Too Much Drama

Quite frankly I just about had it with all the fiscal cliff nonsense. Way too much drama for my taste and at this point equities have turned completely spasmodic. Look, it’s the last full trading day before Christmas (Monday will be a half day) and usually the tape is running on auto-pilot squeezing the bears all the way into New Year’s Eve. The fact that we instead are jumping all over the place is very bad medicine and one ought to wonder what comes next – fiscal deal resolved or not. Whether or not the bi-party brinksmanship in Washington runs out the clock or results in some ‘last minute deal’ doesn’t really matter. Uncertainty leads to unpredictable moves and they in turn lead to losses.

Look, I make this very simple for you guys – look at today’s E-Mini chart and ask yourself if you want to be trading a market that paints these types of candles. Make no mistake – until the music stops on December 31st there is a good chance we’ll see something similar again next week, perhaps this time spiking in the opposite direction. I for sure have very little appetite for being caught in the middle of this. Always remember, we don’t have to trade – as a matter of fact, one of the best lessons you’ll ever learn is that of knowing when it’s the right time to act and when it’s time to sit back and let someone else get chased around the block.

Until this thing sorts itself out I cannot recommend any participation on the equities side. Keep your powder dry and simply wait a week until all the media mania subsides and reality takes over – in one form or the other. Until that happens the risk/benefit ratio in equities is simply not justifiable.

Quick update on our natgas play – it now breached its daily NLBL and thus we are long with a stop below. The 25-hour seems to act as support and you can use it to slowly advance your stop. However I would give a session or two until you do as you don’t want to get kicked out early.

Copper meanwhile is painting an inside day just below its 100-day SMA. This is interesting as it could be a last kiss goodbye before it heads lower. Of course a push back above the 100-day SMA would be a failed (downside) breach and thus a long opportunity. In either scenario you can simply play the inside day candle triggers but it’s also possible to be short right here with a stop above the SMA. Hope this makes sense.

Silver has been embracing the pain but it suddenly painting an inside day candle. I’m a bit conflicted on this one – usually I would prefer a long breach here but since we are not at target yet I may also take a continuation lower. Either way I’ll probably play it fairly small. As I pointed out above – way too much drama out there.

I’ll be posting a brief LT update on Sunday and expect to be putting up a Monday Morning briefing, assuming of course there are short term setups to be had.

Enjoy your weekend and try not to get too stressed out about your pre-Christmas shopping chores ;-)

Cheers,

This entry was posted on Friday, December 21st, 2012 at 1:54 pm. Both comments and pings are currently closed.



  • ronebadger

    Mole, thanks for the update…hopefully we will all be around for your Sunday and Monday updates!

  • ronebadger

    VIX at LOW of the day!!!

  • http://evilspeculator.com molecool

    I think we’re going to be fine ;-)

  • http://evilspeculator.com molecool

    Normally I would suggest step one in a VIX buy signal but given this tape I’ll keep my mouth shut.

  • ronebadger

    yeah, today MIGHT be Step 2…

  • BobbyLow

    Thanks Mole.   Once again, you are 100% Correct at least from my point of view.  I’ve been through this stuff enough times to know that I don’t want to be jerked around in equities in what you so aptly called a “completely spasmodic” market.  

    There will be plenty of trains leaving the station after the dust settles.  IMNSHO, there is absolutely no sense rolling the dice on anything held overnight in equities unless you feel real lucky.  I used up most of my trading luck in 1999.  :)

  • Skynard

    Nice channel on the 5 min signal.

  • Schwerepunkt

    http://screencast.com/t/OoLfOekXGaPS

    Pitchfork fits perfectly on USD.CAD daily chart and implies we will test the recent high of 1.0056. I think we’ll do some backing and filling before the next spike up though.

  • captainboom

    Do you have any suggested resources to learn about how to properly draw pitchforks?  I’m aware of them, but know little.  Idle curiosity at this point.

  • Schwerepunkt

    They’re just a trend marking system. Investopedia would give you the basics, or stockcharts. I draw horizontal lines at the recent top and bottom to mark resistance and support. In the present situation, it is likely price will touch the middle fork at the horizontal line of the recent top at 1.0056. Maybe I should have drawn those as well with dotted lines.

  • Skynard

    No Santa this year:(

  • http://dartht.blogspot.com/ Evil_Gerb

    ..back from Xmas shopping and lunch…..and
    oh yeah, glad I did it.
    1422, a joke wrapped in an enigma.

  • AMCabrera

    monday is half a trading day?

  • bdoone

    Another volume hole with black hole gravitational pull.

  • AMCabrera

    @ EG pegging

  • AMCabrera

    I really like the usd/nok the daily chart and hourly chart just brings warmth in my heart.

  • AMCabrera
  • AMCabrera

    a nasty formation in the aud/jpy hourly chart.

  • BobbyLow

    it is for the NYSE – closes at 1 PM.

    I think Forex is probably a regular day but I don’t know.

