Volakility

Let me apologize in advance for any system or iPhone melt-downs that may occur as this is going to be a veritable browser buster, we have a lot of charts to dig through today. Since it’s a brand new year and all and I promised Mrs. Evil to hit the marketing drum I’ll make this a freebie, so leeches rejoice! Anyway, I’m seeing possible signs of volakility on the horizon. In case you wonder – yes, it’s a made up word of mine (I have many) describing the possibility of a volatility trap. For the uninitiated let me elaborate a little:

Let’s start with the easy stuff. First of all we are now once again scraping a pretty well established diagonal support line. Which doesn’t mean we have to turn right here today or tomorrow but you want to ask yourself. Do I feel lucky? Well, do you punk?

Now here it gets a bit more tricky but bear with me. This is a ratio between the VIX and the VXO (a.k.a. the old VIX). The latter measures mostly at the money option volatility where as the former covers the gamut of the option chain (simplified explanation – Google is your friend). That drop today is making me a bit nervous and so it should you.

The more long term view also reveals that we enjoyed a pretty steep spike above the 2.0 BB yesterday. So a drop today is not a big surprise and that opens the possibility to a short term shake out. You have been warned.

Out of fairness – long term we seem to be okay as market makers don’t seem to be nervous about the next three months ahead. I beg to differ but need to go by the charts for now.

NYSE advancing vs. declining volume – also a pretty steep drop since yesterday – let’s see where she ends up today.

As I said yesterday – there’s not much to hang our hat on right now, except on a short term basis where it seems that the 25-hour SMA is providing support. As long as it stays that way I’ll be your huckleberry…

Before we get to the setups a quick update on sugar. Some of you may have followed me into that short trade yesterday and if you did then please send me a picture of the big grin on your face right now. Anyway, I would recommend to start scaling out here for obvious reasons.

Forex:

Cable looking interesting as it may hold here on the 25-day SMA – I would be long on a breach of that 100-hour SMA however as there’s not much to hold on to yet. Not interested in a short here right now.

USD/CHF – simple, a long with a stop below today’s low as the SMA is still falling.

The greenback is now approaching a daily inflection point (yes, again). Most likely it’ll fail us usual which is why I’m short with a stop above. But if I get hit by lightning in my evil lair, or less likely, it manages to crawl above the 100-day then I’d be happy to get long.

Stocks:

BIDU – I’m waiting for a touch of the 100-day SMA – expecting turbulence there.

CLF – long if it holds the 25-hour SMA. Possible support on the daily side, bummer I missed that breach. Would be great to get a retest, so if we go down a little we may get a second opportunity.

FB – hate the company but love the setup. Possible long here with a stop below the 25-hour.

CHK – used to be one of my favorites in my stock slinging days. Great long here with a stop below the 100-hour. Short of course on a failure. There will be blood near the daily NLBL, so be prepared for that.

NOK – long with a stop below the hourly SMA. Play it small here – it’s a jumper.

DECK – inside day. Please check the cheat sheet on how to trade those if you don’t know.

Commodities:

Crude – I’m long here with a stop below the 25-hour SMA. With some pixie dust it may hold that vertical support/resistance line on the daily. Yes, short on a failure – of course!

Gold is officially a short now – stop above the dropping 25-day SMA. I am prepared to go long if we run back up. A breach of the 100-hour SMA would be confirmation for the bears.

Inside day on silver – a breach of either trigger line tomorrow may actually show us the direction for gold as well. At least in theory, but it seems to be attempting to build a floor here. I admit that prior ID’s have been less then perfect. But we keep trying.

Last but not least – bonds!! I actually was looking at a reason to long ZB but couldn’t find any. The ZN however has a NLSL which it may overcome if we see a bounce (big if – I know). Anyway, it’s a great setup if we see that scenario – until that happens be patient as we may see downside continuation.

I’d call this a pretty solid kickstart for the new year. Have at it but keep it frosty – obviously things may take a quick turn out there if my paranoia turns out to be justified.

Cheers,

This entry was posted on Thursday, January 3rd, 2013 at 1:46 pm. Both comments and pings are currently closed.



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

    first leech!

  • http://evilspeculator.com molecool

    indeed…

  • ronebadger

    From Skynard’s post – right to the chart

  • ridingwaves

    Mole’s timing is amazing…

  • Curiousmind3861

    wow look at dollar flies!! 

  • itslance

    Awesome post!  Thanks for the stock setups!

