Now Reading
A is for Awesome – The retest variation sell
101

A is for Awesome – The retest variation sell

by ScottNovember 17, 2011

Its been a week of shitty waiting, but it paid off to plan the trade and trade the plan. Mark my card down for 4/4 wins on these (admittedly correlated) trades.

It goes without saying that using the zero made it easier to stick to the plan. Even though I don’t personally use it for my entries, I use it to time exits and I find it WITHOUT PEER! Its the cat’s ass, you should subscribe to it.

All setups should have made more than 1R, so stops should be at breakeven or better.


Now the driver of all this is the obvious resolution of the triangle in $spx.

What story is price telling here? Well after August-November of clearly corrective price action, if the bearish thesis is valid we should see the downward trend reassert itself with undeniable force.

After the resolution of the triangle we have increasing downside breadth and range, indicating that this move is accellerating, not decellerating to the downside.

Odds at this point heavily favor further downside, as bulls should jump now their case is disproved, adding to selling pressure, driving this fucker down.

We *should* see some weeks of downside here. The weekly retest variation sell has been triggered, and although I’m not fond of targets, it is not unreasonable to target 1020 $spx here.

You read right! 1020!

Now ANYTHING AT ALL that does not look like a straight downshot, this makes the bearish case very very stinky.

Why? Well no bulls in the world could possibly argue that the last 2 days is bullish, therefore bulls en masse will be selling their holdings. If that additional selling pressure is NOT ENOUGH to drive price down, the market is giving us a powerful clue that there is no bearish outcome in our future.

As usual, staying unbiased and objective is the way forward.

Scott

p.s. Here is the Retest Variation Sell rules, for your reference.

Retest Variation Sell (reverse for buys)

1) Significant high.

Definition: The highest high in the most recent 10 bars OR a bar that
breaks a previous SPIKE HIGH OR applying common sense a high that looks
significant to an educated trader.

Definition of a SPIKE HIGH: Bar that makes a high with a lower high
immediately before and immediately after it

2) One or more lower closes (lower than the close of the previous bar)

Clarification: this lower close CAN happen in the same bar as the
significant high. (eg the dow jones at the ultimate GFC lows, attached)

3) One or more higher closes (higher than the close of the bar that made
the (2) close

Condition: Must be within 5 bars AND NO MORE of the significant high.
Condition: Must NOT break the significant high (although if it does it
becomes a potential fakeout sell)

Setup complete

Sell 1 tick below the break of the low that completes the setup (3) with
a stop 1 tick above the high of the bar that makes the setup


About The Author
Scott
  • http://thefxspeculator.blogspot.com Onorio

    Mole if you don`t mind i have a question :)

    Where would you put your stop in the USDCAD trade? at the NLSL, 10070 area?

    I`ve noticed that after we breach the net lines we get some retrace, my question here is where to place the stop, and if it`s not better to wait for a 38/50% retrace of the breach to take position.

    In the USDCAD we breach the NLBL at 1.0245 and retrace to 1.0070, now the move is resuming so going long after some retrace of the NLBL line would not be a bad idea.

    Opinions?

  • http://thefxspeculator.blogspot.com Onorio

    Convict is on fireeeeeeeeeeee! :)

    You forgot AUDUSD daily RTVS, that i take at 1.0160

  • Anonymous

    Excellent CS!
    There were some doubters along the way, but your setups came good in the end!
    (of course it all probabilities, and one cant expect every setup to work, but great example of sticking with a system & set-of rules!)

  • nyse

    Love it. Thanks, Killa.

  • Schwerepunkt

    EOD short-covering weenies; or is it covering short weenies?

  • Anonymous

    No VIX buy signal. So long biased rats watch for those falling blades.

  • Fibz

    seeing some disconnect in the triangles. some things broke, some things didn’t. also EUR/USD holding up today.

  • Marcus Troyka

    Just wait, we might still see 1500 on the SPX!

  • http://evilspeculator.com molecool

    ????????????????????????????????­??????????????

