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Burning The Shorts
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Burning The Shorts

by The MoleApril 21, 2016

We are seeing quite a bit of activity this morning with Draghi attempting to jawbone the EUR lower albeit with limited success as the EUR/USD seems to be ready to deploy its second stage rocket boosters. If nothing else he’s giving Yellen a brilliant run for her money when it comes to insinuating more dovish monetary policies despite having run out of ammunition and now attempting to face forex vigilantes armed with a BB gun. There will be blood, mark my words.

2016-04-21_EURUSD

Here’s a view on the EUR/USD featuring the finger of God on the hourly panel. The daily on the right looks like it’s ready to start trending soon. In that scenario we could easily see us touching 1.15 or higher by the end of the month. I better head to the ATM today as it doesn’t look like Draghi has any real firepower left and has now resorted to performing a monthly ceremonial rain dance to keep those deflationary demons at bay.

2016-04-21_silver

Meanwhile we continue to see big moves in the futures as well. After major gains in the grains (that would have been a perfect title yesterday) precious metals are now following suit. Silver just blasted not just through daily or weekly resistance but managed to eviscerate the 25-month SMA and is now trading far above a monthly NLBL. Bullish! With a bit of luck we’ll see a retrace here so that we can take advantage of a last-kiss-goodbye long entry opportunity.

2016-04-21_gold

Similar story over in the gold futures – the gold bugs seem to be hellbent on finally breaking out of that sideways churn zone from hell they’ve endured since mid February. Intermediate target would be 1350 here.

2016-04-21_crude

Crude also looks like it may be ready to rock & roll. The daily panel (left) is showing us price touching the 100-day SMA and when that happens you quite often see either an immediate retrace or a little dip followed by a celebratory burning of the shorts. I am not going to chase this one but if we get that dip lower and things slow down, I’ll be sure to look for an entry signal.


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.
  • Billabong

    Good Morning! … As mentioned above, my system also gave me a buy signal on GC this morning.

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

    Buying op?

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

    I’m not going to say.
    it looks like a high pole reversal on the 4hr /GC chart.

    EDIT: silver maybe wants to close that daily gap?

  • Yoda

    my set-up for today

  • Yoda

    Depends what $ does.The ramp at the open looks dramatic though.

  • ridingwaves

    what a conundrum Draghi has on his hand, I agree that would have been a good title yesterday…
    FX vigilantes have shown more balls then our reputed bond vigilantes

  • Yoda

    There is no fear in this market.

  • Jay Thomas

    Draghi needs new fu. I recommend drunken monkey style so that he may strike with strength from off-balance positions. But he is Italian. He will stick with ching-pow style even though he is out of bullets.

  • ridingwaves

    going to try and scale into POT, buy orders at 18 and 18.20…see what 4/20 does to ya….

  • Yoda

    yeah you’ll end smoking fertiliser 😉

  • Yoda

    No fuqs given at NEM with today’s gold slam down
    http://stockcharts.com/h-sc/ui?s=NEM&p=D&b=6&g=0&id=p40452892758

  • mugabe

    depends on the sector .. utiltities and staples have been taking it on the chin last few days

  • Mulv

    sector rotation into more recent momentum… i think similar things afoot with with long end of treasury curve and stocks. stop outs with sp futures breaking to new highs.

  • Yoda

    Judging by the zero, it does not seem anybody, but HFT bots (and slopers of course) , are interested by the short side

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

    get past FB and GOOG earnings and maybe fear will creep in…

  • Billabong

    It should tell you something. Miners across the board have been climbing. There is a real systemic problem and no one knows where to put the single finger on it …. because the variables are now coalescing into a monster. RWG is right and wrong …. too early, signals aren’t there yet.

  • Yoda

    Some good shit that is. :-}

  • mugabe

    that’s exactly right. unfortunately, I’ve been on the wrong side of it in my mainly equities-based account 🙂
    this actually shows the benefit of having one mean reversion account to complement a momentum one, but haven’t got a mean reversion system in place.

