Now Reading
Before The Finale
121

Before The Finale

by The MoleJune 24, 2009

1:34pm EDT: We’re about 45 minutes away from the ‘big finale’ in this month’s kabuki dance. I decided to cut my December puts at the bottom of the drop to 906. Here’s why:

What I’m seeing right now looks like either we completed some weird a-b-c – or we are in the process of painting a motive wave. I have some doubts as to this being a flat as the c wave would be hugely unproportional. So, keeping with simple/stupid I couldn’t help but think that this ‘may be’ a first leg up. Which would be followed be a little dip and then a rally busting above the 956 highs.

Of course we could just roll over after 2:15pm and I’m SOL. What actually was the straw for cutting those puts was the 6/25 turn date. We either drop like a rock after the announcement and paint a significant low – or we bust higher and paint a new high. In either case I have a better chance at getting positioned at either extreme – whichever is going to play out. I looked at a few Dollars worth of profits remaining in those Decembers and decided to cash my chips. Call me overly cautious – but that’s how I made it through this year with green in my account YTD – not many traders can say that (unless they work at Goldman Sucks).

It might actually be worthwile putting a few bucks into some OTM lottery tickets but I’m sure the volatility has already been jacked up on those.

As per the wave count – I’m a bit split right now: Only a pretty explosive move will bring us to a new low or a new high. The odds right now are 50/50 for each of those scenarios – and I decided that I didn’t like those odds. Hope this makes sense.

Remember – there are old traders and bold traders – but there are no old bold traders 😉

2:30pm EDT: Well, looks like I did a great job selling my puts around the top – LOL. Well, I actually dropped them around SPX 906 – at least not at the very top 😉

Meh – I can live with my decision – never been much of a gambler and the news about Bernanke conviently pushed right before the announcement was not coincidential.


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.
  • Keirsten

    I'm on the same page Mole. I'll trade when the dust settles.

  • troym

    why is everyone so jealous of the Goldman traders? If you traded on a real trading desk in a big 5 investment bank you wouldnt be, trust me.

  • BigHouse(Aka Mr Vix)

    The DOW will be up 700 points at the end of the day lol

    weeeeeee

  • Count_de_Monee

    I'm also 100% cash right now. Got stopped out overnight from my ES and euro shorts for a small profit.
    Now I'm just waiting although my gut tells me we pop and then drop.
    We'll see.

  • eunsuh

    we'll spike at the announcement, that's when I'm shorting this pig. LOL.

  • http://alphahorn.blogspot.com/ alphahorn

    great post Mole, that captures the moment.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Sol bought 1/3rd of a million worth OIH OTM calls this morning.. crazy stuff

  • BigHouse(Aka Mr Vix)

    He just sold them at 3.5-3.25

  • http://www.mylifemytrade.com MyLifeMyTrade

    Phew.. I was getting nervous thinking of what he might be going through.. LOL

  • molecool

    Sarcasm – look it up.

  • Eric_in_SFL

    Trading with Tax payer money, insider information, $400K a year, Penthouse and a Ferrari. I'd be happy to trade places.

  • C C Rider

    Big move coming. Question is, which way. Going to see Clapton tonight!

    http://www.youtube.com/watch?v=TMR_3BJCmh8

  • TexEx

    I like your style, mole.

  • Keirsten

    I'm jealous, you lucky duck. Report back tomorrow on how it was, okay?

  • BigHouse(Aka Mr Vix)

    get ready to rumble

  • C C Rider

    Yes Maa'm!!

  • annamall

    Great CC on seeing Clapton! wow that's awesome Have fun!

  • MaxPainMan

    100% cash

  • dullmind

    Thanks for the your hard work, bailed my SDS and TZA positions this morning thanks to your somewhat (to me)
    cryptic warning. I did believe we had left P2 and were in P3. Now in cash until we see different.

  • thelefteyeguy

    wow…sinking feeling

  • MaxPainMan

    wow!!! /6J taking a nose dive….. shouldn't have covered…..

  • http://alphahorn.blogspot.com/ alphahorn

    the assholes are making sure they take out all stops before the definitive move

  • thelefteyeguy

    looks like market doesnt no how to interpret the news…

    no change in rates cited still weak economy…

  • fuw

    Feels like non-news to me. What else was espected?

    I'm staying put (bad pun intended).

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    Alpha, what's the count on that? I have it as WXY, 1,2,i,ii,iiia awodnaoisndapdnaasndakjsndojasnbf

  • Keirsten

    This is a dud compared to the days when they used to cut or increase.

  • http://www.pacfreehotwater.com steveo77
  • annamall

    God isn't that the truth Alpha you nailed that one! 🙂 I got out with a few points then went short and will stay there. ES 903

  • C C Rider

    Someone needs to put the Defib on this, oscillators going crazy.

  • Iguanadon

    And the real direction is showing itself now? Down… see if it's for real.

  • thelefteyeguy

    i'll call it…time of death

    2:28

  • fuw

    TRIN going up and closing in on the 1-line. Are we really going down?