    D   A   I    L   Y      Z   E   R   O     H   A   S      B   E    E   N      U   P   D   A   T   E   D

    ????????????????????????????????­???????????????

  • Anonymous

     the swaps that are probably going on between the Fed and ECB is a telling sign of the tight funding conditions. Not to mention I wonder what sort of stretch ways European banks are getting illiquid assets to liquid asset to pledge as collateral for the ECB loans. 

  • Anonymous

    In loving memory of SLV : http://www.youtube.com/watch?v=auFtHzMJ7NI

  • Anonymous
  • Anonymous

    And it’s a doozie

  • Anonymous

    with those eyes I am sure you can’t miss

    😉

  • http://practicalt.blogspot.com/ Gold_Gerb

    BullishPercentishido follow through.

    http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=0&mn=1&dy=0&id=p99049429938

    true, I didn’t go short today.  but at least I didn’t oppose it and try long.
    maybe I have a rat tail after all.
    -GG

  • Anonymous

    haha. I love hunting in real life and markets.

  • http://practicalt.blogspot.com/ Gold_Gerb
  • Anonymous

    this is why you need the zero. Without it, I wouldn’t dare to play these moves as I do now. Too fast and therefore too stressful to my taste.
    Stay out then, or if you play, trade lottery size bet. Scott’s comment above is a crystal clear plan. 
    If the down move is real, it has to have legs. No pussyfooting. And zero is very good at telling you what is real or not.
    The elevator hasn’t reached Ground Floor yet, and you have one big “T” ending on the 23rd. I think Christmas is coming early for the bears. Time to bank some coin.

  • http://evilspeculator.com molecool

    I think Yahoo’s spam filter has been overrun. They were down an hour ago and now I’m seeing tons of crap. Amazing how broken their service is…

  • Anonymous

    Yup. Same for me.

  • Fibz

    still accumulation

  • http://practicalt.blogspot.com/ Gold_Gerb

    EUR/USD update.

    (GG looks around)
    where’s Skynard?

    http://i44.tinypic.com/161cgpg.png

  • Anonymous

    ok can you explain what you expect from this chart.

  • Anonymous

    Drinking his oil short gains! Hes probably spent it all by now.

  • Anonymous

    Lol, that’s purrty! A slippery slope – yes;)

  • Anonymous

    I think he is saying that will go to 1.31- 1.32 ish

  • nyse

    Where’s that ‘ol Carrot? Vaca?
    Mood is getting kinda bearish out there (ZH notwithstanding). 

  • Anonymous

    nyse, don’t know what to make of it myself.  Couple fellow traders suggesting crash.  I’m lost to be honest.  Not sure what to think.

  • http://practicalt.blogspot.com/ Gold_Gerb

    bingo.

  • Fibz

    GS may be right after all…

  • Anonymous

    You are a coin Artist GG!
    */;-‘)

  • http://evilspeculator.com molecool

    I told you guys what to look out for – the rest is pretty much procedural.

    Rule #1: Don’t over think it. 

  • http://evilspeculator.com molecool

    Check the ZeroFX’ 60-min AUD/JPY panel. Great setup as we also have a net-lines box to structure entry and stop positions.

  • http://evilspeculator.com molecool

    I just sent out a pertinent email and a chart to all subs – please check your email.

  • http://evilspeculator.com molecool

    Anyone?? Where is my night crew?

  • Skates

    Here and watching! 😉

  • Anonymous

    For reasons not clear, I am unable to subscribe on a recurring basis, using PayPal.

  • http://evilspeculator.com molecool

    CRAP – is anyone watching currencies? Cable and EUR going wild!!

  • http://evilspeculator.com molecool

    Did you send me an email about this? If you can pay for non-recurring then you can pay for recurring. Anyway, if you can show me that PP is giving you hassle I will reimburse you the extra $10 every month. Anyway, email me – will respond tomorrow after my post.