  • ridingwaves

    http://www.sfgate.com/news/article/Stoners-light-up-in-SF-s-Golden-Gate-Park-for-7264645.php

    pot smokers of today are boring, I heard no intellectual discussion as I walked around the outsides of the crowd…check the pics out and you’ll get the drift..

  • Mulv

    i liquidated most of my account (including long yen, treasuries, xlp) a couple days ago. i’m not good enough to play with the big boys, so just easier to take it off when it stops working and and “await further instructions”, as Mole says. better lucky than good (and still long some xlu that’s about to get stopped out).

  • mugabe

    interesting. i’m currently long xlp, xlu, xlk and tlt – one OK, three recent dogs. it’s a momentum system that’s reveiwed every two weeks with no stops … this weekend is the next review. composition might change but it’s a fairly long term system. we shall see.
    re not working, I have to be reconciled to the fact that there will be months and possibly years when it doesn’t work.

  • Mulv

    for my research in the future… look for “significant” sector rotation / correlation changes and market inflection points. and try to keep an open mind for which is the dependent and the independent variable.

  • Mark Shinnick

    Yeah…no longer a mere means or adjunct to a end…but the end itself.

  • mugabe

    that is an interesting topic to research.

  • ridingwaves

    L rlyp at 20.30..running since buy, stop 20.10

  • Round we go

    all in short lotto ticket account. got put your dick out sometime.

  • Mark Shinnick

    Yeah…into and behind the blind wall undermining the entire free market system.

  • Time Bandit

    Back in the late 80’s and shortly after I quit all “mind altering substances”, I went on a ski trip with some friends who still smoked pot. After a full day of skiing we all settled down in front of a buring fire. There were 3 other couples along with my wife and I. They fired up a couple of joints while I abstained . While listening to the conversations with a clear mind, I was amused to find out that as each person was talking to one another, everyone was actually talking about totally different things. These conversations were totally disjointed while at the same time agreeing and laughing at each others comments. I think the intellectual discussions that went on were primarily internal.

    Not that there’s anything wrong with that. 🙂

  • AcoBrasil

    Good spot to short. If this is a medium-term topping process we may have a few more stabs to the upside over the next week or so. I think we test 2075 SPX tomorrow.

  • topedge

    SUNE has filed bk. That’s going to leave a mark 🙂 $20b in assets, $16b in debts

  • Yoda

    Usually discussions end up on who to call for munchies delivery 😛

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

    What? … no pic with your post?

  • http://evilspeculator.com Sir Mole III

    I don’t have a high resolution magnifying loupe anyway.

  • Ronebadger

    Pic 4 U

  • http://evilspeculator.com Sir Mole III

    I never got the whole drug thing – never touched anything in my life – we’re talking not a single drag, not even a cigarette. Have been devoting decades of my life to establish as much clarity as possible.

    Oh – one exception that is – I’ve been trying modafinil and it works well for me. But again it’s not exactly considered a recreational drug, more of a smart pill. Of course it’s hard to draw a line when it comes to mind altering substances.

    Anyway, my point being that trying to get ‘fucked up’ was never anything I felt attracted to. Even after two drinks something inside of me tells me to stop.

  • http://evilspeculator.com Sir Mole III

    Of course not – the Fed/ECB put remains in place until the end of the decade. Everything else is just b.s. to draw the bears into losing positions. After all – in order for anyone to bank coin on the long side someone has to sell, right?

    Don’t hate the player – hate the game.

  • http://evilspeculator.com Sir Mole III

    That’s why we don’t chase.

  • Round we go

    you only need one sperm to make it.

  • mugabe

    smoked regularly in the evening in the past, when with people. wouldn’t have missed it for the world! fine, as long as you don’t need to get anything done!

  • mugabe

    ghostbusters?

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

    it’s a very fine distniction, music is mind altering …

  • ridingwaves

    Some pot smokers are pretty good traders…classic goodbye letter by andrew lahde…

    http://www.theguardian.com/business/2008/oct/18/banking-useconomy

    drugs act on people the same way as alcohol, if you have an addictive personality it would not serve you well vs one without that personality whom it might help with medical issues etc.