  • Count_de_Monee

    Glad I stayed out even though the drop would have been nice for my euro shorts.
    Making a hell of an effort to stay disciplined and preserve capital, which is a big improvement for me.

    No trades yet, still waiting for some direction.

  • amgrant

    Why do all these nimrods on TV think the economy has turned the corner???????????????? What planet do they live on??

  • faafa

    Anyone think we can stay above 901 VWAP on ES?

  • divergence

    Just take a looks at all this posturing and horseshit with all the computers and trading programs, and tell me this whole sumbitch will not crash one day.

  • thelefteyeguy

    btw…another great call…!

  • zenith191

    And the Dow leads the charge. Glad I stayed short with stop at 915.

  • springheel_jack

    Yes, this is going down.

  • http://alphahorn.blogspot.com/ alphahorn

    right now if i had to pick only ONE count, i'd go with iii of 1 of 3 of C

  • rhae

    All the CNBC nimrods really work for GE

  • itsgold

    things look a little negative atm.

  • springheel_jack

    USD rising fast. I'm short from SPX 905. Going shorter from SPX 897. I think we close down today & fall more tomorrow. Target 870 this week. .

  • http://www.mylifemytrade.com MyLifeMyTrade

    Look for market to drop off the cliff when 900 gets taken out on SPX

  • http://es seawolves

    alphahorn to 913 eod?

  • springheel_jack

    Testing now.

  • kinihepu

    If we can close this hour under 903, that will be significant that direction is down. No?

  • thunda72

    Still clutching my puts like Grim Death…

  • http://alphahorn.blogspot.com/ alphahorn

    remember your friend the RSI, when it crosses 50 on the 60 min chart, bad things happen, been my focus for the past hour

    http://www.screencast.com/users/alphahorn/folde

  • amgrant

    It's not just CNBC, it's every article and other news networks that bring these twits on. I feel like I'm living in a twilight zone sometimes.

  • http://www.mylifemytrade.com MyLifeMyTrade

    miners and metals would have been best shorts 1 hour ago – LOL

  • MaxPainMan

    long /ES

  • amgrant

    Honestly until we crack 880 then I don't think you can use the words 'significant' and 'direction' in the same sentence.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Done – game over IMO – visit to 875-880 is on the cards IMO.. anyways I am still staying tight on the stops…

  • DoubleNaughtSpy

    Mole I don't blame you one bit. I was sweating bullets. I didn't have a good plan. This time I got lucky.

    Thanks for sharing your trading ideas no matter the outcome.

    Now I'll share some love…

  • rhae

    SPY 15m sneaking down to my big Fat Support line 89.70

    still in dusty time

    Cramer lol

  • http://alphahorn.blogspot.com/ alphahorn
  • http://www.pacfreehotwater.com steveo77

    http://screencast.com/t/Xqxf5ptLcD

    tighten stops for bounce up

  • newbear

    Mole, thanks for your post. I was long and didn't like the odds either way. Glad I bailed.

  • springheel_jack

    You won't be saying that if we reach 950.

  • C C Rider

    My rule of thumb, is to never believe the first move is the legitimate one. I think they could very easily ramp this into the close to 925. A break below 898 means bail time!

  • ropey

    too my profits, will wait for next move…..very sweet, recovered my fuckup from friday lol.

  • MaxPainMan

    out. scalp done.

  • thelefteyeguy

    btw…rSI below 50 on the 60min…eod selloff?

  • MaxPainMan

    LOL!! yup, that was me. (but i successfully scalped 2.25 /ES points)

  • amgrant

    Even then in the grand scheme of things we still haven't gone anywhere. Name of the game is micromanaging positions and day trading.

  • http://alphahorn.blogspot.com/ alphahorn

    nice trade that took nads

  • molecool

    Yeah, I'm watching at this point – I don't trust this move just yet.

  • BigHouse(Aka Mr Vix)

    Not sure how this day is going to end…

  • amgrant

    I for the first time in god knows how long am completely 100% flat. 100% cash. I literally have no idea where we go next. No edge, no trade. Sticking to day trading until we get some kind of direction again.

  • ropey

    nods, that gap above is begging to be filled from monday, may take a few days/eom markups etc..all do-able. I'm writing call spreads any moves up – 93/95s and beyond, i dont think they'll push it over that for July….

    Also see a H&S forming on several indexes…right shoulder is starting to be built on s&p…whether it holds true or not remains to be seen…

  • ropey

    go grab a beer and celebrate 🙂

  • MaxPainMan

    hey man, if it feels right, then pull the trigger before you begin to over-think/analyze

  • amgrant

    Good idea.

  • http://alphahorn.blogspot.com/ alphahorn

    i'm keeping an eye on the 15 min SPX. it's looking a bit suspicious, if we don't get a violent move down soon this could be a head fake.

  • anthem

    ha, took my profits before or right after the announcement. Good thing with BIDU as its gone right back up. Only thing I'm still holding is very far out SPY puts and a whopping 10 contracts of Jul 145 on GS after selling out all the rest. . . .

    Think I'm staying mostly in cash until I can gauge a direction. . .

