Steady As She Goes

In the past few weeks we have been keeping it simple/stupid by  following the trend and as usual, ignoring the news. Which served us despite the fact that many technical indicators were suggesting heavily overbought conditions (a five year low in volatility only being one of them). As the old saying goes: The market can stay irrational a lot longer than you can remain solvent. A lesson I learned (the hard way) many years ago.

At this point there’s really not much to do but to let things play out. Make no mistake – it’s not the tape that ruins most traders. It’s our egos that usually do us in. As we as human beings we seem to have a unique ability to ignore the blatantly obvious. The need to constantly question and to evaluate every single (and improbable) possibility would rank in close second place. It’s amazing how clear things often turn out to be in hindsight. But fledgling traders often have a tendency to ‘over optimize’ (a term I borrowed from hacking software) and project their own theories on reality. In many cases to their own financial demise unfortunately.

None of us is immune. I’ve been there – you have been there. If you have been trading more than a year or two and survived then you may just have what it takes to join the small percentage of people who can make a living as a trader. It’s a pretty exclusive club, mind you, no matter what anyone tells you. Most people wash out. Sometimes due to ignorance but a lot more often due to laziness and impatience. The market is a cruel mistress and you have to work hard to master her whims.

Now let’s drop the philosophy lecture and look at some charts! The spoos – not much to say right now (per the above). She’s pushing higher and I think the best policy right now is to follow the ST panel upwards. There is no other context of importance right now but price. By the way – if she decides to drop through the 25-hour SMA then look at the lower 25-hour BB for possible support. That’s been holding up earlier this week and it’s where I would expect ST buying interest to emerge if they decide to scare the children again.

Dollar – getting interesting here. I’m seeing a lot of ‘context’ if you will – see the right hand panel and I’m sure you get what I mean. All that is happening near the 100-day SMA and thus I think a big move is coming. Not sure which way but I wouldn’t rule out the upside just yet. Anyway, keep watching this one – could be good, especially if she starts a short squeeze.

Silver – another chart to keep an eye on right now. It’s heading into daily resistance (right panel) and I would look for a possible reversal near 33.

More below for my intrepid subs, some commodities, some FX, and some stock symbols!

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Cheers,

This entry was posted on Wednesday, January 23rd, 2013 at 2:25 pm. Both comments and pings are currently closed.


  • http://evilspeculator.com molecool

    Case in point regarding the TOS FX debacle:

    “Thanks for the e-mail and link.   Yes, there is currently an issue with Charts and Forex and incomplete daily candles. Our developers are aware of this and they are working with our data provider to correct this.
     
    Unfortunately, we do not have a definitive ETA on when it will be fixed.
    We apologize for the inconvenience.
    Thanks for your patience and understanding.”

    Same crap as for the past four weeks…

  • itslance

    Why do they always assume you have patience and understanding?  What ever happened to “We’ll make it right by you.”?

  • BobbyLow

    You are probably aware of this.  

    But for those that are not and still want to use Daily Candles, get the day’s open, high, low, and close, from anything but the daily.  I use the 4 hour.  After you get these stats, Right Click on the Candle to be corrected and Click on “Correct This Bar”.  Put the correct numbers in the bottom of this box – hit apply and close and the Daily Candle is corrected.

    This is a pain in the ass but for people who are trading off the daily like me, it is necessary until they get it fixed.

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

    the comments in the forum is nearly going silent.
    could be a clue.  but yes, Steady as she goes.  can’t help but dream of red arrows, but not a day early.  no sirree.

    [AUD/JPY]
    http://s1.postimage.org/x4bmv6ll9/steady.png

  • AmazingLarry

    Is “context” the same as indecision or churn? Haven’t quite grasped what you mean by the concept. Thanks.

  • newbfxtrader

    good timing!

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

    frothy tops, double tops, tops tops tops – and this thing could keep on going.
    I forgot what a bottom looked like.

  • Ronebadger

    yeah, we can keep on going…with losers outpacing advancers…how long can you keep doing that, though?

