Last Chance For The Bears

Exciting times lay ahead ladies and leeches! Equity futures have now progressed to our final inflection point near the 2k mark, it is right here where the grizzly bear may hand the torch back to the raging bull from hell. As in all things timing will be of essence and being proven right tomorrow doesn’t mean much if didn’t get positioned today. As of right now there’s little movement in the futures but DarthMole suggests that volatility is just about to explode on the S&P E-Mini. So what the heck are we waiting for?


Well, it never hurts to consider the long term picture as well. Which I may add is what got me pretty jazzed up this morning. As you can see both the weekly and monthly panels have us pushing into Net-Line resistance right now – we have a daily NLBL at 2011.75 and there’s a monthly NLSL at 2013.5. That, my dear market maniacs, will be the final chance for the bears to inflict some major damage and run the tape all the way into the new year.


Quite frankly I have grave doubts that they’ll muster the mojo. See above the Thursday and Friday sessions courtesy of the Zero indicator. Very little bearish evidence here – the bulls ran this thing higher per the book. But – that said, when presented with an inflection point of such magnificent proportions I consider it my patriotic duty as passport carrying flag waving pistol touting Ketchup squirting red meat chomping cheesy t-shirt wearing paranoid American citizen to speculate the living heck out of it and then brag about it later to everyone willing to listen.


So let’s see what we got on the menu today. The daily and hourly panels are a bit in limbo now which is what most everyone is usually looking at. Good – more hapless victims for the taking. Thus my devious plan for today is as follows:

  1. I am short right here with a 1R futures position. In addition I’m grabbing some OTM lottery ticket puts on the spiders given that the VIX is back at 18.5.
  2. All bearish allusions pretty much hit the wall around 2013. My stop is a bit above that but if hit I may consider re-entry if I see sudden weakness. So watching the Zero for divergences will be essential. <shameless plug>If you’re not a sub just yet then I strongly recommend you spring a few bucks and join the club.</shameless plug>
  3. Long positions are a go above 2013 if I see bullish momentum on the Zero.

More goodies below for my intrepid subs:

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What Does It Take?

The greatest games have always been dominated by the masters of obfuscation, misdirection, misinformation, if not outright deceit. Of course the financial game is no exception and the price of admission to be paid every single day differs depending on personality, cunning, intelligence, fortitude, discipline, greed, market type, market cycle, liquidity, etc. Although we are all trading the very same market, the hurdles we encounter in our respective journey are a product of exogenic and endogenous factors.

Long term participation and success therefore has always been limited to a very select minority. To quote Jesse Livermore: The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor. 


Most of us would list intelligence for instance as a cardinal predicate to becoming a successful trader. But like with many things in life the real picture is a bit more complicated. Because if it was just a matter of intelligence then why don’t we see more billionaire mathematicians or scientists? Many of them die poor and are often considered social outcasts. As I mentioned above, we all must face our own personal hurdles and challenges. Very gifted people don’t get a pass here as intelligence comes with a price. Former software engineers for example are more often than not inspired by complex models and convoluted solutions. Their own intelligence and ability becomes the drivers of their endeavor as they assume that the key to success lies in cracking some secret code hidden inside the market’s gyrations. The fact that chaos rules the day is an inconvenient truth equally ignored by the smart and those with lesser neuron counts. As such a smart but righteous or misguided individual may be no different to someone of lower ability who ventures nomadically from one trading site to the next or absorbs dozens of trading books in hopes of finding that one system that beats them all.

The motivations may be different but the eventual outcome will be the same as the underlying premise feeding ones action is identical. One that is inspired by an assumption that we may one day overcome some final hurdle and from then on it’ll be easy time. Make no mistake – as soon as you overcome that last hurdle there magically will appear a brand new one. Because as human beings we are wired in a certain way that assures an unlimited supply of hare brained cognitive biases and misconceptions – no matter how smart or talented we are individually. In other words – intelligence or talent doesn’t offer us a free pass. Your journey will simply be a different one and success is not guaranteed. As a matter of fact all of the most successful traders I have come across are or were a lot more street smart than brilliant. Of course there is a baseline on the IQ front and I would hazard to put it somewhere around the 120 mark. But that’s not exactly a high bar and I have met traders dumber than that who did just fine pressing that one button that they somehow figured out works on a long term basis. As such success is a side product resulting from a series of positive choices. In fact this place was created years ago to aid us all on a daily basis.