    I’m closed though.   :)

  • AMCabrera

    no I just checked oanda closes at 1 too

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/39d6cdd3-59c6-4be3-bb71-22bde9c6e59c/2012-12-21_1509.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/26876e47-e0e7-4d63-8be7-593a04094d5c/2012-12-21_1512.png
    very interesting chart. Continuation of sucker move? However, 1410 seems like a natural target. I think the dollar is the biggest winner out of all this. The usd/jpy is not reacting too much to support this idea. But then there is something else that is really bugging me. The pair. It is not moving and has not moved much and in so keeping to the pegging exercises in spx. IMO a break here needs to occur to define if we have systemic risk or just a normal good sell-off that is needed. For example the spx starts to go lower but the eur/gbp hangs out or even goes higher then we have a normal eat your dog sell your moma scare the market moment=buy. The spx goes lower and the eur/gbp starts to skid along with it then I do not see why 1330 would not be hit but first thing is first 1380 will have to be a checkpoint.

  • http://dartht.blogspot.com/ Evil_Gerb

    it’s in the fine print.

    http://www.investmentu.com/nyse-holiday-schedule.html (search for December 24)

  • Curiousmind3861

    AUD really taking a hit today, make new low even when equity is in sideway mode…

  • http://ibergamot.blogspot.com/ i Bergamot

     I’ve been having this feeling for awhile.

  • Skynard

    /ES can’t get by the hourly 25.

  • Curiousmind3861

    almost gap fill in VIX…can it do it today??

  • Schwerepunkt

    I highly doubt it . . . 

  • Curiousmind3861

    it is at 18.1 now and dropping fast, yesterday’s high was 18??

  • Curiousmind3861

    VIX gap filled!! that was fast!!

  • Schwerepunkt

    I was looking at yesterday’s close at 17.67.

  • Curiousmind3861

    oh, I guess I am wrong then, I was looking at the high for yesterday???

  • Schwerepunkt

    USD.CAD still hanging tough. Might be a good long candidate on a pullback to the 25-day at .9908. Of course, that would imply more pain for equities.

  • http://ibergamot.blogspot.com/ i Bergamot

    QID is what i bought to short QQQ.
    Stop? I don’t need no stinkin’ stop, but gap fill is all i prepared to lose.
    Chart.

  • Skynard

    Reversed /ES now for next week. Now short.

  • AMCabrera

    1430.15 priceless.

  • AMCabrera

    I say we have markets close only on weekends. NO holidays.

  • ronebadger

    Missed step 2 of VIX signal by .02….close enough for government work?  But, it is an official step 1, again.

  • http://dartht.blogspot.com/ Evil_Gerb

    Agreed.
    if you think about it, lots of Holidays are national – money is global.

    look at the Russell, pushed up even MORE today, maybe it’s playing catchup.

    http://stockcharts.com/h-sc/ui?s=IWM:SPY&p=D&yr=0&mn=9&dy=0&id=p58015589030

  • AMCabrera

    You know like mole I really do not have an opinion bullish or bearish on equities. In my view ttrying to buy or sell breaks was asking for pegging. Now of course I’m very bullish dollar.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/782b2a6e-e173-4e9e-a65f-24252d475303/2012-12-21_1709.png
    Mmm very nasty formation so far though. One has to assume it is coming down until it can break AND consolidate above.

  • http://evilspeculator.com molecool

    Well, it’s a good question and I would decline this trade for reasons outlined above. Maybe you wind up banking coin, yes – but maybe you wake up and realize you’re dead.

  • http://evilspeculator.com molecool

    Oh please say it it so!

  • AMCabrera

    what you mean?

  • Th3_Acist

    His pay is in dollars, ie he loves your call?

  • AMCabrera

    I figured thats what it was about haha. But I really I think the dollar will do very well next year.

  • captainboom

    Mole, can we get a Daily Zero update this weekend?

  • Skynard

    Does not look like /NG held the NLBL, still long for next week. Mole, did you stop out? How about that volume on NAZ 100:)

  • http://evilspeculator.com molecool

    Will do.

  • Skynard
  • Skynard

    Nice!

  • newbfxtrader

    Been getting more and more bullish past few weeks.

  • http://iberianviews.blogspot.com/ catracho

    yes agree..but some more pain before that..

  • newbfxtrader

    http://www.barchart.com/futures/cot.php

    Aussie kiwi coming off the highs. Lumber still at highs. Maybe we are a tad bit early on lumber.

  • Skynard

    Look at the volume, think it was a squeeze. Short 3 contracts now:)

  • newbfxtrader

    Definitely possible but from  COT perspective you want to see the large specs back off to be confident in the trade. Just like I am confident about the Aussie and Kiwi now.

  • newbfxtrader

    Remember Commercials are short throughout a rally and only start buying at the top. To trend trade you need to follow the large specs. This doesnt work for every market as expected but does tend to work well for FX and some futures. 

  • Skynard

    In general, following the bond market now. Shorts are back 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„¸





    Zero Indicator


    Darth Mole Alerts

  1. poll

    • What is your average spread on the EUR/USD?



      view results

      Loading ... Loading ...


  2. search warrant


  3. recent misdeeds

    1. Introducing Fractal Monger
    2. Scottish Quadruple Witching Alibaba Friday
    3. Friday Morning Briefing
    4. Knocking On Heaven’s Door (Again)
    5. Post FOMC Madness Update
    6. Back With A Vengeance!
    7. A rare but good long setup in equities
    8. This Market Sucks Update
    9. The Other Shoe Just Dropped
    10. The Long Con




  4. yes we can!



    NinjaTrader
    Kinetick