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

    155 S&P points.
    a 23.6% retrace would be ~36 pts.
    yowsers.

  • bdoone

    I’ll take a stab: ES is grinding higher and respecting the 25hr sma, thats it. No ‘context’ or reason to base a decision to go long or short here i.e divergences within the instrument or in relation to others, like RUT, NAZ, DOW, bonds, copper, etc…yes, markets are overbought but can remain that way, and until we get some ‘context’ to make a decision for a trade other than ‘man, we’re overbought. it’s gotta go lower’, it’s better to keep powder dry…Like many, I’m looking to short this bitch but I keep telling myself there is no reason, yet.  Luckily I haven’t been shooting myself in the foot by repeatedly getting stopped out.

  • BobbyLow

    I’m still short that pair and plan to hold a while longer.

    I’m also short 4 other Pairs as I like to spread the love around.  

    There have been a few Points available for scalping on the E-Mini’s. 

    IBM propped the Dow up today and GOOG held up the NDX.

    But today’s price action hasn’t showed me anything.

    Maybe AAPL does something but so far the overall market is on that same road to nowhere.  

  • AmazingLarry

    Ahh, among the others. I thought it was used in reference to direction. Thanks. 

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

    SPX
    I haven’t seen Mole’s famous PF chart. Must be in sub-only section…
    How long it can go on? I have 1600ish. Too high? Mole’s 5 point PF target is 1690 and keeps growing !
    This shit should be illegal, but it works
    Until it doesn’t
    These two MA I have… they will cross again…someday…

  • http://evilspeculator.com molecool

    Exactly – I was watching Bill Burr the other day and he was making the same point: “Yes, we are soooo sorry, we apologize, I completely understand… but there is nothing I can fucking do to help you.” 

    I think incompetence is rampant all across the Western hemisphere. Asia is going to eat us alive once they overcome some of their own growing hurdles (pollution, stable middle class, internal demand, etc.). I can barely grasp the idiocy that seeps out of customer support departments these days. And how can a company like TDA NOT cause a hell storm among their customers by not fixing something crucial like this in a matter of hours (not weeks)? If I was running their QA dept I would fire the lot of them.

  • Skynard

    Is that a red candle, OMG!

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

    have you seen the knife scene in Saving Private Ryan?
    it’s like the knife went into the last hedge fund, VIX dropped below 13, and the air went out.

    http://t2.gstatic.com/images?q=tbn:ANd9GcQx2wAB58irgRAUb5oVzvHlNtmoYUD7zYtQp2-0P1NDzYQvzCadOXFDoLnG

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

    where!?!?! (DG looks around)

  • Skynard

    How about USDZAR, whoa!

  • Joe_Jones

    Just a glitch in the matrix

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

    I can’t tell how many flaming possums I’ve put out.

    http://venangoland.blogspot.com/2009/05/rewarding-incompetence.html

  • Skynard

    See what happens after hours with AAPL, cant this thing make 1600 by the end of the week:) Think that is what the market is waiting for now.

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

    Zar?
    btw, where IS AMC? 

  • Rightside_ot_trade

    FDX & NKE which had been helping pull up, have lost momo, lower lows and closes
    RUT also a little weaker today
    HYG JNK inside days

  • Ronebadger

    OK, target met….now what?

  • ridingwaves

    The opening content is why I come here, the market can humble anyone, brilliant or impatient. The way you said it made me copy it to keep nearby..Great stuff…

  • http://dartht.blogspot.com/ Darth_Gerb
  • newbfxtrader

    @sky HSBC Flash Manufacturing PMI  be ready at 8.45

  • Skynard

    He’s been spending all that coin, bet ya:)

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

    Hope his kid didn’t bring home the flu, that would toss the applecart over.

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

     Not sure what you mean

  • Ronebadger

    never mind, read the chart wrong  :(

  • Joe_Jones

    I hope he didn’t go water skying as that would seal his fate ;-)
    http://www.youtube.com/watch?v=7KJNQdOclVo

  • Skynard

    ZL gearing up for a big move here by the looks.

