Steady As She Goes Now

A question came up in the comment section today pertaining to how to count lower lows to produce a NLBL. After looking at the description I realize that I need to probably rephrase the rules. Let’s review today’s NQ example:

I always used to refer to three lower lows but that’s actually incorrect. The way I’m counting them is to look for three consecutive lows – which in other words are in fact two lower lows. If we needed three lower lows then we would need four candles – the setup is a three candle configuration which requires two lower lows. I hope this clears it up and I apologize for any confusion.

You may recall that I suggested to keep using the inside day trigger on gold yesterday. Well, I’m glad I did as precious metals finally took off across the board. At this point my target is the 1500 mark where it’ll also meet up with its 25-day SMA.

I don’t really have much to add to the situation over in equities. We saw the tea leafs early on and got on the bullish bus just in time and before the VIX buy signal triggered (and sealed the deal). Well, it’s been green (white) candles ever since and thus far we are in good shape.

Caveat: The volume profile shows us a drop off not too far from here after 1590. I’m not sure that’s a huge problem as the tape in recent past has managed to bubble higher on low volume fumes. However it’s possible that we’ll see a quick correction before equities muster up enough mojo to punch things to the next level. If you’re long you should be prepared for that. Unless you really know how to micro-manage your daily positions I suggest that you pursue a strict ‘hands off’ approach. It’s easy to get shaken out and then missing the next leg up. Of course if this is your target zone then feel free to jump ship.


More charts and 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 subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

Please login or subscribe here to see the remainder of this post.

FYI – if you took that early morning entry on crude today then I would suggest you close out now ;-)

Cheers,

This entry was posted on Thursday, April 25th, 2013 at 2:27 pm. Both comments and pings are currently closed.



  • amokta

    Despite the contagion of mania breaking out, Mole seems to keep his teutonic sense of cool about him, and bank coin regardless, like a one armed bandit stuck on ‘jackpot’ :-)
    That’s the value of rules + good psychology

  • lauter1

    Master Mole, thanks very much for the NLBL clarification!

  • Joe_Jones

    hahaha, you’re on a tear today

  • Joe_Jones

    looks like the full moon is approaching ;-P

  • Joe_Jones

    closed all miners for now

  • Ivan

    ‘Good’ back applied rules and detachment from the outcome of ‘this’ 1 of the next 1000 campaigns!

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

    Spoos 1580 back at the channel line.
    ok, who hit the sell button?

  • Darkthirty

    shame on the moon

  • amokta

    Must be the full moon :-)

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

    I’ve never knocked on the lunar stuff.
    If a billionaire believes in the moon, and sells off, who am I to argue? ;-)

  • amokta

    ConvictScott too, has has been trying to pass this wisdom on to the less worthy disciples, mind you he must feel like he is banging his head against a brick wall sometimes :-)

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

    uh, I see divergence on the Spoos vs AUD/JPY.

    EDIT: ok, maybe not so much.
    you be the judge.
    http://s23.postimg.org/7pz79t8jv/temp1.png

  • tradingmom

    http://screencast.com/t/wiWk4KPGV
    so, in this picture, is the NLBL where I drew the blue line? Thanks!

  • amokta

    The market has spoken, so ‘listen to the market’ (I&II)
    If you can’t hear anything, then get your ears syringed :-)

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

    The Market is full of deception, a finely tuned game..I only listen to Mole. occasionally Ivan.
    EDIT: (picture is of a dog in training, perhaps German instructions)
    http://s3.favim.com/orig/38/black-cute-dog-ear-phones-Favim.com-308939.jpg

    =P

  • amokta

    Is this the prop-trader at blackdog hedge fund :-)

  • tradingmom

    Mole, sometime when things are calm (like when the market is closed) could you give more info on how long the NLBLs and NLSLs are valid, and when one level is in effect, are previous ones no longer valid, or do they still carry some weight? Thx.

  • bdoone

    Looks like a div to me (about 3% off highs with SPX pushing towards new highs)…Also, VIX was 12.10, TLT was 120 on 4/11

  • tradingmom

    On the SPX hourly chart, is the NLSL at today’s open? (now that someone opened the door for questions, I’m not shy about walking on through :-) )

  • http://evilspeculator.com molecool

    He bitches about you a lot actually!

