Round Numbers

Investors and especially the media love round numbers in finance. They are considered important milestones at which retail suckers get lured in just to be pointed directly to the express elevator down to the woodshed. Everyone is excited as the SPX managed to hieve its inflated carcass over the 1500 mark. And not only that – the Dow Jones is but a bagel throw away from climbing over 14,000.

What does that mean to us? Absolutely nothing – they are but numbers in our decimal system and if we we’d be counting in octal the SPX would be at 2734 – in hex it’s at 5DC. So why am I bothering to tell you all that? Well, grasshopper – so when you read about it in the financial news tomorrow you mentally assign the proper value to this piece of information. Which is exactly zero (0) – by the way being identical in binary, octal, decimal, and hexadecimal ;-)

Great early morning entry in the spoos today. I hope you caught that one and it’s now time to cash in your ill-gotten gains. If you missed out on this one you only have yourself to blame. We do this stuff every day here at Evil Speculator – try to keep up, will ya?

Nothing else to be said about equities right now – this thing has to run its course and we are waiting for the viagra to work itself out of the system. In the interim we’re having fun playing the swings near support zones. Evil is as evil does.

The Dollar couldn’t hold its support line (as usual) and breached yesterday’s inside day trigger to the downside. We may get a last kiss goodbye here so be prepared for that – if you snoozed the entry then this may be your last chance. I seriously have to start charging you guys in Euros – or food stamps maybe.

Copper – great bounce here at support. If you were a sub yesterday then you remember that I was pretty excited about this setup, glad it’s working its way higher. By the way – nice ID trigger as well. Not out of the woodwork yet by any measure but it’s a good start. Our stop is below the diagonal (as it was yesterday).

Soybeans – also good entry yesterday via the short term panel. Yes it was speculative but sometimes it’s better to be lucky than good. I’ve got my stop below the diagonal – let’s see if it can make it up to the 100-day.

AUD/USD – I pointed this one out this morning. Looks like the Rommel’s Pinser maneuver failed and the Aussies managed to break through the 100-hour SMA. So far so good as that was our long entry. By the way that NLBL is probably not accurate due to TOS not getting its act together. I could suggest to all of you guys to send them some angry emails but that wouldn’t be nice, would it. So please – do NOT send them angry emails. That would be so wrong.

Setups – yes, of course I managed to scrape a few new goodies together – please step into my lair:

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Cheers,

This entry was posted on Tuesday, January 29th, 2013 at 2:20 pm. Both comments and pings are currently closed.



  • newbfxtrader

    @scott aud/usd to answer you previous question. Entry at 1.0435. I saw a pullback to 1.0440 that held and put my stop at that level. 

  • http://evilspeculator.com molecool

    Did everyone die? :-)

  • Skynard

    Oh oh, better get JJ over here. Those are one hell of a div on both hourly and 5 min.

  • convictscott

    JackSparrow, from previous post… Its 6am here in Australia, I just got up

    question to CS from previous post, 
    if you could please spare a few mins to explain your thoughts on thisI completely agree with AUD setup from previous post all the characteristics of a bounce from support with a good RR for a LONG, the question I have is would you look at it differently if you are short from above , i.e would you continue riding a short if evidence on a longer time frame is still on the fence but suggestive of a bear trend?I always reread this “the big money was not in the individual fluctuations but in the main movements-
    that is, not in reading the tape but in sizing up the entire market and its trend.”-JL, and resolve to get it right the next time when I end up as an example of this :)”They say you never go broke taking profits. No, you don’t. But neither do you grow richtaking a four-point profit in a bull market.” – JL 
    Jack, my thoughts on this are as follows. The BIG question for any trader is “is the market trending or in a trading range?” Markets spend most of the time in a trading range, then make 80% of the price moves in 20% of the time. A good rule of thumb is that if you look at a chart and are not sure, then its NOT trending. A 5 year old kid can spot a trending chart.

    In a trending market (on a higher timeframe) arguably you should do Livermore style and swing for the fences (provided it fits with your emotions – Livermore was VERY comfortable with loss, he went broke several times and died broke without regret, a speculator to his bootstraps)

    I attached a weekly chart of AUD – now YOU answer the question “is it trending or not”?

    If it is not trending you should be doing the opposite of what you do when it is trending, ie sell high, buy low, take quick profits instead of letting them run. In this case I don’t think we have evidence that the market is trending on a higher timeframe, and it is at support. 

  • bullregard

    Touché :)

  • http://evilspeculator.com molecool

    Dude you get up early. BTW, check your email…

  • AMCabrera
  • AMCabrera

    what Im trying to say is Mole is correct IMO of what is developing. Go ahead put in the fear that the retail investor will get “priced out”. Likely, a slow fourteen day climb erased in probably two days. “oh try again” is all that will be said

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

    oh that is why I said it was easy peasy on the 24th. If you had to go short just wait for the breach of that daily doji if not let the bitch rot higher while keeping sell orders underneath.

