Crude Disposition

Crude remains to be one of the most interesting charts on my radar right now. If you’ve been coming here for a while then you are hopefully enjoying the ride since the 85 cluster retest which I suggested was the quiet before the storm. Let’s work ourselves top down starting with the P&F  for some general context.

Our official long signal occurred on December 3rd when we got a triple top breakout. Since then there hasn’t been a change in the projected bullish price objective of 99. I hope you were around then and got a chance to ride this one up.

On a long term basis crude is in the process of overcoming weekly (100-w) and monthly (25-m) resistance. On the monthly panel it’s rather easy to see a symmetrical triangle formation which suggests that the odds are favoring the bulls and the bullish PO suggested by our P&F.

Short term I am however prepared for a quick shake out. The right panel shows what I refer to as ‘context’ – meaning an accumulation of inside and outside period with no apparent direction. This suggests to me that we’ll either see quick shake out or continuation higher into 99 and possibly higher. Use the double inside day today to place positions – it may take a bit of doing but once again I think the prospective gain will outweigh the pain.

Quick update on gold – again I hope you stuck around yesterday as we got a great opportunity for a clean entry near the 25-day SMA. Since we already breached yesterday this switched us into a short position. The target is yet undefined, let’s see what we’ll get in terms of velocity – it is still possible that this is a false breach.

More charts and non-biased commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

Please login or register for Zero Data Feed (non-recurring) or Zero Data Feed (recurring) or ES Gold (non-recurring) or ES Gold (recurring) or geronimo/ES (recurring) to view this content.

Enjoy your weekend!

Cheers,

This entry was posted on Friday, January 25th, 2013 at 1:15 pm. Both comments and pings are currently closed.



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

    Nice one on Gold, boss.
    I have a target for you: 1560
    Here, with PF chart:
    http://evilspeculator.com/?p=33456#comment-777698538
    Yes, yes, I know – alot can happen between now and then, but one can wish. No?

  • http://evilspeculator.com molecool

    Yes, that’s what mine says as well: http://content.screencast.com/users/evilspeculator/folders/Jing/media/61e987d4-8b4e-4411-83ef-3488a82210b9/00006561.png

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

     Yum!
    Where is that gold bull market?
    I remember Eric Sprott saying “Gold will be 2500 by 2012″…

  • itslance

    New high on the SPX but negative momentum and VIX hasn’t budged.  I knew I smelled funny business.

  • Joe_Jones

    Reloading shorts now (after being stopped out earlier): I like that neg div on 5 min ZL

  • http://evilspeculator.com molecool

    People say a lot of things all day – I for one just follow my charts.

  • AmazingLarry

    Other than the fake out last week, the 100 weekly held all last year. Right now it’s sitting at 1646 and change.

  • AmazingLarry

    Nice little break and retest to the upside in another precious I never hear anyone talk about, palladium. PALL is the fund for it.

  • AmazingLarry

    That’s a sweet crude (pun intended) set up. The daily NLSL lines right up with the 200 hour which has been support for over a month. There’s also a nice volume hole sitting right below at around $94 (check the weekly).

  • itslance

    Finally some counter movement…although VIX still not moving

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

    SCTY update:
    still in it
    As long as this rebound holds…

  • Ronebadger

    4/3 market breadth on NYSE….not too exciting, is it?

  • bdoone

    Bear food for thought:

  • Schwerepunkt

    I’m hungry . . .

  • http://evilspeculator.com molecool

    Yup, we’ve talked about that here. Tops/bottoms still are a process. 

  • Joe_Jones

    I don’t like what I see FX side. Going back to cash.

  • Skynard

    What do you see JJ?

  • Joe_Jones

    audjpy not breaking down. But then again,  I soon as I open my mouth, the market does the opposite

  • Joe_Jones

    see. fuck me.

  • Joe_Jones

    reloading 1/3 position short to keep over the w-e. Rest in cash.

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

    /ES
    I don’t  like what i see.
    Price action yesterday and today is more erratic, volatility on the rise regardless of VIX.

  • Skynard

    Oh, it’s day is coming. No time to back the truck yet but smell something. Noticed more strength in VIX and TVIX is not down 5% today:)

  • AMCabrera

    I will add to eur/gbp come monday short.