    I think acid and psychedelic drugs are now being looked at seriously to treat addictions, dementia, Alzeimers etc….more effective at reaching the part of the brain regular drugs cannot.

  • http://evilspeculator.com Sir Mole III

    Nice to see this divergence play out into today’s session.

    .

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

    holy crap.
    fish in a barrel.
    I should start trading SPY options.
    😉

  • mugabe

    in my experience, and that of many others, tobacco is much mre addictive than pot

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

    [May 208 Puts] – 5min

  • http://evilspeculator.com Sir Mole III

    Aren’t you looking at the damn thing? What the…

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

    my day job remember? I have meetings, and stuff.

  • http://evilspeculator.com Sir Mole III

    One session at a time mate – one session at a time.

  • ridingwaves

    I agree and is full of carcinogens…vs. pot…heck, even the govt. admits pot actually shrinks tumor cells and inhibits them from growing in lab experiments…

    last comment on that subject….back to market

  • ridingwaves

    Prince RIP

  • Time Bandit

    I’ve been sober for the past 29 Years and went to AA Meetings for my first 11. It took me 9 years after I quit drinking to finally stop smoking cigarettes completely. I tried everything including hypnosis, patch, nicorette and various other programs to quit smoking. Smoking was my most difficult addiction to overcome.

    The only addiction I have left is coffee and I ain’t giving that up under any circumstances! 🙂

  • Tomcat

    What a loss

  • ridingwaves

    definitely, a gifted musician and damn good guitar player…

  • Time Bandit

    “Damned if you do and damed if you don’t”. Soybean Oil opened with a big gap down at the 9:30AM open so I didn’t chase it. After going down 40 Ticks during the first 30 minutes, it proceded to continue down another 30 ticks after that. This is one of those where chasing it would have worked out but I still think it doesn’t make it right to chase big candles. OTOH, Corn took a very large dump at the 9:30 Open but came back almost half way during the first 30 Minutes so I managed to get a short in there and that’s in the money right now. We’ll see if there is any continuation down at the 8PM open tonight. Corn has been on a rip roaring tear as of late so it could also turn right around and head back up.

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

    Most go at 56.
    it’s a running dark joke between me and an old friend.

  • Crofx

    Can you elaborate on modafinil??? Been toying with should I, shouldn’t I, need some more go hours in the day and some clarity…….coffee has no effect anymore

  • Crofx

    Also, can’t just buy it over the counter in Australia so would need to go to some dodgy Internet site internationally to get some

  • Time Bandit

    You are very fortunate to have an aversion to alcohol and other recreational drugs. Some people are more susceptible to certain types of addictions while others are not.

    In any event, to not being subjected to the vicious toll that drug and alcohol abuse can take on people and their families is a blessing indeed.

  • mugabe

    historical correlation of crude vs spx = all over the place

  • Mark Shinnick

    Looks now like dammed pneumonia…then the heart…will ultimately get many of us.

  • ridingwaves

    well Goog or alphabet is not good soup for the spx soul tonight

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

    GOOG, ouch.

  • Round we go

    decided to lever up 1/2 my longterm short hedge account. so will proceed to convert QID to 3x short qqq

    nq has gone no where in the last month. and intel, google and microsoft is downsizing big.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    So Prince is dead, have you guys heard? I never really liked his music that much to be honest but it’s sad to see him kick it at 57. All the heroes of our youth are dropping like flies these days it seems. Think about it – who’s left?? Maybe that’s how it is when you get old?

  • mugabe

    when you get old it’s about how acquaintances are dying … nice thought 🙂

  • Time Bandit

    Had my 50th High School Reunion back in 2013. I was amazed by how many were gone already. Kind of makes people get in touch with their own mortality.

  • CandleStickEmUpper

    oh I’ve heard alright. It’s been on non-stop coverage on CNN for the last 4 hours. Trump is probably pissed that Prince passed, because the CNN coverage spotlight is off him and on Prince.