  • AMCabrera

    LOL!!!

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

    I have a binary clock at my desk.

    http://www.loreneverly.org/obs/clocks/0/clo014.jpg

  • badflightrisk

    The children are drowning in TVIX land but the 4.70 level has been holding for the past three sessions

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/a7d3afa1-c85f-4a34-a931-814eeb5f0eca/2013-01-29_1539.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/1304feb8-4462-4bf1-b35b-13a4d1f3702a/2013-01-29_1540.png

    nothing to worry about. (wink) I plan to be really right. So in summary I have shorts in this pair total is half lot and shorts in aud/jpy from this morning total is half lot.

  • bullregard

    I’m sure you miss assembler too :)

  • Joe_Jones

    I guess what have to get the cue for it from The Bernank first.  

  • Joe_Jones

    LMAO!

  • JackSparow

    Thanks Scott, sincerely appreciate you taking the time to answer.  I try to learn from every trade and every opportunity I have from members of this Blog,  and you especially are very methodical and patient – Thanks! 

    You are absolutely right this is still a trading range not a trend .  I convinced myself without my own knowledge :) to break the carinal rule of not forecasting a trend, and  rather ride one when it presents itself.  
    The multiple attempts to break to upside reinforced a bear bias.. I may get the trade right but it is noway to trade and an amateur mistake that I cannot afford to make after the tuition fee I have paid over years :) 

  • convictscott

    I’ve paid that tuition fee myself, and it hurt to pay. In my view the most important thing you can do is work out “is it trending or range trading” and adjust your strategy.

    Trading range attempted breakouts fail 80% of the time – FACT. Right now, the AUD long is behaving right finding support. But IF this support is a dead cat bounce, and it runs out of steam and reverses, then we will almost certainly trend to the downside.

    What I am saying is you have to look at it in context of what should be happening, then figure out what you are going to do if the low probability outcome happens. 

    Low probability outcomes result in outsized moves. AUD breaking and closing below the low of yesterdays hammer candle would mean that the fakout buy has failed, support has failed, and the range is broken. At that stage I would totally reverse and get short.

  • AmazingLarry

    AMZN shenanigans. 249 to 282. Buy at open and get free super saver shipping! 

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

    Hey mate I got your mail, I’ll respond later – I’m giving a motivational talk to cons in jail today, gotta go get myself into prison ;-)

  • http://evilspeculator.com molecool

    hehehe

  • http://evilspeculator.com molecool

    It’s saying 12:30:45

  • http://evilspeculator.com molecool

    EXACTLY – we like high probability outcomes because they are easy to follow. But love the outliers because they are so fucking profitable if you manage to squeeze in. Remember the posts on kurtosis?

    http://evilspeculator.com/?p=23567

    Study this.

  • http://evilspeculator.com molecool

    The market is very consistent – it will in most cases fuck the most people.

  • http://evilspeculator.com molecool

    Oh, it’s one of those scared straight deals? Damn, I would fucking pay to watch that vid!

  • Joe_Jones

    Livermore? ;-)

  • Skynard

    /SI at an interesting place on the 32 banging heads with the 100:)

  • JackSparow

    :) Thanks to both of you. 

  • bullregard

    So you assumed light means a 1? I read 2D:4F:3A. Oh, wait…

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

    Alright you rats, listen up.  
    ************************************************
    I heard a crack in the roller coaster trestle.
    it may be nothing, or it may be EVERYTHING.

    I purposely did not post a link to stockcharts, but instead with this image.
    http://s2.postimage.org/nb986vme1/hairlinecrack.png
    why?  if the Market continues to go up this week.  the renko stockcharts chart will erase the little red blip.  hence, the snapshot.

    Given that JJ semi-threw in the towel today?   a sign of this blip, could be just the ticket for an E ride on the SnP correction.  at least one could hope.  for now, it’s just a tingle signal on my whisker.
    -Gerb

  • Skynard

    Remaining long for this one. Fake out H&S, rally hard and get rejected at the 100 then sell hard again to the neckline with another failure. Damn straight that is what the market does best. Whoa, now lets wait and see:)

  • Schwerepunkt

    A minor disturbance in the force.  

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

    @JackSparow:disqus ,

    We are there – http://evilspeculator.com/?p=33544#comment-781146115

  • Schwerepunkt

    Actually, that’s the original design for the Death Star. 

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

    probably, I still see no guard rails.
    =P

  • JackSparow

    watching closely

    chart using my scale below..

    also /NG my view

  • Joe_Jones

    I sure am an indicator by myself. LOL! 

  • Th3_Acist

    Are you using the Hourly for your stop loss?  I find setting the stop loss is the most difficult part of trading for me.

  • DudePlunger

    Mole holding em down!  I saw Scotty was back so figured I’d chime in too.  I’ve been working hard to get my trading consistent, been executing a rule based approach (ie, 100% mechanical), which I developed during my mentorship with Ivan Krastins. I attached some results for you guys, last week was the largest draw down thus far, what better time to join a forum!

