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Back From Whence We Came
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Back From Whence We Came

by The MoleAugust 3, 2012

Allow me to quote yesterday’s setup on the E-Mini: “What’s important to us steel rats on the outside is that we are about to reverse an old NLBL (it is officially expired) and may just drop back below that 100-day SMA. Yeah, maybe it’s a fake out – thus we are long as we stay above it and short as soon as we drop below the ole’ Maginot line.

Well, Ms. Market did try to fake us out but in the end the spoos held the 100-day SMA at the bell. Which means you were either back in cash or long with a stop right below that 100-day SMA. Obviously I hope it was the latter – but of course nobody could have predicted such a huge jump one day later. As the old saying goes: Sometimes it’s better to be lucky than to be good 😉

Another setup we got lucky with is gold. I suggested yesterday to take some short positions off the table and if you did then all that’s left in the running are those lottery tickets we kept for a touch of that NLSL. As we are now right below both that upper diagonal and the 100-day SMA it may soon be time to pull the plug. Personally I will keep mine in the running until we breach both resistance lines looming above. If that happens then I want to be long. Yes, again – I have an inkling it may be worth the pain. I can be rather persistent if I see a good thing in the works.

One setup that finally rewarded patience and admittedly mind numbing discipline is the AUD/JPY. While we experienced quite a bit of whipsaw on some of our other FX setups (and that’s an understatement) this one was clinging to its 100-day SMA like Scrats to his acorn. Plenty of opportunities to get positioned with very little risk. And finally today – lift off! Obviously it’s very tough to make any predictions with sentiments swings like we have witnessed in the past few weeks, but I’d say this one has pretty good odds of holding its Maginot line and perhaps even going all the way.

Otherwise I see very little that I would touch with a ten foot pole right now – all that whipsaw has introduced a certain degree of noise into our charts. This tape has become way too emotional and the slightest trigger now causes wild swings, having us alternate between short squeezes and long squeezes (the P&F I posted yesterday makes that very point). What we need right now is to let the technicals catch up with the tape a little. The danger of wild gyrations like this is that you may start trying to force things and in the end resort to over trading. Best to slow things down while we’re ahead – ergo let’s call it a week and wait for better odds, shall we?

Enjoy your weekend!

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.
  • Tronacate

    Closed out both my gold short and ES long……no reason to get greedy.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/95663281-9c5c-405b-91c0-485b97f6f2f9/2012-08-03_1334.png
    I forget who mentioned it but until we reached 1325, which would be a danger zone, I think everything is pretty well supported for now.

  • bdoone

    Funny, I had this chart up yest. after close and just pulled it out of my ‘history’.  What was a nice red candle turned into a helluva hammer once I refreshed!  Truly, what a difference a day makes in this market.

  • DarthTrader

    3 days may be even more interesting

  • Darth_Gerb
  • Darth_Gerb

    /ES 1389
    it go so quiet.
    will 1400 hundred be hit, stay tuned! 

    freakin soap opera. (the tape)
    off to lunch.
    Lost causes can do that.
    -DG

  • DarthTrader

    Looking at the /ES 15 min chart this sideways action is very much like the sideways action at the 1361 area last night then early this morning liftoff.  Bull Flag . . .  Do we have to wait til Late Sunday or Early Monday?  Could be . . .  

    Many traders will be taking profits going into the Weekend, I have and rebalanced my positions.

  • StrikeFirst

    The bird?

  • newbfxtrader

    @ AMC you must be happy today! @sky good call on /cl thx!

  • Joe_Jones
  • AMCabrera

    mmm eur/usd could not pop 1.2400 I have to pull then. Ever since oanda changed their policy I cant get an early look over weekends and that 3 pm open is no joke, I dont know where it will open so I rather take the healthy profits here.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/c73a92dd-f8e2-4c61-929a-5b12a51da1a4/2012-08-03_1627.png
    another reason why I had to pull here. No clue what could happen here, does anyone know could this qualify as a inside day or is it too wide.

  • AMCabrera

    “The danger of wild gyrations like this is that you may start trying to force things and in the end resort to over trading.”
    Very good advice!

  • Skynard

    Hell of a day Bro, time to do a little traveling and enjoy the w/e. Congrats!

  • Skynard

    Left on the table-
    Long /OJ
    Short /ZB

    I’m out of here!

  • Darth_Gerb
  • Joe_Jones

    We have significant negative divergences on the risk on trade. Check out the 60  min zero, trin, nymo, nysi, NYADV:NYDNV 

  • AMCabrera

    I always try not get happy or sad. I just do it and say hey some money Ill take it. BUT HEY look at yourself mr. newb with the eur/jpy soon that name will have to drop. You have changed so much.

  • Fibz

    The higher this market goes, the harder it is to keep it there. Just like the progressive resistance experienced when doing bench presses with rubber bands attached to the bar. The elastic resistance will also cause it to snap back with more force the higher it goes.

  • StrikeFirst

    “The market can stay irrational longer than you can stay solvent.”

  • DarthTrader

    Venus Retrograde occurs just over every 18 months.  Over the last decade it has occurred at very important turns in the S&P as you can see from the Weekly Chart Posted.  The parallel Blue Lines show the beginning and ending of the Retrograde Period.  In Oct 2002 the inception of Venus Retrograde nailed the lowest low in over 5 years.  In Mar of 2009 another Venus Retrograde inception nailed the lowest low of over 6 years.  If you look at these two dates from both sides then they nail the lowest low of the surrounding 10 years.  