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

    Wonderful post!
    I actually started a position in FB few hours ago. Hopefully it will come down somewhat, so I can add. Didn’t post it here, thought stock like that is not something for distinguished rats.
    Also started CG, TSLA (may be stoped out soon) 

  • Skynard

    Flipping /ES 54.75 now long, fat lady still singing:) Not ready to drop this thing yet.

  • BobbyLow

    Here is the BS Du jour (Highlights of the Fed Minutes) 

    http://www.bloomberg.com/markets/economic-calendar/

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

    Looking at SIL. This reaction is about right, if/when it will stop falling.
    Also looking at grains. Corn, soy, wheat via JJG if it will ever stop sticking to lower BBands, or may be Mr Mole will find a setup I don’t see
    (casting the bait… leeches at ready)

  • Joe_Jones

    “But if I get hit by lightning in my evil lair, or less likely, it manages to crawl above the 100-day then I’d be happy to get long.” LMAO! I love the odds. ;-)

  • http://evilspeculator.com molecool

    That was something, wasn’t it? Happened pretty quick as well and I barely managed to flip positions.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/a8858ba8-66c3-4db1-8e52-a26b5b599420/2013-01-03_1514.png
    I just walked in I really like that my two quarter lots were triggered. The GBP/JPY was so fast that I really wish I did not have a take profit set lol it was just like when I was stopped out. Anyhow very good all I have is this and my usd/nok longs. The two above are sell orders and are only quarter lots.

  • AMCabrera

    thank you very much mole!

  • Skynard

    Tried another long @ 51. That dollar is relentless today. Wow!

  • ridingwaves

    have to love how the fed says no more bond purchases after 2013, dollar soars, commodities beaten   down, vix remains flat and its a year away…then they will print more…

  • Skynard

    They have to, no other way around it.

  • AmazingLarry

    Narrowest weekly BB squeeze on Bucky since June of 2008 on my charts. P&F still showing bullish PO of 103. 

    Oh, and incase anyone tries to tell you commodities esp gold will sell off cause the “dollar is strengthening” show them this chart and then punch them in the face. Gold since 1993 with bubbles highlighting every time the /DX hit 80. I stopped counting at 10.

  • Skynard

    Was thinking the same thing, gold/silver should explode with equities sell off. Currently seeing weaknes now with that dollar strength, but things have a tendency to change quickly:)

  • http://www.facebook.com/gerhard.maritz.5 Gerhard Maritz

    that was a marathon post.
    I am short SPX
    too long to read got sleepy

  • BobbyLow

    Yes but most importantly, the “Market” has a memory span of a 6 Week old infant.  Therefore, I doubt that any of this will matter tomorrow.  

  • BobbyLow

    I just Zapped a Troll.  

    On the Trading Front, I’m still long Oil and Forex has been berry berry good to me over the past 3 Weeks.  I can’t believe how much my stress levels have improved trading Forex Positions  compared to trading the SPX.  :)

  • newbfxtrader

    I am glad. Keep it simple though. 

  • newbfxtrader
  • BobbyLow

    Thanks Newb.

    I’ll probably jump on that one in about another day (30 – 50 Pips down from here or so).  

    After trying and back testing them all, I’ve narrowed it down to 8 Pairs that the type of price action is a fit for the way I like to trade. This pair is one of them.  

    Simple is where it’s at.  My rules for entry are set and my rules for Stops and Exit are set.  :)

  • newbfxtrader

    Ur welcome. I trade long term so you can see the way I look at things. Be happy to see your setups sometime.

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

    another Zen trader.

    (Gerb glances a wry smile at AMC)

    dibs on the next troll.

  • AMCabrera

    (winking back) You know it is amazing what the gbp/jpy just did. I only had a quarter lot in the gbp/jpy but whatever Im very wary of going long yen anyhow. The aussie is really looking good so far AND the usd/nok is starting to heat up. fucking yen though…

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

    yep, I’m keeping an eye on the AUD/JPY.
    you can see the runup in 2011 & 2012.  I believe it is KEY.

    but yes, Yen is the slippery fish.  
    http://stockcharts.com/h-sc/ui?s=$XJY&p=W&yr=3&mn=0&dy=0&id=p83193315597

  • http://evilspeculator.com molecool
  • http://evilspeculator.com molecool

    Thanks – last thing we need are distractions.

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

    another point up of Risk On.
    like a climbing roller coaster.  click click click. everybody’s hand up in the air

    http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=0&mn=4&dy=0&id=p61511725933

  • BobbyLow

    LOL   You got it EG.