  • rhae

    I was kinda kidding about GE… but I think that 90% of mutual funds / intstitutional money, maybe more are chartered to be long only. So they have a vested interest to lie, cheat, sneek, steal and use any means possible to sway news bias… as bad as lobbyists in Washington, imo

  • PRSGuitars

    Not sure if you follow any of this craziness, but there's something like 500k outstanding Jul 40 QQQQ calls. Fuji pointed this out in one of her updates a few weeks back — just of issue if you're considering writing call spreads (indices or not…)

  • http://trading-to-win.com/ DavidDT

    weh…total non-event
    will we proudly call today “the day of inverse hammers otherwise known as thin penises”?

  • Keirsten

    Absolutely Am- these tight ranges and low volume make it nearly impossible to swing trade this pig at this point. This could be a long summer…

  • http://trading-to-win.com/ DavidDT

    got to go under 40 (only care about 40/60 marks)

  • MaxPainMan

    UH OH! Looks like we got it wrong:

    http://finance.yahoo.com/tech-ticker/article/26

  • http://trading-to-win.com/ DavidDT

    bear flags bear flags!

  • Keirsten

    GS softening up, took out a smallish short position.

  • ropey

    tempted….i had a small one ahead of fed, closed out around mid-142s……still wary of the end of month markups…how far do you think they can push it? Seems to have alot of support around this 137-140 level..

  • http://trading-to-win.com/ DavidDT

    is he as big of a Dick as Bove?

  • http://trading-to-win.com/ DavidDT

    you'll be sorry by the close – I always am 🙂

  • Keirsten

    I may just ride it til the gap fill from this morning and then take another look. The daily chart does not look bearish to me on GS right now, but I need to look at a longer time frame too.

  • http://alphahorn.blogspot.com/ alphahorn

    we could see 878 by the close if this gets a little momentum

  • http://www.mylifemytrade.com MyLifeMyTrade

    IMO the move down is real for now… till 880.. we are down 12 points on SPX since the announcment..

  • http://alphahorn.blogspot.com/ alphahorn

    now we're talking that's violent

  • ASDF123

    Here's an odd question. I'm not an options guy (not yet, anyways), but if I had $500-$1000 in lottery ticket money that I'd like to use to try and catch this huge wave down that Mole keeps talking about, what would be best long term SPY put to buy be?

  • rhae

    Ok SPY at Fat Support 89.70 ( thin zone), if it bounces I will take a little FAST..

    Dust Strom should be over…

  • kinihepu

    I'd be happy with a red close, but I think that's being a bit optimistic.

  • Eric_in_SFL

    I wonder who Bilderberg wants as the fed chairmen, looks like Uncle Bens out.

  • MaxPainMan

    long /ES @ 892.75

  • Keirsten

    Rumor is it'll be Larry Summers.

  • http://www.mylifemytrade.com MyLifeMyTrade

    The zero lite is flat as a pancake… If I didnt trust Mole's coding skills, I would say there was a bug in his code.. but there isn't

  • Eric_in_SFL

    SEP 86 PUT, but if I were you I wouldn't buy until at least 910.

  • http://www.mylifemytrade.com MyLifeMyTrade

    New post-fed lows being made here.

  • Iguanadon

    An optimistic pessimist. I like it. LOL

    Looks like your wish could come true. Flirting with the break even line now. Dow in horrible shape.

  • http://www.mylifemytrade.com MyLifeMyTrade

    ICE – still some meat left on them bones to gnaw.. Just sitting aside with my hedged positions and waiting.. Sometimes it is fun to just watch

  • wex

    Why do you say that?

  • dollar

    Diamonds (DIA) cracked first, still leading, below yesterday's low

  • string01

    Are we gitin another 'heckuva job Brownie” moment ?

  • MaxPainMan

    out @ 894.5 for a scalp

  • LostIllini

    Does anyone know what time they turn the buy programs on at?

  • MayDaze

    “Meet the new boss, same as the old boss.”

  • Keirsten

    Isn't that the truth!

  • 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„¸

  • amgrant

    I'm in same trade, but hanging on.

  • MaxPainMan

    good luck. we might actually go higher and test the VWAP on the /ES. if you are planning a scalp, then I would definitely sell at the VWAP

  • C C Rider

    PPT alert. Are you ready bears? I gave up doing acid a day too soon! LOL!! Double top on the VIX and lower highs on the dollar. Reflation baby!!

  • amgrant

    Eh, I'm out just under 896

  • MaxPainMan

    yeah, looks weak…

  • thunda72

    3:41 p.m.

  • dullmind

    Hi, the Sep 19 85 put has an open interest over 127934, whereas the the Sep 19 86 put open interest is
    only 9323. Any reason to favor the 86 over the 85? Buy where the crowd is not, maybe?

  • Eric_in_SFL

    86 has a higher delta so in turn will make more if the move is shorter and following the herd is not always the best thing to do.

  • dullmind

    Thanks for the reply Eric, that's the kind of info I need to learn so buying options will someday
    work for me.

  • ASDF123

    I'm a little late to the game here, but thanks for your advice.

  • ASDF123

    I'm a little late to the game here, but thanks for your advice.
    Looks like 910 will be here soon enough.