  • itslance

    Got stopped out twice….no más

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

    Out of SCTY
    end of update…lol

  • Schwerepunkt

    Yes, I recall your VXO chart, Mole. Awfully wide crocodile mouth on bdoone’s version. Maybe Bernanke has discovered the elixir of everlasting economic life.

  • Skynard

    Are earnings over yet? AAPL at LOD:)

  • ridingwaves

    picked up ARNA on 180sma support…

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

    You wish.
    Two more weeks
    FB on 30th, and I actually planning to keep some into announcement

  • ridingwaves

    weekend reading..
    http://www.newyorkfed.org/research/economists/eggertsson/JMCBpaper.pdf..
    apologize in advance for length…but these excerpts are clues on what the fed is doing with stocks…
    The basic idea of the paper is to create money and buy assets to avoid the devaluation of the financial assets, including stocks. According to Eggertsson’ (or FRBNY?) model, the amount of money creation may reach up to 400%(!) of the GDP… but it can be reduced “just” to 70% by the use of non-traditional monetary tools (buying private assets such as stocks, commercial bonds and foreign exchange). And this is exactly what FED is doing for the last four years… and, according to Eggertsson, it still can print and buy much more – if needed :) http://www.newyorkfed.org/research/economists/eggertsson/JMCBpaper.pdfhttp://www.imf.org/external/pubs/ft/wp/2003/wp0364.pdf(p.286, JMCBpaper.pdf)”Cutting taxes and dropping money from helicopters are only two examples. The government can also increase debt by printing money (or issuing nominal bonds) and buying private assets, such as stocks, or foreign exchange. In a Markov equilibrium, these operations increase prices and output because they change the inflation incentive of the government by increasing government debt (money + bonds). Hence, when the short-term nominal interest rate is zero, open market operations in real assets and/or foreign exchange increase prices through the same mechanism as deficit spending in a Markov equilibrium.(p.318, JMCBpaper.pdf)An advantage of buying private assets, as opposed to cutting taxes, is that it does not worsen the net fiscal position of the government. It only changes the inflation incentive of the government…(p.20, wp0364.pdf)…government always eliminates any outstanding debt when the nominal rate is positive. The logic behind is simple: nominal debt creates inflation expectations…
    To increase inflation expectations the government buys real assets in period 0 by printing money (or bonds)… In period 1 the government reverses this transaction by selling the bulk of real assets. The nominal debt issued in period 0 effectively commits it to higher inflation in period 1″

  • itslance

    Have a great weekend guys!

  • captainboom

    Ronebadger, here’s the updated weekly SPX DeMark count you requested.  It did indeed give the 13 count on the sell countdown.  I wouldn’t trade on this alone, as the uptrend looks pretty solid to my eyes.  I’ll have to see if I can discern any more from this over the weekend.

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

    VXO, muwahaha.  told ya.
    it’s all Hamilton’s fault.  he got me started on this journey.;-)
    i’ve been looking at his charts for over a decade.

  • AMCabrera

    I never see the point of those nanex articles (yes I went to the house of ill repute). Maybe its because Im desensitized from seeing all that brutality from the forex (going on my third year of forex trading).

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

    I hope you used protection, you never know what STD (silly trading deviation) you might pick up.
    he he

    (don’t answer that, rhetorical only)

  • dma0

    Heh… AAPL getting to my puts target I had May last year… I was right, yay… hm

  • dma0

    picture!

  • AmazingLarry

    Same point of the entire site: keep saying the same things over and over until one day….one day…you’re right. If you ever had the unfortunate pleasure of wasting your time in the comments section, there was a dude named Robotrader who used to call for 1500 SPX and whatnot and stood by it even when all the douchebags would rip him for it. Well what the fuck do you know, would you look at that, ya don’t say. 

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

    Did you do this manually? I love the DeMark stuff but I had issues actually trading it because I couldn’t understand the logic behind it

  • convictscott

    PA is an interesting metal, because it is an industrial metal with real uses that is only mined in about 5 places in the world. Most of them are in craphole places, and the data coming from the mines is extremely suspect. 