    Seriously though, because Forex is trading almost continuously, it is much easier to manage risk.   Most importantly if my Forex trade goes bad, I’ll more than likely be stopped at my planned stop and not some ridiculous stop that I’m forced into by a massive Gap Open in the SPX.  

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

    I’m not a sub, but if I were to play one on TV…..

    Weekly NLBL is about to cross to the up side.
    MONTHLY, NLSL has had 4 months of support, and the MULTI-Year median is a potential violation to the upside!

    ?

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

    XJY, its far beyond limits.
    could there be a relief bounce, and then finality in the Spring?
    If you look at the lows, you’ll spot a 51 week cycle.
    http://s14.postimage.org/noyfkwx5t/xjy_analysis.png-Gerb

  • Th3_Acist

    …and off the steering wheel…

  • Skynard

    Curious to see the reaction off the weekly 25:)

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

    did the Yen just gap down?
    1.1436 on FINVIZ

  • Skynard

    Ya, scaring the children:)

  • Skynard

    Yes sir, Now all we need is the dollar to retreat.

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

    are you kidding?  UUP is at $22, a range that goes back to 2008.
    the dollar bulls scooped it all up in 2011. ;-)

    not to mention it stepped above the 25 MONTHLY ma.

  • newbfxtrader

    Speak for yourself! I am looking for parity here.
    http://www.dailyfx.com/technical_analysis/elliott_wave?elliottWave=AUD/USD

  • Skynard

    Lol, look at this weekly chart. How much would you put on the line with this pitiful volume?:)

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

    ok, the volume is light.  it’s the Holydays.
    but look at the MACD histogram, just begging to turn positive.

  • Skynard

    Oh yes, daily and weekly look bullish. Just would like to see volume behind these moves is all. Who knows, maybe the dollar rallies again with the broad market.

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

    for a moment there, I thought I would have to defend my Honor.
    wait a minute, I have no Honor.

    http://s9.postimage.org/dugh0a11r/UUP.png

  • Skynard

    Nicely done!

  • Skynard

    Hehehe, take it your short that pair then:)

  • newbfxtrader

    Yep every time it touches that trendline its free money!

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

    thnx.
    for any lurkers, the left side of the T is/was based on a much larger 2-Year T (ending).

  • Rightside_ot_trade

    close but no Partagas

  • Skynard

    Have full long /ES now, Getty up!

  • Skynard

    Forgot the chart. Above that trend line and the 25 upper BB and Boooom!

    My guess that the /DX gaps down:)

  • Skynard

    Watching /SI and a bounce off the 100 daily lower BB.

  • http://twitter.com/Filam3nt Filam3nt

    Expecting a huge spike in risk, followed by an even larger spike in volatility. Gotta paint that monthly inverted hammer.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/ece3b378-2c51-4829-9a13-f2763b5a983a/2013-01-04_0446.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/dad16844-2b2b-4185-adb3-2533cee19bf0/2013-01-04_0450.png
    very nice so far. what i did yesterday was take profit from the second one and re entered at a cleaner level of 1.0454. Anyhow beautiful so far. I have scaled out of the usd/nok, you know just in case, and keeping this half lot one.

  • AMCabrera

    actually, you know what I will be taking profit from the 1.0505 entry that is nearly 100 pips I need to take it.

  • AMCabrera
  • AMCabrera

    I know I know but I have to try a short here in the aud/jpy weekly chart I just have too. 

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/e24c2664-b3c3-419a-87f0-2611d42841d0/2013-01-04_0500.png

    Also, I just testing to see if it is a fake out of the daily chart. If it is the downside move should be serve. 

  • newbfxtrader

    Its going to parity senor….

  • Skynard

    /ES still green? What the……..

  • newbfxtrader

    Its been a thorn in my side past couple of weeks. At least aud/usd is behaving well.

  • Skynard

    Would seem ST bearish if that high is not reached, placing short with stop just above that mark:)

  • AMCabrera
  • AMCabrera
  • newbfxtrader

    that jpy has been a dog so far. no luck with it yet.

  • http://evilspeculator.com molecool
  • AMCabrera

    blah usd/cad didnt work whatever.

  • Skynard

    Hehehe, bastards did not get me:)

  • AMCabrera

    out of everything i took a real fast spread widening profit from aud/jpy and gbp/jpy profit

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤ø„¸F R E S H „ø¤º°¨ 
    ¸„ø¤º°¨ M E A T“°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • http://evilspeculator.com molecool

    That was nasty!!!

  • Skynard

    Fucking head hunters, that is one thing about this business that pisses me off. Have learned to trade smaller with those wider stops.





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