    So that is Venus Retrograde at the lows, nice track record worth noting when Venus goes Retrograde.  Well Venus went Retrograde on May 15th and went Direct on June 27th but this time frame is not one of a market heavily oversold quite the opposite, in fact.  So looking at the 3 highs on the chart one thing they have in common is a high before Venus goes retrograde in 99, 07 & 12 followed by a sell off into the middle of the Retrograde Period which is much more apparent on the Daily Chart.  Then a reversal up rallying up past the date where Venus returns to the Location where it went Retrograde.

     . . . I’ll finish Later

  • Fibz

    I’m still basically flat, short/long.

  • Darth_Gerb

    Confidence Level has recovered to January levels.
    while I expect tom foolery next week..
    I must carefully watch the neckline and ditch emotions.
    The Market will do what it will do.

    http://s12.postimage.org/6or3rurwt/temp3.png 

  • newbfxtrader

    Thx AMC. Licking my chops looking at eur/aud. Fancy that pair?

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/7dfd70ad-90b7-44b4-a93d-fa0c7ec930ba/2012-08-03_2104.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/c82fa2cf-b2ae-4f2c-bc7c-20cec983e7d5/2012-08-03_2113.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/25acbe8d-be3f-4621-bbc4-ef65fcc3169f/2012-08-03_2109.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/0515ca32-473e-4968-b50c-0b9b71bdc7df/2012-08-03_2106.png
    you know that is one pair that I have not considered in a very long time to afraid of the rip higher that occurs in that pair. I think it was fibz that brought it up one time and I warned of pending sucker move to the downside but I started going long to soon, sucker move was longer than anticipated, after that I just gave up on it. Obviously, it looks like it was the easiest trade past two years. Daily chart has been ONE LONG MOTHERFUCKING sucker move. But newb you may be on the biggest trade of the month. I’m looking at weekly chart and there is no doubt Im going long this pair on sunday.

  • newbfxtrader

    Thx senor. Just wanted your input on it. Much appreciated. If you look at weekly aud/usd seems like coming up against long term resistance levels. COT positioning on Euro is easing for the time being.

  • newbfxtrader

    Bit of a divergence on price vs rsi on daily with RSI peeking above 30 for now. I think we could have a winner.

  • Joe_Jones

    The higher a monkey climbs, the more he shows his butt

  • http://evilspeculator.com molecool

    Much much much much much much much much much much much much much much much much much much much much much much much much much much much much much longer.

    (did I miss one?)

  • AMCabrera

    First Japan with the huge shocker now South Korea. I have to say I enjoyed seeing South Korea take out GB.

  • Th3_Acist

    If only I had known this before I started…;-)

  • StrikeFirst

    Ok, so I’m looking at P&F charts, and I’m thinking the following:

    As a swing trader, wouldn’t it be wise to simply go long when an “X” prints and to go short when an “O” prints?

    I understand that P&F charts don’t factor in time.

    But if you’re trading options and gave yourself…. say, 2-3 months… it seems to me that you would do very, very well.

    Any thoughts on this?

  • DarthTrader

    Here is the daily chart of the last 4 Venus Retrograde Periods

  • http://evilspeculator.com molecool

    No, not really – you want to break the P&F patterns when they break out. I have been covering this repeatedly here – are you a sub?

  • newbfxtrader

    No clue how to read them but your targets seem bang on!

  • BobbyLow

    As a fellow swing trader, I wish it was that simple.  :)

    I believe this to be especially true if you want to trade options using P&F because of time constraints. There can also be large drawdowns while waiting for a potential target to be hit.  Remember, P&F does not factor in time.  

    OTOH, I think it might be possible to trade options using P&F but I think you might need to adjust your Period of time on your P&F Chart to a shorter time frame and – OR Box Size, and – OR your Number of Boxes that signify a reversal, OR even all three.  I also think that it is important to understand that just because a reversal takes place from X’s to 0″s or the other way around that it does not necessarily mean that a change of trend will take place that sticks around for any length of time.  

    I’ve only studied P&F for a relatively short period of time and have a lot more to learn. But I’ve found that there are many patterns and signals given in P&F.  Some of these signals and patterns are much stronger than others.  This is where it can get a little tricky.  Yet, I still believe that P&F is a worthwhile tool and will continue to study it.   

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

    This market could go much higher than everybody thinks too many bears, joe p still taking money out , Europe still dominating the “news” now for the last 3 years and where are we? Down 40%? NO! A push to new highs THEN think about the Real BEAR trade!

  • newbfxtrader

    Yes of course. Too much “world is ending” news for quite some time as I have commented many times before. Its difficult for markets to crash when that happens. 30% bulls now. That’s not enough for me to short. 40+% and I will reconsider.

  • gsavli

     are you talking about the olympic games or something else here? :)

  • gsavli

     yep.

  • MrMargin

    NYSE A/D continues to look questionable despite everything else looking bullish: http://scharts.co/Nqt1gZ 

    New Highs-New Lows also paints a divergence: http://scharts.co/OCn0gT I admit, I have no idea what to make of this.

  • AMCabrera
  • Jake_38

    Your map does exemplify the geographical importance of Turkey. Turkey is a key  democratic establishment in that entire region..As other governments shift to a more representative form; Russia’ China, Iran, will in my opinion continue to block any pro democratic shift that occurs.  However change takes time and unfortunately your stats show lives lost during this time of transition.

  • AMCabrera

     What breaks my heart are the families that get ripped to shreds while the powers get shifted around at the top. I cannot imagine nor want to imagine the truly horrifying experience of seeing your normal life become a inferno.

  • 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„¸
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  • Jake_38

    Agreed