    There are fundamental based hedge funds active in this area, and the market is small enough that it is possible to manipulate price.

    I strongly suggest you base your charting decisions on front month palladium futures contract (see barchart.com) rather than the ETF

    The true story at present is shown by PA H3 :)

  • Y KW

    The chart of the cash price of PA also shows a ‘pure’ picture, especially when viewed in concert with the futures chart.

  • AmazingLarry

    That explains it. Mother of god, can he put ONE more word on those damn things?!? I don’t have a decade, but I do know what to expect when I pull up a Zeal article..lol….

  • AmazingLarry

    Interesting. Thanks for that. I own a few bars of bullion and have watched it in context with gold and platinum for a few weeks.

    Just put /PA and the front month side to side and they match price action wise. Seems the run-consolotate-run long term pattern is still going. I don’t trade futures contracts so unfortunately PALL is the only exposure I can get that I know of, unless you could point me in a better direction. 

  • ridingwaves

    On Thursday, someone bought 100,000 VIX February 16-strike calls for $0.55 each. This is a $5.5 million bet that the VIX will settle above 16.55 (30 percent higher) 13 trading days from now. The trade occurred just before the VIX spiked from about 12.60 to a high of 13.50, before reversing again to close at 12.75.
    http://www.cnbc.com/id/100408154

  • convictscott

    Very true!

  • convictscott

    I don’t know the symbol for cash PA, I know gold is XAU A0-FX and silver XAG A0-FX

  • captainboom

    No, I don’t do it manually.  I use a free ToS paper trading account for charts, as the charts at IB suck.  The Sequentials are available as a native indicator on ToS. DeMark has a bunch of other stuff he’s come up with, and I think the TD Sequential is the only one that ToS has natively.  Someone somewhere, I think here, told me that there were some issues with the coding of the ToS indicator, but I don’t recall exactly what those issues might be.  I think it might have been with some of the recycle qualifiers that cause the count to recycle.

    For the most part, it seems to be okay.  I don’t think you can trade based on that alone, but I think it can be helpful.  DeMark’s indicators are available natively on a Bloomberg terminal and on a couple other platforms, that as far as I can tell are too expensive for me.

    I like to look at it because I think some of the pros and their bots use it.  On shorter time frames, it’s not uncommon to see a trend start to turn at a Setup count of 7 or 8, in anticipation of a 9 count completing.  This is one thing I like about the ToS version, in that it shows the count forming, until the conditions that have to be met for the count go away or allow it to complete.  i.e. You can sometimes watch the count appear and disappear if price is near the point where the count is valid or not during the formation of a bar.

    For those not familiar with it, the sequential consists of a buy or sell Setup count to 9, and then a following buy or sell Countdown to 13.  You must have a valid Setup count before the Countdown can start.  The Setup count must be sequential on whatever time frame you are on.  The Countdown count does not have to be sequential.  There’s a 4 bar lookback on the Setup, and a two bar lookback on the Countdown.

    I know you mentioned you had read Jason Perl’s book, but for others, that’s the best reference out there as far as I’m aware for DeMark Indicators.  It’s something I should read again.

  • Ronebadger

    speculation or hedge, that’s some bet

  • Y KW

    For whom … the squid, the man in the street or GS?

  • Ronebadger

    Good Work!  Thanks!

  • Ronebadger

    I don’t think there is logic (just like astrological predictions to some people).  It’s just something that works….for Mr. DeMark.

  • captainboom

    Having read DeMark’s original work, this stuff is something he came up with that was quantifiable at the time.  There are very specific, objective criteria that must be met in order to qualify.  As a result, the logic allows one to program bots to look for the patterns, and the popularity with institutional traders.

    I’m inclined to believe that it’s now become a self fulfilling exercise, as I think the patterns show up much more now than they did when he did his original work.  I don’t know this to be fact, but it seems that way.

    One other note:  De Mark seems to be very good at trademarking and marketing his stuff to the big money folks.  Every single one of his formal indicator names is preceded by a TD, for Tom DeMark.  It can make reading his stuff more dense than it needs to be.

  • http://evilspeculator.com molecool

    Agreed – it’s interesting intellectually but unless you are a quant and have massive resources at your fingertips there’s nothing you can do about any of it. 