    (just kidding)

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

    My G*d, I think you’re right. Oh no, it’s a Tim Knight podcast.

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

    *clean up your books*

  • Rightside_ot_trade

    zero signals have an even better edge perhaps based on the candle itself
    i.e. whether its a Hammer star doji bearish bullish etc. It’s that way today at least
    Given that approach, I’m a little wary of that hourly mid day signal

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

    ok rats, I’m outta here. Apparently my boss wants me to actually work.

    http://s23.postimg.org/v6a2bqfez/honey.png

  • amokta

    Another successful day on Wall-street,
    I feel feel like Gordon Get-outta-here :-)

    (remember, we can always be lucky, but luck runs out sooner or later. A successful trader cannot rely on luck or hopium – not saying im there yet, but knowing this pitfall is a step in right direction)

  • amokta

    Honey Badger, i shrunk the Bollingers :-)
    Nice chart – useful to keep eye on the BBs, select MA’s

  • http://evilspeculator.com molecool

    How unreasonable of him! You should lower his expectations…

  • convictscott

    It is hard to believe in it because it is complete garbage. Think about it. Institutions control the market. Institutions are the profitable participants, and the vast majority of volume. If you want to be profitable you have to do what the institutions do (which is not consult star charts, believe me – and increasingly do not consult *any* charts using pure statistics) Bots are the largest participants within the institutions. Bots are demonstrably unaffected by the lunar cycles. I can quite confidently say that given the total banking/finance paradigm is to *not lose your job* it would be an extremely small subset of traders that are basing decisions on phases of the moon, astrology, sunspots and other bunkum. I’m pretty sure that if Peter Levchenko rocked up to his supervisor and said “its a full moon we should bank some profits” he wouldn’t have a job the next week, or he would never live it down.

    Get it straight. The market sold off because institutions sold it off. After 5 days up it is natural that some participants would want to bank profits. It did not sell off because of the moon phase.

  • http://evilspeculator.com molecool

    USD/CAD – Scott just reminded me. If you took the inside period short trigger you may want to close out now.

  • convictscott

    I keep saying “if you don’t have rules, then by definition everything you do is a mistake”. Let’s take a poll. Who trades only with rules? The ones I know… Mole, myself, Ivan, Dudeplunger, BobbyLow, AmCabrera, Fearless (great ruleset I have it saved), Volar, Peter Levchenko…

    Who else? Name yourselves! Do you see a pattern here?

  • convictscott

    Also Ultra who used to post here is a 100% rule based trader now. I think Skynard too.

  • AmazingLarry

    I tried to figure out the net-lines for a long time and finally just gave up. Sky posted the code to enter into Think or Swim, I put it in and I’ve been bangin’ ever since. I’m happy to post the script again if anyone needs it.

  • convictscott

    It is at support, for sure, so banking some profit seems appropriate. IMO there is a 50/50 chance that it keeps going to the bottom bollinger or thereabouts. Still seems like betting odds for further downside

  • mrmik3

    .. Yes it did!

  • convictscott

    Trololol

  • mrmik3

    Thanks for explaining the Net Lines.. I didn’t understand either

  • Peter Levchenko

    Nice setup in USDcad. I made good money in it today. I’ve been watching it as well and with the context you and Mole put into it, it made even more sense. From my perspective I can add that Asian central banks have had huge selling interest 1.0280-90 last few days and it was enough to top the market out. Today we had a small capitulation of longs and I saw real money accounts selling large amounts in the market first time in a while. This could be a sign that this move continues but I’ve covered half ahead of 25day MA anyway. Watching EURCAD with interest…. EUR longs had a short lived celebration today… I’ve been looking for a bigger correction today after we failed miserably to break to materially new lows in EURUSD…. What’s interesting is some EUR crosses are breaking key support levels. annihilation in EURGBP today, EURAUD seems to be budging. EURCAD is a perfect next candidate though I see little fundamental

  • Peter Levchenko

    Little fundamental sense in that trade. Canada fundamentals suck…In any case otherwise in pretty flat. In USDJPY I took off cash longs just have options. Price action is beginning to smell ahead of this 100 level. Japan flow data last night showed Japanese have been huge net SELLERS of foreign assets not buyers, which seems at odds with market consensus that they would be exiting Japanese assets in panic…
    On the other hand, we are at 100 in UsDjpy with no material buying of usdjpy yet by japanese. That is quite amazing!!! If they change their foreign asset allocation even by 0.5% more percent that’s like 300 billion USDJPY they would have to buy!
    110? 120? You take a pick… But short term
    It’s
    Vulnerable to a squeeze

  • Joe_Jones

    I wonder what AMC would say about EUR/GBP

  • Ivan

    A bit like a chain letter … I pound into Scott … and he pounds into you guyz … hmmm!