  • http://evilspeculator.com molecool

    Well, are you watching THIS? :-)

  • http://evilspeculator.com molecool

    BIG moves in EUR/JPY and cable in the past 20 minutes.

  • http://thefxspeculator.blogspot.com Onorio

    And AUD, even USDJPY has moved! WOW! I bet this move will be erased in the next hour…

  • spicestory

    watching it, AUD/JPY is rather mild

  • http://evilspeculator.com molecool

    Alright – turning into a pumpkin – you guys are missing out on some easy pips here!

  • http://evilspeculator.com molecool

    Yeah, but it’s moving in the right direction (per the setup I mailed out just before all hell broke loose).

  • Fibz

    i think george soros got your email.

  • http://evilspeculator.com molecool

    You never know – don’t predict, mate – just trade the tape you are given.

  • http://evilspeculator.com molecool

    He keeps begging me to come work for him – told him I’m done slumming for Euro-trash.

  • Anonymous

    I really appreciate the email. Would have missed it otherwise..

  • http://thefxspeculator.blogspot.com Onorio

    That is what i do, in longer time frames to avoid whipshaw like this.

  • http://thefxspeculator.blogspot.com Onorio

    Well i guess i was right +1 to me 😀

  • http://practicalt.blogspot.com/ Gold_Gerb

    Now ANYTHING AT ALL that does not look like a straight downshot, this makes the bearish case very very stinky.

    /ES green 14 handles?
    dirty diapers.

  • Anonymous

    Maybe a minor green close with much lower volume than last 2 days will make it less stinky.

  • http://practicalt.blogspot.com/ Gold_Gerb

    IMHO, looking at the DOW futures.

    it’s a F’n ramp-n-camp brother rats.

    (JJ is not going to be happy about this!)

    http://i44.tinypic.com/24uyfcm.png

  • http://practicalt.blogspot.com/ Gold_Gerb

    one more chart.

    ring wraith update (i’ll be gobsmacked, it worked)

    http://i39.tinypic.com/2i8gqc6.png

    I wonder if Skinny kept his calls overnight?  

    that’s the way to do it.  your money for nuthing and your calls for free

    (GG runs off into the morning dawn)

  • Anonymous

    I think we go revisit the acceleration line on the daily. What happens afterwards will be key for the rest of the day/next week. Btw nice pic of my cousin Pete in the background. 😉

  • Anonymous

    Is is my firm belief a priori that the ECB will monetize all debt over the weekend
    With this, the financial crisis will be averted, and prosperity restored.
    Long Live the Euro (lol!)

  • Anonymous

    Question is when!  They’re all going to do it imo.

  • Anonymous
  • Anonymous

    Crazy as it seems…what happens if they all print at the same time?

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    I think we need to see blood in the markets first.

  • Anonymous

    Im just seeing if the situation is comparable to the US/UK situation in 2008/9 with all tbe bailouts, although that was a banking crisis, while this is a sovreign debt crisis :-)

  • Anonymous

    test – no comments in 57 minutes? I guess it’s OK, I just refreshed

  • Anonymous

    Gold will go to the moon..

  • http://thefxspeculator.blogspot.com Onorio

    Bought the 50% reatrace of the 4H NLBL on AUDUSD at 1.0030 SL at 1.0005

  • Anonymous

    love the smell of profits in the morning.. :)

    took that AUD long with a tight stop and limit buy at the top of the mini channel (1h chart). worked like a charm.  ty!

  • Anonymous

    They are not unrelated!  The bank crisis was “solved” by moving all the bad debt of the banks on to the sovereign balance sheets.  At the time, people were quite loudly speculating as to what would happen when the weight of them caused the sovereign credits to crumble.  Iceland crumbled immediately (couldn’t begin to nationalize the debt).  Ireland rather foolishly took on the debt before counting it and is bowed under the weight.  Interestingly, Italy does not appear to have had reckless banks to bail out, but the receding tide of capital willing to accept sovereign risk has laid bare their fundamental weakness.  All in all, the capital markets are telling the sovereigns:  no reason to think Argentina can’t happen elsewhere.  Heck, history repeats itself in Argentina about every 20 years ….