  • badflightrisk

    S&P reclaiming 1500 and everyone’s 401K has been saved was all over the evening news.  No Fearless forecast
    was included.

  • Ronebadger

    I guess all the sellers next week will have no problem finding buyers, eh?

  • BobbyLow

    I saw this on ABC and once again the main stream media has proven itself to be worthless.  

    Having had a love/hate affair with this market since 1998 and with an equal amount of love for history, I see a different story.  

    The S&P closed at 1458 on March 16, 2000 and 1503 on Friday.  That’s +45 Points in almost 13 Years.  

    More recently, 6 years ago on 1/25/2007 the S&P closed at 1424.

    Then the bottom fell out on March 9, 2009 when the S&P closed at 678.  This represented a 47% haircut from the close on 1/25/2007.

    So now we are back to 1503.  Quite a journey to nowhere over the past 13 years you think?

    (Of course any gains over this time period would be increased through Company Matches, Dollar Cost Averaging and Dividends.)  

    We have been at extremely low Interest Rates for probably less than half the time period since the year 2000.  However, if Interest Rates were averaged out over the past 13 Years along with Company Matches, I wonder if the overall results would have been better for the average “401K Holder”.   

    I think it would and with a lot less mental stress and worry.   Buy and hold my a. . .

  • Skynard

    Oh oh, SOH is bullish now. Might be time to back up the truck:)

  • dma0

    Interesting… why do you say that? 

  • http://evilspeculator.com molecool

    heheheee :-)

  • http://evilspeculator.com molecool

    perma bear…

  • http://dartht.blogspot.com/ Darth_Gerb
  • http://dartht.blogspot.com/ Darth_Gerb
  • Th3_Acist

    I think it’s some kind of mental porno for them, most readers have lost bets in the market and use the site to feel better about themselves I think.  So in looking at those (and not understanding a damn thing) they believe they know something the public doesn’t…and voila they feel better about themselves.  Lather, rinse, repeat.

  • Maumaj

    This quote from a long time trader that posted on another blog and knows TD better than most.  He has a background in programming and is also an engineer: 
     
    “1. Setup often does NOT start with a proper TDFlip
    2. Countdown often does not print correctly (ie., completely violates the rules). I think they may in fact have coded it for Aggressive Countdown only.
    3. Does not mark where there is a Recycle.
    4. Takes no account of determining the active Setup if a new Setup overlaps an active Countdown.

    Apparently there are a few more that I have not bothered to find.”

  • Maumaj

    Here’s a screenshot of the SPX weekly from a proprietary TOS script of TD Sequentials if you desire to compare it with your chart.  I cannot share the script but would be happy to occasionally post a screenshot.

    http://content.screencast.com/users/Maumaj/folders/Jing/media/cd191b3a-35d1-4a73-8d31-db4b252f0ec0/00000390.png

  • bullregard

    Penny-sized my first account with MIR (Medmira) on TSX Venture. Bought around 30-40 cents in September 07, if I remember well. Added around 60 cents… Saw it soar to 1.4 or something… then… disaster struck. That was among my first trades… Not that I know much now, but I really knew nothing then. I think I still have those 10000 shares in that account… forgot the password :)

  • bullregard

    … although I remember one of Volar’s last posts… He was talking about a strategy with penny stocks, spreading over enough of them so if one takes off pays for the rest… this is very interesting, indeed. How do you gauge the probability to strike one and how high can it go…

  • Joe_Jones

    LOL. This is one of the best indicators out there.

  • Joe_Jones

    1/3 of the truck is filled up. Waiting for Sunday night to play FX. 

  • http://evilspeculator.com molecool

    Misery loves company.

  • Skynard

    Just another one of my indicators is all:)

  • 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„¸

  • http://evilspeculator.com molecool

    “So now we are back to 1503.  Quite a journey to nowhere over the past 13 years you think?”

    We all know that – but to us traders what really counts are the 1500 handles we moved in between ;-)

  • captainboom

    Maumaj, thanks for the clarification and the chart.  This is helpful to know where ToS has weaknesses.  Is the proprietary code you mentioned in your other response available for purchase?  You can email me off list at andy at myusernameabove dot com





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