Monday Snooze

I’m not going to exacerbate your suffering by reemphasizing what a boring ass session we had to endure today. Early in the morning DarthMole suggested a jump in volatility and by the looks of it I’ll have him report to the Evil Speculator dungeon for a much needed tune up.

2014-11-24_copper_ST_setup

Really not much happening there on the daily panels. Many of the futures contracts rolled over last Friday and I’m always a bit cautious taking entries until we’re a few days in. However that said – copper is looking pretty juicy as a long right here and now which is why I just emailed this one out to all the subs. Put your stop below the BB and Bob’s your uncle. If stopped out I may consider going short as the daily looks like it just passed through a wood chipper and the bus would be literally empty.

2014-11-24_silver_setup

Then there’s silver which I may throw 1/2R at if it breaches any of the IP triggers tomorrow. There is a lot of misdirection in the tape and something is telling me to not test my luck.

Currently we have a ton of symbols which are on a rampage (i.e. Dollar and Yen, and of course equities) while a bunch of the futures are in sideways mode (AND just rolled over). My charts are not yielding a whole lot of context and thus the Mole hunkers down and prepares for the EOY Santa Rally. I suggest my steel rats do the same – no reason to spend time watching this slow motion sideways churn today.

Knowing when NOT to trade is half the battle.

You’re still here? Damn it – don’t you have a family or something? Friends? Facebook page?

See you tomorrow ;-)

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Cheers,

Tuesday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

2014-11-18_NQ_briefing

Equities still gyrating within their range, however the NQ is looking a bit more gung-ho and I’m grabbing 1/2R right here with a stop below 4203.

2014-11-18_crude_briefing

Crude just breached it’s 100-hour SMA and is back for the obligatory retest – NLSL right underneath – I love these types of setups. Long here with a stop below the 25-hour.


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You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

Cheers,

Muppet Time!

It never fails. Despite all efforts to the contrary a handful of you retail rats accidentally find yourselves in the midst of a winning campaign. Invariably early withdrawal symptoms to your expired ADHD meds are starting to appear as the urge to do something (i.e. take profits now or otherwise ruin your odds of long term profitability) is growing by the hour. After all, winning is not something you are accustomed to and there’s no social media support network backing you up as everyone now hates your guts and hopes for an opportunity to urinate onto your shallow grave. For it is lonely at the top and you are on your own.

Now I have tried many times to drill this point into your rodent brains but apparently the reflexive Pavlovian response is tantamount to my childhood attempts of stacking snausages onto my dog’s snout. Very rarely do you get a to a count of three as Woofy simply can’t wrap his canine brain around the fact that the longer he is able to wait the bigger the pay-off. In the end all this boils down to the fact that the half-life time of your ability to sit still and do nothing is shorter than that of your average field mouse.

The-Muppets-1

Now, to answer the question on your mind: Yes, and no. It all depends on your trading style.

Oh, what was the question you ask?

Is it a good time to take profits here?

Well, obviously it’s a great opportunity to shake out the muppets. Look at the chart below and what I posted yesterday. If you got positioned when/where I told you to on Monday morning then you are an honorary member of the strong hands club right now (no secret decoder ring). And this grants you the rare luxury to do nothing and let things run its invariable course. For every time you are in an ongoing campaign there is only one equation you should be concerned about:

What is the ratio between opportunity and risk right now?

2014-10-22_spoos_briefing

Meaning, what are the odds the tape is going to advance (or drop) more than the odds for it to reverse and stop me out (wherever your stop is). This is not an easy answer and it depends on your trading style. For automated systems for example I painstakingly measure the average MFE and MAE of each system and then use those statistics to arrive at an optimum campaign management style.

For discretionary campaigns you employ a fuzzy logic approach based on your pertinent experience and again your trading style, which can be shifted as the campaign unfolds and new evidence is revealed. That however requires strict personal discipline and that right there discounts 90% of all participants. I know I know – the truth hurts – you can blame your Kindergarten teacher or some dramatic childhood experience if that makes you feel better. Believe it or not – I don’t come here to stomp on your fragile egos – no matter how tempting.

2014-10-22_1510

Now for me personally here right now I am more concerned about the possibility for the bears to have their faces ripped off. And the odds are about 50/50 that this will happen in the coming week. However we still cannot discount the the possibility that we may retest the lows or drop even lower. Plus today’s event schedule offers a ton of opportunity for monkey business across the board. The bears still have a prayer of a chance to turn the table as long as we remain below the 25-day SMA.

I for one am perfectly happy to endure a deep retrace because if this eventually continues higher I’ll be holding it all the way. And if it fails – well, I’m out at break/even. So my worst case sceneario is to lose nothing and the best case scenario is to smile all the way to the bank. Again. Remember the Dollar campaign two months back. Same idea and same approach.

2014-10-22_crude_briefing

On the setup side I really like crude this morning which seems to be gaining a bit ground. Besides everyone hates it right now which increases the odds of a little surprise squeeze. I’m putting half an R on long above the 25-hour SMA – stop below 82.


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Words to the wise:

The-Muppets-2

For some of you it is important to realize that trading is not a spectator sport. Invariably you will get the crap kicked out of you a few times and everyone processes that experience in different ways. Some simply walk away, others dust themselves up, learn their lessons and jump back into the ring. But there are many who cling onto the dream and at some point decide to become some sort of couch coach. A lot of self deception and pain avoidance is at play here but essentially it makes you feel as if you’re still part of the game. ZeroEdge is full of these people – the vast majority of them haven’t executed a trade in years.

Drawing lines on a chart and talking about it doesn’t make you a trader – only placing trades and accepting the invariable consequence of either winning or losing does that for you. Even if you’ve had a tough year and you may decide to sit things out for a while there will come the day when you have to get back on the horse. When you’re at that point we are here to help you and guide you along. But it’s unproductive to come here post some illustrious charts without intent to use them for trading. At best it’s a boring academic exercise and at worst it’s a waste of your and our time.

Cheers,

 




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