Some of you may wonder why I often crack the whip early when I see signs of decay, impulsiveness, or an abandon of some of the prime directives we all aspire to abide to here at Evil Speculator. Naturally the dynamics of a virtual community, whilst permitting global collaboration and instant communication, also serve a certain bubble mentality with little to no personal consequences. For one we seek information that already supports our current view and we are quick to dismiss anything that at the surface violates any of our core beliefs. But there is also a social aspect to this. In the past the guidance of a mentor or group of peers came with implications and personal responsibilities. Your seat at the table had to be earned (with significant hurdles to entry) and cutting and running was frowned upon and may cost you your career. At the same time success and especially failure were exposed to the people around you and there was no easy way of hiding them either.

In a digital world we are however free to simply extract ourselves in periods of discord and thus avoid personal consequences of actions, decisions, or personal behavior. Stomping your foot and running off is a character trait mostly exhibited by children but online it seems to have become the norm these days, often after angry insults have been exchanged. It takes quite a bit of discipline to overcome the temptation of avoiding negative experiences and stress but I believe cutting and running to be a cowardly choice with long term implications. Successful people are never the product of easy choices and a careless upbringing. Like a good sword the friction of life, e.g. personal strife, being forced to overcome personal limitations, creates a person who is able to face challenges with easy that would quickly thwart others.

Money is just the result of being successful. You can chase simply money but drug dealers and career criminals do that a lot more effectively than the rest of us. Personal growth however bestows wisdom and experience which will lead you to new challenges you didn’t even know existed. And that my dear steel rats is what we really should aspire to as it is the real key to happiness and a successful life. Not one of convenience and easy answers. If you seek those, well – there are plenty of people selling that out there and I’m afraid you’ve come to the wrong place for that.

And there’s your answer – I crack the whip early because you need it. We all do – nobody gets a free pass. You may curse me today but you’ll thank me later (one hopes).


Alright, let’s get to work. I’m tempted to grab a long here as the tape is getting ready for a big move. Directionally this could go either way but I don’t see anything bearish just yet so I’ll stick with the long side – for now. Watch the Zero for a hawk today and tomorrow – something’s going to give here soon.


EUR/CAD – very small short here on a bounce higher. I do like the daily panel and the idea here is a ride lower to the 100-day SMA. The trend has been to the upside until recently and until now I expected a sharp push higher. However we have accumulated quite a bit of resistance now and I think the upside will be plastered with hurdles.


Gold – things are coiling up here and this chart is starting to look pretty bullish. But we can always be easily fooled and thus we should not relent to directional thinking. For now the long side looks good but only with a small position. I would actually like to see a drop lower near that NLSL at 1129.6 – that would be a wonderful long opportunity given the current context.

A few more symbols below for my intrepid subs:

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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Coiled Up To The Max

As you are probably already aware – the Federal Open Market Committee begins a two-day meeting on Wednesday and will deliberate the first interest rate increase in nearly a decade. Analysts seem to be split over the outcome however I would be rather surprised if the Fed decides to hike. Yes, there has been a lot of pertinent jaw boning since late last year. But behind all the spouted rhetoric hides very tangible fear about the shock waves a hike may cause. For one the Dollar would most likely punch massively higher – affording the mighty Mole an even more lavish and immoral lifestyle over here in poverty stricken Spain. Expect me to buy up massive amounts of property and elect myself the rightful ruler of Valencia. Heck maybe I even change my last name to Borgia and re-implement prima nocta.


But all joking aside – while everyone is treating water we rats have work to do. No other chart shows us the accumulated anticipation like the E-Mini futures and I have decided to post a tryptic so that you are able to take in the entire context, starting at the daily, the weekly, and most importantly the monthly panel.

You don’t have to be seasoned analyst to see that the daily is now curled up to the max. That first drop down may either have been this year’s correction or it will be remembered as the first dip that preceded a massive slide lower in equities. If I had any idea as to where this pendulum may swing I would offer it. However we are literally sitting at the gates of hell with almost perfect context across all three time frames. By anyone’s definition this is a very bearish looking chart. But I have seen too many stick saves in the past few years to count out the bulls just yet. Thus, lacking any further evidence and with daily/weekly/monthly support levels yet intact I have decided to hold my small long positions I placed last week.


Bonds update – here I have gotten a bit more luck. The Friday entry was well placed and I am now moving my stop to break/even.


I’m waiting for a little bounce higher so that I can get short gold. Willing to be long above the 100-hour SMA but only 1/3R if it plays out this way.

Where is the gold!!? Anyone remember this awesome band from the 1980s? I used to dance my ass off on that tune way back in the days – we’re talking spiky hair and Doc Martin boots – the works. Unfortunately they just don’t make raw uncompromised music  like this anymore. Whether or not you like EBM – in today’s PC soaked social media policed environment this feels like a refreshing air of authenticity from the past…

Anyway, quite a bit more looming below the fold – please step into my lair:

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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