  • AMCabrera

    hi, so you have been lurking :)

  • BobbyLow

    Hey DP,

    Good to hear from ya again.   I had a feeling that you were going to make it.  :)

    And yes, Rule Based – Mechanical is the only way to go.   

  • convictscott

    Your results and the discipline you bring to the process are OUTSTANDING. I’m sure you will be > 50% this year

  • convictscott

    Hit me up on skype: wealthawareness. Stop setting is easy, I can show you the various options in 10 mins

  • BobbyLow

    Hey Scott,

    I lost track of time but I think it was probably a couple of years ago now when I had a good 
    game plan and was doing OK.  But I was still trading Options and Hedging almost everything.  You said at that time that this was a hard way to go and you were right.  

    I am currently using a back tested strict rule based mechanical plan with Forex.  Forex was a brand new world for me and it took a while to figure out how I was going to trade within it.  Anyhow I really like what I’m doing now.

    I’ve even taken the plunge and am able to do a little scalping with the E-Mini’s from time to time. 

    I like Forex trading better though and believe this might just be where I belong in the trading front.  

    Fuck the S&P.

    BTW, I haven’t forgotten that it was you who helped point me in the right direction to develop rules and back test these rules and back test these rules some more.  :) 

  • convictscott

    was pretty cool actually – its always a trip when they actually let me out of prison again

  • Th3_Acist

    Just saw this, I’ll try and get in touch tomorrow thanks!

  • convictscott

    I’m not smart enough to be trading options, its just too hard with the extra dimension for me ;-)

    Rule based mechanical trading is the way forward. Even my discretionary trading I use strict mechanical methods to enter and manage the trades

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

    when would too high an oil price choke off productivity?
    $99 as in September?

    http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=0&mn=6&dy=0&id=p79630765050

  • DudePlunger

    Great stuff!  Rule based mechanical is one way to go…I think there’s more potential in discretionary but it’s so difficult.  I couldn’t do it, emotionally I would blow up.  Hats off to guys who can do it though.

  • DudePlunger

    I’ve sort of been lurking.  Haven’t been checking the chat at all but I do get Mole’s emails when a post comes up (if you consider that lurking at all, haha.)

  • DudePlunger

    Thanks Scott.  Trying to build that track record.  I’ve been at this now for 5 years, time flies when you’re having fun though!  (well, it’s mostly been fun…blowing out $5,000 accounts in 2 months wasn’t all that fun 3-4 years back.)

  • DudePlunger

    Anyone here trade the GbpUsd?  It’s had a nice trendy move down since the start of the year.  

  • http://evilspeculator.com molecool

    Hey, they were talking about you the other day. Word has it you really upped your game :-)

  • http://evilspeculator.com molecool

    And yes — we are trading cable.

  • http://evilspeculator.com molecool

    I once blew out $25k in a day way back when I got started – part of the learning process.

  • http://evilspeculator.com molecool

    And forward test.

  • http://evilspeculator.com molecool

    We all are – start using that and you get to the next level.

  • http://evilspeculator.com molecool

    Let me guess – your system expected mean reversion. Right? And you got your ass handed to you by a market that kept on churning. Read up on kurtosis – lepto meso and platy: http://grants.hhp.coe.uh.edu/doconnor/PEP6305/Topic%20002%20Organizing%20Data2.3.htm

  • DudePlunger

    I heard, part of why I chimed in.  I’ve tried mole, it’s been a long journey & the market’s kept me humble.  Really been focusing on the process side of things.

  • DudePlunger

    Nah nothing as fancy as mean reversion.  Just simple setup based market timing (I use many of the setups Scott writes about, FOs, RTVs, IPS, etc).  My rules plus the churn resulted in a sequence of 1R losses.  I still have some work to do on my money management rules – need to get some more stats in to see max draw downs, max losses in a row, max wins in a row, etc.  

    Thanks for the link, I’ll definitely do some reading!

  • captainboom

    DP, I see your histogram showing R has max -1 R drawdowns (as it should), but there are some that are between zero and -1.  What kind of situation led to these cases?  i.e. -R, but between zero and -1R.  Had you started to move stops up that then got triggered?

  • DudePlunger

    Yep – stop was moved up & then got triggered.

  • Skynard

    /CL very close to meeting it’s price objective

  • http://evilspeculator.com molecool

    Monday and Tuesday E-Mini session via the Zero indicator.

  • ridingwaves

    ANX and ABIO are both going to be in play today in bio sector…I actually posted ABIO buy yesterday at .38 pps with it being above 50 and 21sma along with 180cross..then I redacted it thinking no one plays bio here, so why post it and take heat…ANX announce phase 3 initiation for sickle cell cure this am… .59pps

    ABIO 85% gain a/h yesterday..cheers and good trading..

  • 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

    AUDUSD finding support @ 1.04, now long. Ping Pong:)





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