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Boxed In
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Boxed In

by The MoleJuly 28, 2016

As much as I hate FOMC days, I had somewhat hoped that Yellen would produce sufficient volatility to whack us out of the box in which we’ve been bouncing around in the past week. No such luck apparently, and when the market hands us a box of lemons, we’ll use it to make lemonade 

2016-07-28_spoos_box

That short term panel is looking like a Northridge richter scale in 1994. I actually lived in Beverly Hills that ominous day and remember it well. I was woken up right away as the shaking began and quickly ran downstairs to figure out what was going on. When I opened the front door of the little guest house I had rented I saw the pool in front of me wildly sloshing back and forth like the Atlantic ocean during hurricane season. I noticed that our palm trees were swinging strongly with debris flying all over the place, and then the neighbor’s house lost part of an old supporting wall which had still been made of bricks. Suffice to say it’s not an experience I ever care to repeat. But we were really the lucky ones. Unlike some parts of Los Angeles, which had to wait weeks (and sometimes months) to regain electricity and phone service BH had all services restored the very next day. So the moral of the story is – if you have to face a natural disaster, do it in style.

Well, as you probably know I’m still long from last week with my stop below 2142. But a small ST long position here (with 1/3R only) may just produce a bit of extra profits. However, be alert – something’s changing on the volatility profile:

2016-07-28_spoos_RV

At first glance the current dip lower looks like all the others but what I noticed is that the previous dips on this 60-min chart happened during HIGH volatility periods, and then reversed during depleting realized volatility (RV). Right now we’ve got the inverse happening – the drop lower has been happening during the low cycle and it’s now popping higher.

This may mean that more volatility will continue to bring us lower, and IF that happens I would pull my current long positions and reverse sides after about ES 2154.

2016-07-28_silver_update

Quick update on our silver campaign, which we couldn’t have possibly been timing any better. I quipped in yesterday’s comment stream that I most definitely earned my keep for this week, wouldn’t you agree? Anyway, it’s more than fair to start trailing after over 2R in profits, but I would humbly propose that you keep some of it in the running. The long term view is looking extremely delicious here and it’s quite possible that this was the proverbial ‘last kiss goodbye’ before a massive pop higher.

2016-07-28_AUDCHF

Plenty of juicy setups today. Here’s AUD/CHF which you may want to grab as a long near 0.739 – stop should be at least two bagel throws away below 0.7365. If it resolves higher it’ll be a beauty to behold.

More goodies below the fold – please join me in the lair:

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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.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Boxed in isn’t too bad.
    discipline is key, avoid crucifixion.

    http://www.icanbecreative.com/res/2012/danbo/crucified-danbo.jpg

  • ridingwaves

    did the widow maker spring to life or what….

  • pepe

    like watching paint dry…

  • Mark Shinnick

    The broadening top crowd may still have a case.

  • Tomcat

    Any of you gents have experience using trailing orders with stops on an instrument such as ES? If yes, what is your typical trail (amount or %) given its volatility (or lack thereof) profile?

  • Mark Shinnick

    Yes, regardless of the instrument you will need to maybe frequently adjust your stops to reflect whatever you calculate the likely volatility to be.

  • ridingwaves

    watching crude for signs of life around here…
    $WTIC 40.50-41.00 area provides some support

  • http://evilspeculator.com Sir Mole III

    Wow – it’s slow here today!! Slow periods are for sharing charts and system ideas, folks!!

  • http://evilspeculator.com Sir Mole III

    Sacrilege!!

  • http://evilspeculator.com Sir Mole III

    I guess this is how everyone feels after a week of this s..t.

  • Mark Shinnick

    Low Participation

  • http://evilspeculator.com Sir Mole III

    Hands in pants.

  • ridingwaves

    NG is flying….think it might now make a better run to drive up and above 3…

  • Mark Shinnick

    Some event is needed to feed the Sheeple media the actual reason for whatever is the next market move. BTW…still short since yesterday …for the time being.

  • Tomcat

    Thank you Mark.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    it’s the simple pleasures
    (GG ducks)

  • Mark Shinnick

    Well…I had to use my hands to step aside from the shorts…for the time being.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I think you have an Abyss addiction.
    😉
    [TVIX]
    http://stockcharts.com/h-sc/ui?s=TVIX&p=D&yr=0&mn=6&dy=0&id=p74585407489

  • Mark Shinnick

    Yeah…no doubt colored by the “this can’t end well” prognostication of the QEnfinity way of life.

  • BKXtoZERO

    Nice Mole! Thanks for that post with that volatility tidbit. Interesting.

  • BKXtoZERO

    Figured Bill’s speech would be good for DOW20,000. He should have whispered “AMAZON” at the end.

  • Billabong

    I expected a flat/down day for miners after yesterday’s move. Down they went for the morning session and were bid up this afternoon. BTD…. (LOL)

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Billabong

    Anyone just see the USD/JPY dropped $2 in an instant and reverse a few minutes ago?

  • Ladywandering

    yes just checked wow

  • Billabong

    As of tonight, CL has dropped 18% in the last month … 33% for UCO. Too much chatter about how low it’s going … probably close to finding your support point.

  • Billabong

    Flying isn’t the word for it … Over 8%. BOIL was up 14.44%. Is this on today’s “news” about NG being shipped from US to Asia?