  • mugabe

    flesh wound

  • Mark Shinnick

    What amazes me is most of the typical losses are really so preventable.

  • mugabe

    bit like trading 🙂

  • Mark Shinnick

    Excellent parallel.

  • http://greenlander1.blogspot.com/ Greenlander

    Buying QQQ here

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

    Exercise and sufficient sleep will do wonders. Turn off the TV if you watch it, and do something to get your heart rate up. You won’t have any more hours in the day, but the hours you do have will be more productive.

    I never exercised because I didn’t have the time, blah, blah… I made the decision this winter to do a lot of downhill skiing, as I really enjoy it and there’s a small ski hill down the road from me. Since I can’t ski now, I’m walking as many days as I can, about 2 miles at a fast pace.

    Plenty of research shows that exercise will help the brain, help your body, help you sleep better, help you have better sex, etc. Our bodies evolved to move, and we don’t do nearly enough of it in modern life.

    I credit Evil Speculator for helping to change my mind on this. Thanks Mole, et al.

  • captainboom

    Prince for President…

  • JackSparow

    ZC

  • randomuser6789

    When you consider that you can’t take your ill-gotten gain with you when you die, it makes you consider how you use it – an your time – before then.
    John D. Rockefeller’s accountant was asked, “How much money did Mr. Rockefeller leave behind when he died?”
    He replied, “All of it.”

  • Round we go

    i was anti-prince, cus i viewed him as cheese wiz that everybody thinks is great. But he did say one thing that changed my music playing in a significant way. ” it does not matter what notes you hit, long as you hit it at the right time” . When I stopped worrying about the right note and not judge the wrong notes, my playing just smoothed out. Then I also started letting hitting the right notes go to. so my play got lot looser at first but the soul was strengthened.

  • Billabong

    “How much money did Mr. Rockefeller leave behind when he died?”
    He replied, “All of it.” … LOL. My oldster friends are in two camps, one pumped by WS (fear … you won’t have enough) and the other want to spend it all because of currency devaluation and health issues over time.

  • Round we go

    consider this, you made no effort to be born or be here. why do you think anything is needed, when it is already here. why try to keep something that is not needed.

  • Billabong

    With DX bouncing underneath the 25 EMA, My system is giving me mixed signals; YM/ES have sell signals this morning on the daily with the prices opening up (This is only YM’s second sell signal in three months and the other one was 12 days ago). Also BPI saw a slight slippage with the transports dropping below 80%. Which is understandable with the rising price of oil.

  • Billabong

    DX HOD … And climbing.

  • http://evilspeculator.com Sir Mole III
  • http://evilspeculator.com Sir Mole III

    LOL

  • Yoda

    I share you views as well. Very much mixed signals. Last two days moves in DX are bullish. Technically, we have retested April 12th’s low, but without breaching it. This in itself can be viewed as very bullish, and could lead to a strong move up. Much depends on what DX does now after the touch of the 25 EMA.
    Surprisingly, miners are not, for the time being, very much affected by the recent show of strength in the dollar. Hence the mixed feelings. However that may change quickly.
    When I am in such predicament, my preferred approach is to take some profit off the table (in this case in PM miners), while waiting for the direction to become clearer. Today being Friday, I’d rather prefer to be in a position to wish being in a trade then out of one coming Monday.

  • SirDagonet

    “I recently interviewed Jonathan Reilly, a biochemical engineer and longstanding user of Modafinil, about his experiences with it. He eloquently explained what it did for him, and I’ve done my best to record it here.

    Jonathan is a very successful biochemical and biomedical engineer in LA who works on med devices and does project management. He used modafinil for years but switched to a newer analogue of it called Nuvigil. As he explains, “I un-f*ck things for a living. On Nuvigil, I can see connections in a system even when I don’t know the process I am troubleshooting.” He says it helps with systems thinking, one time letting him double the capacity of a manufacturing line in one week, even though he didn’t know much about what was being manufactured.”