won, creating a mega-pop in the stock a while back….. it got reversed on appeal.

  • n2thezonez

    Big boys may not be on the buy side of those options, but they are likely the ones writing the options. With a 2 to 1 OI spread, in favor of puts, a market rally would certainly benefit whoever wrote those options.

  • amokta

    based on may 30th 2008 bounce, i dont expect to see a bounce beyond 1131
    (please dont rely on my advice!)

  • Rayden

    roscoe – check out these:

    http://www.amazon.com/Value-Dollar-Prices-Incom
    http://www.amazon.com/Value-Dollar-Colonial-Civ
    http://www.thepeoplehistory.com/
    http://www.infoplease.com/ipa/A0873707.html

    You know the price of gold in dollars for each of those years already, just convert dollar prices to gold prices and voilla!

    Please share what you find. I think (without doing detailed research) that most *stuff* esp food and manufactured goods are cheaper in gold now than before, and labor and real estate are much more expensive.

  • roscoe_casita

    Thank mate, I'll do some digging =)

  • lilme

    Please provide more concrete details for your opinion. We are here to learn, not to cheer. Thank you.

  • elliott_surfs

    I actually find the concept simple and true – if you believe that Fear/Panic outweighs Greed, that is.

  • WTFed

    disqus bites

  • http://evilspeculator.com molecool

    What's going on?

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

    For like an hour now…

  • Scoops

    That's true. Back in the day one could buy a fine suit and a pair of shoes for an ounce of gold. Today, one can buy a fine suit and a pair of shoes for an ounce of gold. Read that somewhere.

  • Bob the Horse

    there is stuff in the bible about the cost of bread in gold which is broadly similar to today.

  • http://www.portfoliotilt.com PortfolioTilt

    S&P 500 prints Long-legged Doji for the session





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