  • Yoda

    Leak?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • ridingwaves

    Japan throws some more money into debt party while keeping those negative rates high

    gold and silver set to shine again

  • ridingwaves

    bought UXVY….way over abused

  • randomuser6789

    Already in and out of SPU for 2R.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Naz sentiment. almost there…

  • mugabe

    amazing move in the yen today .. it’s been incredibly volatile recently

  • Billabong

    Miners on the move again … RBT BTD!

  • Billabong

    USD turn to weaken in the currency wars….

  • Billabong

    Its been one hell of a run over the last month…

  • mugabe

    it’s certainly possible .. on a medium-long term perspective, a lot of currencies look like they’re bottoming / have bottomed .
    if trump wins, the effect would be ‘interesting’

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Heck, last 14 days.
    https://disqus.com/home/discussion/evilspeculator/do_nothing/#comment-2784954584

    yep. Couldn’t have done it without EvilSpec!
    “Next thousand swamp rats”

  • Billabong

    Although, currency wars won’t end until there’s a system collapse (or China comes out with a gold backed Yuan) because of the nature of money velocity. Every nation state is in the same boat, they need a cheaper currency to keep things moving. The only reason gold looks like it’s going up is because of the currency depreciation. The US has been insulated on gold’s price change relative to many other countries…

  • Billabong

    LOL … Very true.

  • Mark Shinnick

    Abuse cases can fuck u up 🙂

  • ridingwaves

    $WTIC is getting some support here as mentioned yesterday
    UCO just turned green

  • Billabong

    CL held @ 40.57 this morning and then turned back up … possible green today? It would be the second time in 10 trading days … I wonder how many people held on from $50 to $41.50? 17% correction….

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    given the June high, it’s a good sign.
    can’t guarantee a full reverse.

    http://stockcharts.com/h-sc/ui?s=USO&p=D&yr=0&mn=6&dy=0&id=p79944425359

  • ridingwaves

    no doubt….thinking we get some volatility next week

  • mugabe

    Hmm … I wouldn’t say the USD has been insulated. gold’s up about 28% this year vs USD. but your point stands that gold has been on a tear vs all major currencies this year and all the charts look quite similar (ie strong uptrend) … except vs the yen, where gold’s in a range.

  • ridingwaves

    not too many…
    looking at SGY to play some momo if it crude starts to run

  • Billabong

    It may end up with a wide trading range channel 42-50 for awhile.

  • Mark Shinnick

    Me too.

  • Billabong

    Good point on the Yen.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    full disclosure, I picked up a long term CVX position yesterday.

  • mugabe

    also in a range vs equities and long bond … the wonders of intermarket relationships

  • ridingwaves

    $ getting throttled..

  • Persons Name

    Wheat futures are intriguing. Entering a good seasonal time period.

  • ridingwaves

    yes and the dollar will play a big part of where it goes now….

  • http://evilspeculator.com Sir Mole III

    Yes, a lot of the softs are looking interesting.

  • http://evilspeculator.com Sir Mole III

    Very good … push… push!!

  • ridingwaves

    Headline-NetSuite upgraded to neutral from sell at Goldman Sachs
    Ummm GS, they were sold yesterday when you had your sell rating on….
    if these guys weren’t MM’s they would be just like us…..

  • Mark Shinnick

    Sometimes…its just been too much fucking and needs a rest.

  • http://evilspeculator.com Sir Mole III

    Just take me out of misery… let’s call it a week.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I’m calling it a month.

  • ridingwaves

    must be hot over there to be so miserable, your gray mare pick paid well, it would seem to push you into a nice mood with a sangria on a warm evening in town at a small cafe with the boss..

  • ridingwaves

    stretching vix instruments to the extreme on eom
    this is setting up for a move….

    how extreme
    the same vix print today and even a bit lower interday on 7/20, today UVXY at 25.30 pps 7/20 at 29+pps

  • Billabong

    USD/JPY … LOD. Down 3+ … carry or massacre trade. GC HOD.

  • ridingwaves

    Hot August Nights….
    Kudos on trade..in honor of your classroom environment
    https://www.youtube.com/watch?v=6M4_Ommfvv0

  • BKXtoZERO

    It’s a slow motion ramp and camp. More fun watching paint dry. Actually, I am! working on the house today on my off Friday.

  • Mark Shinnick

    Yeah….always so fascinating, and encouraging, to see that sort of setup phenomena….as though the realistic perception of risk goes into steep denial or shutdown…or something.

  • Billabong

    Have a nice weekend…

  • mugabe

    looks like XLE might have put in an emphatic low.

  • ridingwaves

    funny how dollar cycle up started 2 years ago August…will cycle down begin now…if so XLE will feel the love….daily brent:usd musings on direction…I think if candles stays above .40 on right side, it would still play out similar…I like that if the PMO turns up from here it will be making the turn at closest to 0 on scale in last 2 years, RSI did turn N a little to boot
    https://s32.postimg.org/ma2f0modh/brent_and_dollar_cycle.jpg

  • mugabe

    yes, potential head and shoulders bottom there … but needs to get a move on now

  • Billabong

    We forgot to add the impact of NIRP…

  • Billabong

    The questions are always the same; what is the trend and what is your RBT telling you?

  • randomuser6789

    In and out of TOPS for 1.5R.
    I may be leaving a lot on the table, but for now, I am having fun scalping momo stocks.

  • http://evilspeculator.com Sir Mole III