Happy Turkey Slaughter!

I take it by now most of you guys are already heading to to your respective Thanksgiving destinations. Fortunately the Mole will be spared this particular holiday extravaganza as it’s not celebrated over here in Europe (don’t worry, we have a ton of our own). Honestly I never really cared much for Thanksgiving during my time in the States. Obviously it’s the second biggest U.S. holiday season after Christmas and people tend to plan their time off around both, courtesy of stingy employers offering only minimal vacation time.

I remember the very first time I signed an employment contract after I had just received my green card. I couldn’t fathom that I only got 14 days off per year. And that was during the dotcom bubble - I was told that it was rather generous compared with some folks working in blue collar professions. Not that I really take long vacations European style but when I’d like to have them when I need them. Of course once I started to trade for a living it afforded me to travel outside of popular holiday periods. So I tend to take time off in fall or in spring instead of the summer vacation season or in December. I’ve always been a person who loves to go against the grain, which makes me a horrible employee, but I always enjoyed working on my own terms. Which apparently seems to be the way of the future. Less security but if you’re flexible and enjoy controlling your own life then the sky is the limit.


Anyway, although I live in Europe my vacation and holiday schedule is still very much tied to the States, courtesy of my responsibilities to my readers and of course my intrepid subscribers. So virtually I’m still living my life over there which is kind of interesting. Much of my day revolves around my work, which includes trading, blogging, conversing in English, all based on roughly an Eastern time zone. However when I set foot outside I’m suddenly in Spain and I have to completely switch my brain over, in terms of language of course but also culturally. This can actually be quite difficult at times but given the cultural chameleon I have become over the years I’m quite used to it now.


Alright – let’s talk markets for a moment. As you can see participation has now come to a standstill and we all have better things to do then to watch pre-holiday tape.


What is interesting however – or will become so next week – is that the VIX is now dropping below 12 again. That doesn’t mean we’re going to see a jump higher but if you look at the Bollinger (in red) it’s clear that we’re starting to compress quite a bit. This situation may go on for a while – perhaps all through the holidays and into the EOY. However, sooner or later there is always a price to be paid and we are going to run out of buyers at some point. I won’t hazard to guess when that happens but we are clearly late in the current advance. I know that I suggested the possibility of a correction weeks ago – but at the same time I also held my long positions, knowing that calling tops during rocket periods would be rather unwise.


I’m not seeing any signs of trouble on the VXV:VIX ratio but the VIX:VXO is starting to drop a bit and we’re now developing quite a divergence. It could be pricing irregularities due to the holidays so we’ll have to revisit this situation on Monday or Tuesday. But if it persists then we need start paying attention. For now however there is little cause for concern.

Alright, this will be my last post for this week and I’ll resume my usual schedule on Monday. The Zero is going to be running on Friday but I won’t be here posting. Thor and CrazyIvan will continue as usual of course as futures and forex exchanges do not observe Thanksgiving.  However until Sunday night I won’t be sending any new Thor setups – CrazyIvan however may take entries. If anything is unclear or you have problems feel free to email me but please allow 24 hours as I won’t be checking emails around the clock.

Please travel safely now! My revenue milestones don’t permit reader attrition due to traffic accidents ;-)

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Sitting On The Edge

Equities are at an inflection point – yes, we are pushing into new territory but due to a shallow correction yesterday we may not be ready to start another squeeze. I’m still holding the long positions I grabbed this morning and my stop remains at 2008.5 which means I was one tick away from being touched.


The E-Mini volume profile chart shows us what we’re up against – we are heading into uncharted territory and I think a more thorough correction is needed to kick this thing higher into the Santa season. Either way, I’m still holding my longs I grabbed at 1872. My current stop is at the 2nd nearest spike low at 1960. I am considering to shed 20% if we drop through the previous one at 1995.


The hourly SPX panel shows us a very solid 25-hour SMA which however is starting to lose momentum. So the situation here is pretty clear. The bulls need to start running or face a more thorough correction, perhaps all teh way toward 1962 where we find the 100-hour SMA (see, there IS method to my madness).


The VIX is slightly elevated as you can see from the ratio I’m plotting below the SPX here. So I think market makers are expecting a correction here as well. Strangely thus far nothing has yet materialized.


Update on the GBP/JPY setup from last night – see what I meant by not having a directional bias? Who looked at that chart yesterday and would have considered a LONG entry? Perhaps 1% of all traders – that’s how many. Well we did and my recommendation is to move your stop to b/e – you are now sitting pretty. I can’t promise that this squeeze will continue but the die has been cast and now we wait. By the way GBP/USD worked fantastically for a few hours but then somehow ran back to our entry – I recommend an exit on that one.


AUD/CAD – I was whipsawed there this morning but got above 0.9905 – taking profits now which earned me a bit over 1R considering the 1/2R I lost being long first.


Crude – perfect entry here this morning and we are now uniquely positioned for continuation higher. Again, no guarantees but move your stop to break/even and then sacrifice a medium rare beef burger to appease our overlords at the firm whose name must not be spoken.

Only one measly setup this evening and I’m keeping it for my intrepid subs:

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Hurdles Ahead

We have come a long way in the past three sessions but the easy part of the journey is now nearing its end. For there are hurdles looming ahead plus I’m seeing some signature signs of short term shenanigans flashing all over the place. Let’s start with where we are right now:


Quite a climb since that is and there’s probably room for a few more handles. But bear in mind that we are now facing a trifecta of previously tested moving averages – at least per my lens and more often than not they have been observed.


On the NQ things are looking quite a bit more bullish – AAPL definitely had a thing or two to do with that. However daily resistance is right ahead and we’re about to smack into it. On the weekly panel we’re however above the 25-week SMA, so that’s pretty positive.


Today’s session looks like it’s been on cruise control – the Zero also suggests that the bots are driving this one higher.


Quarterly volatility has eased off quite a bit along with the VIX and the ratio has been leading the advance in the past few sessions. All good and given that we’ve got more than a week of trading ahead of us it’s not impossible that the bulls may actually pull this off and close the month above the NLSL.

So much for the good news – now let’s talk about some of the concerns:

More charts and 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 subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

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    1. Happy Turkey Slaughter!
    2. One Chart Says It All
    3. Monday Snooze
    4. Monday Morning Briefing
    5. The Slow Walk-Down
    6. It Keeps Going And Going And….
    7. The Bots Are Back!
    8. An Impending Trend Shift?
    9. Fade The Noise – Play The Game
    10. Tuesday Morning Briefing