  • convictscott

    Same as anyone would say. Perfect technical top, 3 weakening pushes, a convincing drop and a several week retest to just over 50% retrace. Very convincing drop, sitting right at support (lower bollinger) If that support fails (and odds are it does) then odds are strong it sets off some capitulation

  • convictscott

    Agree completely on pure price basis. Short term vulnerable to a squeeze, long term is acting like a *major* bull market. (jpy that is)

  • convictscott

    What no astrology in your analysis? For shame ;-) I must admit to being biased, the eur move up yesterday looked real to me, but it fell off the plate at the old spike high. The setups I trade, the edge dimishes rapidly with volatility, so truthfully none of my methods are any use at this point,.

  • convictscott

    I think taking half off ahead of 25dayMA is perfect

  • Joe_Jones

    sweet! thanks Scott

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

    Well, the Bullish Percent , there it is, the follow through (uppercut).
    http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=0&mn=4&dy=0&id=p83926831824
    I admit, it’s looking more and more, like a lagging indicator.

    Heck of a divergence, but I don’t short until it turns down.
    if risk wants to run back up, so be it, I will wait for 1600 range, and attack with JJ.
    -DG

  • bravenewworld2011

    I think convention is 5 periods

  • convictscott

    It took years of pounding!

  • Ivan

    Naturally I have to disagree strongly … I suggest it is the observer’s lack of linguistic knowledge and skills!

    But then it does take two to make a market.

  • wvobiker

    I am in favor of continuing the Trend Day Alert.

  • convictscott

    If you want to pull the signal on your charts pull up a $tick chart, the smallest increment you can. If $tick stays 90% of the time or more below zero for the first 45 mins of trade you can call it a trend day. The alert was stopped because the signal dropped in reliability.

  • Ivan

    From my side inspecting a daily bar, sans indicators, provides ample probability-based projection for the next day, as to what is likely to occur … and hence how to play it intra-day.

    In fact, stats support adjusting both Campaign and Money Manegement routines.

  • Basilfawlty

    Ivan-
    This is Rudi (Chicago).
    Shouldn’t you be picking shells on some beach somewhere?
    Will hit you on Skype sometime over the weekend.

  • convictscott

    Ivan there was an old signal, which I stole and improved from John Carter, and Mole coded with an alert. We realized in 2010 that trend days are basically a long running short squeeze, and the best strategy is to get long, pyramid up, and take all of your setups on 5 min charts. The idea is that early recognition of this gives you the opportunity to drop down in timeframe and take setups on virtually any pullback. Sadly it stopped working so well with QEwhatever

  • Ivan

    The one that I am referring to is still very much alive and operational … seems we are on a different page.

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨

    ¨°º¤ S H A K E N ¤º°¨

    ¸„ø¤º° B A K E !“°º¤ø„¸

    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • Schwerepunkt

    There is a crack in the bullish view. Not a Kardashian-sized crack, but a crack nonetheless. Bad GDP number and it’s Friday.

  • Schwerepunkt

    VIX rising. The boyz are getting a wee bit wobbly. Sitting just under the 20-day. If it gets through decisively, the upper BB is the next stop.





    Zero Indicator

  1. poll

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



      view results

      Loading ... Loading ...


  2. search warrant


  3. recent misdeeds

    1. The Fruit Of Our Labor
    2. I Hope You Bought Insurance
    3. Post FOMC Musings
    4. Bear Time!
    5. Head For The Beach
    6. Insurance Is Still Cheap
    7. Don’t buy the dip this time
    8. No Crying Over Spilled Milk (Or Beer)
    9. Entries Do Not Matter
    10. Last Chance For The Bears




  4. yes we can!



    NinjaTrader
    Kinetick