Gimme All Your Lovin’

So out of the blue some rumor hit at about 12:30pm Eastern suggesting that the ECB was about to prepare a broad based QE package for the January meeting. Which instantly resulted in this over in equities:

Oh sorry – my mistake – here we go:


Nice little schwing - someone must have been really happy to see good ole’ Draghi. Not sure why exactly the EUR/USD also popped higher on QE rumors but I have long given up on trying to make sense of it all.

Now given all that I would like nothing more than to kick this thing into overdrive and collect a mountain of ill-gotten gains all the way into X-Mas and beyond. However, we can’t afford to get caught up in all the excitement as there are signs of trouble on the horizon. Please step into my lair:

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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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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!

Please login or subscribe here to see the remainder of this post.


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