Now Reading
All Quiet On the Western Front
49

All Quiet On the Western Front

by The MoleMarch 21, 2012

On the equities side that is – feels a bit like a sideways correction to me. First I thought I would not have much to contribute today but for some reason a bunch of setups materialized today, which makes me a happy camper:

Let’s start with coffee futures which appear to be in the process of painting a floor. Not this first attempt will succeed but since we don’t have a crystal ball we’ll just have to go with the setup. I’ll be long on a breach of the lower 100-day BB near 186.50 – set your watches.

Here’s Volar’s coffee sentiment chart – looking like a potential floor to me.

Soybeans dropped through the NLSL and then bounced back. I love setups like this and you can either be long here on a breach and close above OR stay short as long as that breach does not materialize. Maybe the long trade has the bigger odds given the ongoing trend – but if she goes down it may start a long squeeze.

Volar posted some sentiment charts yesterday that suggested that both commercial net positions (i.e. hedgers) and large specs (i.e. the big boys) are reporting stats that would suggest we are near a top here.

Okay, below a few more goodies for my subs – please step into my fumigated lair:

[amprotect=nonmember]
More charts and cynical 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.
[/amprotect]
[amprotect=1,13,9,12,5]

Wheat is starting to look like treasury futures a few weeks ago. Technically I would want to be long here near 6.31.

And according to Volar’s COT map this may indeed be the way to go.

The 10-year treasury futures snapped back with a vengeance yesterday. I think someone on the board actually suggested that – congrats on making that call – I hope you traded it as well. In any case, in the context of the trend trading story I presented yesterday that 128’300 NLBL is where I’ll get a bit more excited. To be clear – it would be very interesting to see a failure there and if you are in it long term you should watch this resistance cluster closely.

On to currencies – the AUD/USD is sitting right at support and this should be good for a long trade. But you know the drill – a stop out triggered below that 100-day SMA near 1.04 leaves nothing but air below so be ready to flip that coin if necessary.

AUD/JPY also decided to join the fun – it dropped through one NLSL and stopped at the second – that old tease! I am more excited about a trend continuation here as the 25-day SMA is not far from here at 86.54. Which means I would not want to take a short trade on a breach here just yet – that SMA would be my inflection point.

EUR/USD – looking bullish as it has been holding the NLBL thus far. I know those candles look a bit bearish but a push above that 25-day SMA would get me on the long train.

And last but not least – what a sweet setup on the EUR/AUD – Señor Cabrera’s (second) favorite pair! Be long here on a close above that 100-day SMA and possibly enjoy a ride all the way into 1.33 or higher. I’m pretty excited about this one – but bear in mind that good things often require patience. So don’t be surprised if there are attempts to throw you off the saddle.

[/amprotect]

Cheers,


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • volar

    oh on coffee… unreal – cant say i play that market, but sentiment is nuts overthere

    http://content.screencast.com/users/wprosser/folders/Jing/media/c702c84d-bb85-4f5d-80b8-7fed6b0a93c6/2012-03-21_1255.png

  • http://evilspeculator.com molecool

    Screencast seems to be down again – can you please email me that chart so i can add it?

  • volar

     ya i will try- my crap just went down too

  • Anonymous

    Hmmm . . . too quiet

    Though Bonds are rallying somewhat.

  • Anonymous

    Soybeans also had an Inside Day and a RTV Sell setup.

  • http://evilspeculator.com molecool

    Added coffee sentiment chart courtesy of Volar.

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

    Market Closed.

    *cancel all bids, cancel all bids*
    fun to say it.

  • Schwerepunkt

    Fizzle . . . 

  • Joe_Jones

    Wow! AAPL closed red: http://stockcharts.com/h-sc/ui?s=AAPL&p=D&b=5&g=0&id=p37521728198

    [JJ rub eyes and pinch himself to make sure it’s real]

  • http://iberianviews.blogspot.com/ catracho

    nice NDX reversal

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

    /ES 9pm
    ..not sure if the fib fan line holds. it will, right?

    http://i42.tinypic.com/abrxo4.png

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

    dam it!
    I just realized amygdala may actually have skill!
    😉

  • 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

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

  • Joe_Jones

    I am waiting for his call to BTFD

  • Anonymous

    Mr. counter indicator himself is now 90% long:
    http://www.businessweek.com/news/2012-03-20/biggs-boosts-bullish-bets-on-stocks-to-90-percent-net-long

    Also, I’ve heard that GS recommends going fully into equities.

  • Joe_Jones

    Hear, hear

  • http://pulse.yahoo.com/_IF7HINHIP5ITYT6TDHACMWJUXQ Huisok

    so will he go to 100% or will he be selling now.

  • Anonymous

    Good question. It would of course be a classic maneuver to tell the public to buy and then offload your holdings to them. If he’s worth his money as a manager, that’s what’s on his mind.