  • Anonymous

    Yes, i was thinking re Argentina scenario (also Russians defaulted sometime 1990s??)

  • Anonymous

    I am floating down the $NILE, come and join me, i dont think freshwater crocs exist!

  • Fibz

    and the ruble is gaining on the dollar now… lol.

  • Anonymous

    Dont mess with the Rouble Mafia !!

  • Anonymous

    Made it back, my car is in the shop and you can not trust anyone these days! Added calls here;)

  • Anonymous

    Going for a ride to 1240 and will be placing a substantial short at this mark. Looking for a significant reaction off of this back test:)

  • http://evilspeculator.com molecool

    One guy out of all my subs – well good for you but I need more subs in other time zones.

  • http://evilspeculator.com molecool

    I see a lot of talk here this morning but only one guy took last night’s AUD/JPY setup??

    Embarrassing…

  • Anonymous

    Missed that one! Nice call brother;)

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    Hey Mole,

    I took the trade and made an easy $300 bucks. (I’ll extend my subscription when it’s up for review)

    Cheers buddy.

  • Anonymous

    I’m sure there were more! some don’t post, some still asleep 😉  

  • Anonymous

    great work!.. i took the trade and still have a potion left 

  • http://evilspeculator.com molecool

    Ahhh, good to hear that :-)

  • http://evilspeculator.com molecool

    Good show!

  • http://evilspeculator.com molecool

    Un-for-givable!

  • http://evilspeculator.com molecool

    What is this? ZeroEdge?

  • Anonymous

    If I can step inside my “wayback” machine I will certainly take it!  Some of us non-vampires saw the email a little later than others.  However, awesome and timely

  • Anonymous

    I saw the call and missed it.  My loss.

  • Anonymous

    thanx.. i like the new mole.. less about p3 and more about banking coin :)

  • http://evilspeculator.com molecool

    That old Mole was taken out at dawn and given a blindfold almost two years ago.

  • Anonymous

    I’m on the west coast, but it’s the west coast of Michigan… I was asleep.

    On a serious note, I’ve not traded currencies. Can you or one of your minions direct me to useful sites or books to learn about trading currency pairs?

  • Tronacate

    Looks like neg div on the zero…….this downside should get rolling soon…….looks like a bear flag

  • Anonymous

    Crude got stomped and is far outside the lower hourly Bollinger right now, seems to be finding support on the 200d SMA though.

  • Anonymous

    and there’s positive divergence on the hourly

  • Anonymous

    Both /ES & /CL back tested on the 5 min let’s see if we get a reaction;)

  • Anonymous

    I took it and banked enough coin for a few more years with the zero:)

  • Anonymous

    I took it and banked enough coin for a few more years with the zero:)

  • Anonymous

    Is the ES site down – not loading, im using mod panel to write this

  • http://evilspeculator.com molecool

    You read my mind – just about to put up a post. I take it you saw my post ‘Crude Awakening’?

  • Anonymous

    Were Baaaaaaack!

  • Anonymous

    Just a long Seinfeld episode on Zero during the downtime anyway (i.e. nothing happened….).

    We’ll have to see where we end up today.  In the pre-market, it certainly seemed that a significant bounce day at least was on tap.  That more or less fizzled and a couple of spirited attempts to get the bears’ animal spirits fired up also fizzled.  We are now sitting on a flat-lined zero with a market showing every indication that it will hug the “unchanged” line.  Last minute heroics are of course possible (and increasingly normal).  My point though is where an ambivalent tape like we appear to be printing is going to leave us vis a vis the comment ”
    Now ANYTHING AT ALL that does not look like a straight downshot, this makes the bearish case very very stinky.”

    Bulls can’t mount a rally (yet) and bears can’t take the ball further down the field (yet) but we have busted through the triangle we were in. 

  • 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

    Sleep is for closers.

  • http://evilspeculator.com molecool

    In the corner with you!