  • ridingwaves

    NFLX jumps 25 dollars a/h on .13c a share profit of 8 million but last years same qtr it made .64c a share….
    I just can’t stop laughing…Bizarro world….

  • Skynard

    Ya, maybe that will get things going again.

  • Joe_Jones

    Hey what is this news trading business?

  • itslance

    APPL down 26 AH.  I really wish I wasn’t such a buffoon with options, so I could have banked some coin off that.

  • Joe_Jones

    hehehe. Glad I loaded up on SQQQ yesterday

  • Skynard

    Yep, someone leaked:)

  • bdoone

    The AAPL 510 straddle on weeklies was about $36 an hour ago.  The 515 straddle went out about $37.  Its not moving far enough for profit for any option so far for tomorrow and there will be serious vol contraction.  Lotta losers played that game.  Good thing you didnt. shoulda coulda woulda…probably lost.

  • Skynard

    Always good to be aware of these events, that is the extent of it. Because if the typical person was not educated they would most definitely loose:)

  • Skynard

    That is a beautiful thing, currently have 500 level puts on that bitch.

  • BobbyLow

    Playing Straddles into earnings need a very large move in the underlying to make any money.  The MM’s have enough extra implied volatilty built into premiums that most of the time everybody loses except them.

  • http://evilspeculator.com molecool

    Well, I checked a year ago and the P&F then was suggesting 1500+. So never forget that these are LONG term charts. A lot can happen in between.

  • itslance

    @JJ – Smart way to play it.  

    @Sky – I don’t mind buying lottery tickets, but those are some expensive lottery tickets!

  • itslance

    Yeah, I always get screwed on options, so I just stick with what I know.

  • Skynard

    Any /NQ dip buyers out there. No kidding!

  • Joe_Jones

    :) I did not trade the earnings, but the probabilities, divergences, Zero, FX and other stuff on the market as a whole that is not supporting the up move. Looked like a blow-off top to me and decided to jump in short because the market just needs a stupid excuse at this point to correct. AAPL earnings just provided the right opportunity (though I should have backed the truck today instead of yesterday). 

  • Joe_Jones

    AAPL 481 AH. LOL!

    I never realised that the P&F P.O has been revised lower to 408:
    http://stockcharts.com/def/servlet/SC.pnf?c=AAPL,P&listNum=1

  • AmazingLarry

    Yeap, me too. When (and if) I flip to long I fully expect the share price to be a least half the retail price of the iPhone6. lol.

  • AmazingLarry

    Barren wasteland below $480, too. Ouchies!

     

  • Joe_Jones

    Yummy! ;-)

  • itslance

    Check out IRE today….that’s why I kept trying to short that damn thing.  But you guys were absolutely right….the one time that it does work out doesn’t make up for all the other times that I get my arse handed to me.  I need to get better about discipline.

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

     Thats true.
    My PF also had target of 1482, but then my MA’s crossed and that would be an exit right before tax-day. ”Would” – because I did not use this chart back then. It became a part of my system last summer, thanks to you btw.

  • itslance

    475 now.  Can you imagine being the person that bought at 514.01?

  • AmazingLarry

    Dude, you don’t even want to know how many times I’ve been there. It’s how we all learn; for me in particular, a lesson in position size/exposure. If you ever need an example of market physics and oversold and over bought, AAPL is giving us one now and did on the way up, too ($400-$700).

  • 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„¸

  • Skynard

    Also have been stock piling SPY 148′s which expire Fri:)

  • Skynard

    Gap at 420 where this large move began and better yet below the 100 daily.

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

    yep. discipline, not luck.

    and let’s drag this imaginary game onward.
    let say you held the short, and today if fell wonderfully!
    then what?  hold longer? maybe add to it?
    …and then watch it reverse and go to $16. (check the PnF chart)
    yeah – not what I call fun.





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