  • Anonymous

    Inside day on the SPX, also /CL and /GC, /SI and /HG. This should be fun!

  • Anonymous

    Is the smart money getting into bonds before the equity sell off drives bonds prices to their final high of this 30 year Bull Market?  That has been my hypothesis so I’ve been selling in the money April TBT Calls and buying June & Sept Calls at same strike this week.  Very inexpensive trades to put on yet with potential of a powerful upside.  The downside is I’m selling ITM calls and they could be called away.

     Does anyone have the stats on what percentage of ITM Calls are actually called away before options expiration?  It’s my understanding this is rare before options expiration.

  • http://www.mylifemytrade.com/ MyLifeMyTrade

    Looking for inside day on SPX is misleading as the opening price of SPX is meaningless.

  • Anonymous

    Well, Scott uses it on the SPX and he’s the local authority on this setup, so I respectfully disagree.

  • http://evilspeculator.com molecool

    I’ll do a post on it later tonight.

  • http://evilspeculator.com molecool

    Would have to agree with Mr. Margin.

  • Galazkiewicz

    Margin-  I know that Scott takes set-ups using $SPX, but trades /es.  Do you know if he waits for a break of the daily high or low in NYSE trading hours, or will he take the trade in after hours.  Maybe that’s a better question for him.

    Scott- if you’re around, can you give me some advice.  I believe I’ve read in the past that you’re not a fan of /es trading in after hours/globex.

    Thanks in advance.

  • Kudos

    Don’t have stats but a little personal experience. It is rare for it to happen but it is a risk and its based on the amount of time to opex and how much time premium, theta, are in the options. Basically, if your calls start trading with no time premium, that is, they are all delta (e.g., when the stock is 40 and you 30 strike calls are trading for 10.05), you are at a much greater risk of having the option exercised and giving you a short position. If you aren’t too levered up, you can still feel comfortable if you are right with your strategy because you will just have a short position and a long call.

  • Anonymous
  • Anonymous

    Thanks for the reply

    Yes, the less time premium the cheaper the trade but that increases odds of call option being exercised . . . seeking the right balance.   If you look over at the Put side to see if any put premium it gives you a quick idea of what the premium is at a given strike

  • Kudos

    Sell order or buy order?

  • Anonymous

    I am thinking sell. About time….

  • Anonymous

    both sells. 

  • Anonymous

    Velocity of Money continues to ignore everything the Fed  throws at it

    http://research.stlouisfed.org/fred2/series/M2V

  • Anonymous

    HI Mole,

    My gut told me we were close to a buy in Coffee.

    Thanks for the charts

    Aaron

  • labdude

    He may have skill–and may be the smartest person in the room, however, the problem with his posts is backing up his statements with a chart or data–or at least that his magic 8 ball told him which way the market is going.  I’ll continue to lurk.  

    Hey RBW–a song for you–if you’re still a Hendrix fan.

    http://www.youtube.com/watch?v=W55Smyyzs58

  • Anonymous

    Your not kidding, JPY having a good day:)

  • http://evilspeculator.com molecool

    And your gut has proven to give you what edge? 😉

  • Anonymous
  • Anonymous

    u could try usd/jpy short for a retrace.

  • Anonymous

    Yeah of course long term we are going to pay for all the QE and bond buying and crap but short term just follow moles setups. Taking a boat load of money from the general population and giving it to the banks doesnt do wonders for money velocity.

  • Anonymous

    double helpings on all you can eat buffet nite

  • Anonymous

    We are in a Deflation that precedes the QE.  The QE is the Feds attempt at overpowering the Deflation not gonna happen,   Hubris writ Large.

    Bernanke thinks he can print his way out of it.  Not working out so well.  Guess he made the wrong conclusions when he studied the Great Depression

  • Anonymous

    2013-15 will be years of enlightment

  • Anonymous

    Hubris yes. But he is following his own script mistaken as it is. I only wish I had the knowledge earlier. I could have front run the fed for example by buying bonds etc Markets have a way of putting central bankers in their right places. Timing however is an issue. Look at Japan to see how long this can stretch out.

  • Anonymous

    QE is the central banks way of trying to make reserves for credit already extended by member banks. Credit comes first reserves later.
    http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/
    http://globaleconomicanalysis.blogspot.com/2009/12/fictional-reserve-lending-and-myth-of.html

  • 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„¸

    The Mother of all inside day posts.

  • http://evilspeculator.com molecool

    I prefer to take the money.

  • http://evilspeculator.com molecool

    hehe :-)

  • Anonymous

    Cant wait, please enlighten us now :-)

  • http://www.mylifemytrade.com/ MyLifeMyTrade

    I am 110% confident that someone as good as Scott won’t do such a screw up. I am quite confident he looks at ES daily chart for RH only.