We’ve Got Movement

Despite yesterday’s lottery tickets the odds supported continuation lower and that’s exactly what we got. Early in the morning near the open there was a moment when I thought the bulls still had a chance – yesterday’s lows had held up overnight and we were slowly crawling higher. However shortly after the bell that low was crushed and it’s been a sea of read since. Let’s see where we are and where we may be heading:


The E-Mini is now touching its 100-day SMA and the easy part of the journey is over. That doesn’t mean it’s the end of the line for the bears. We are most likely going to close below the daily NLSL at 2070.25 and despite a bounce we could easily continue lower afterward. As I’m typing this our current line of defense is the weekly NLSL at 2064 and if that one doesn’t hold we have a stack terminating near 2030. Below that the bulls are quite frankly screwed.


Yesterday I showed you guys this P&F chart and pointed at 2080 as a level to keep your eye on. Well, if we close below that – and the odds are high we do then we’ll finalize a double bottom break down on our SPX P&F chart. The current temporary target is 2020 – my money says we may drop lower. Again, if we bounce right here this may change again. A run back to 2095 would trigger a low pole reversal warning.

Oh – you didn’t see that chart? Probably because you’re not a sub – an unfortunate situation you should remedy! ;-)


Our crude campaign is proceeding according to our nefarious plan. What can I say – we got a perfect entry there and I’m holding this all the way. My trailing stop now advances to 56.07.


We’re not in this one but bonds have literally fallen off the plate over the past few days. I’m seeing very very soft support here but would not dare taking entries until price confirms that a low may be in place. Anyway, keep an eye on this one. If you’re short – don’t bloody touch it and let your trailing stop take care of you.


Very very nice setups tonight – I’ll throw one out for free the rest is for the subs only. Palladium – long above 796.80 – my stop goes below today’s lows.

Quite a few more waiting below the fold:

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Did I promise too much? Now let’s go and get that money!


Mole Versus The Ukrainian

I trust you all had an enjoyable spring weekend. Over here in Valencia it’s starting to get pretty hot already and I saw some of the clocks with temperature signs flash 36 Celsius (97 Fahrenheit) when I was heading to the beach, where it was fortunately much cooler with a lovely breeze. During training with my crew some Ukranian dude versed in MMA suddenly showed up and started to criticize our training style. I wound up sparring around with him a little which was really interesting as he was desperately trying to get me into a typical sparring exchange (jab jab – dancing back/forth). Systema teaches us to remain loose/relaxed and to not let the other guy direct the pace or style of fighting. Heck, I didn’t even raise my hands and just waited, which confused the hell out of him. He was quite good actually - we both took some and dished out some and I really enjoyed it as it was a great test of what happens in real life when the gloves come off. In the end we shook hands and introduced each other to our wives, both having learned a little lesson. Mine was to always be prepared to be challenged and his was to not prematurely judge someone else’s approach/style.

The analogy to the world of trading for a living is that you can paper trade until the cows come home but until you actually use real capital and taste some of you own blood it’s all just a game. Operating under pressure and controlling your emotions is the aspect of self management most traders do not spend much thought or time on. And give it a few hits and a bad day and suddenly all your bad habits, your fears, and your instinctive responses are right back to bite you in the ass.

For some of you this may be a strange analogy, especially if you shy away from physical confrontations – most people probably haven’t been in a physical fight since high school and frankly it’s not something I encourage, just for the record. Neither do I enjoy being punched in the face – plus I’m way too handsome (under the right lighting conditions). However I draw many parallels from fighting as it forces me to a) relax and b) puts me into a situation which I cannot control and which potentially will cause injury. I truly believe that doing this on a recurrent basis keeps me more grounded, keeps me humble, and compels me to continue working on my skills. The more often I train with my guys the better I feel, the more relaxed and Zen I am. That in turn affects my personal life quite a bit – here at home dealing with the usual trials and tribulations that life and marriage throws at you, as well as maintaining this blog, supporting hundreds of subscribers, picking and maintaining campaigns, developing new tools, you get the ida.

Moral of the story: Find something that challenges you on a continuous basis – that puts you out of your comfort zone. If you like martial arts – great, any style is good, just make sure that there’s real contact and no shadow boxing. If you on the other hand enjoy sky diving, or sailing, or climbing, or scuba diving – whatever it is, make it a regular part of your life. Heck, if I was still in the U.S. I would partake in a sniper course right now. Not because I ever see myself taking out Columbian drug lords but because I have a hard time not moving for more than perhaps ten minutes. Without boasting, I’m an excellent shot actually – have been from the first day I picked up a firearm. However out in the field I would get found out quickly as I wouldn’t be able to just lay there for hours on end without moving, especially if some creepy crawler was making its way up my leg. And being a sniper is all about not being seen – taking your shot takes less than 0.1% of the time of your deployment. Not as glamorous as would imagine from watching the movies. So in a nutshell – expose yourself to the things you really hate, and especially the things you actively have avoided.

To lead by example I’m going to start taking cold showers in the next few weeks. I hate the cold but will begin finishing hot showers with cold rinses and then increase the period each day. I keep you posted on my progress ;-)


Alright, our NQ campaign is proceeding nicely and I’m glad that I held it over the weekend. Not by grand foresight I may add but because I managed to snag a great entry on Friday morning – so did you I hope (it was in my morning briefing after all). Now we are just at a point where this thing either starts gaining traction or will fall apart. I’m keeping my stop at the break/even point for now.


EUR/USD – obligatory shake out after it touched the 100-day SMA. As a side note – we got a great target exit there and although I have no clue as to why the 100-day works so well for me I’ll continue using it as long as I keep nailing spike highs or lows like this ;-)

Anyway, I’m not having high hopes of a big reversal. If you’re new here – I live in Spain and earn in Dollars, so you do the math – I would love to see the EUR drop back down. However what the lowly Mole wants and what the market gives him are two different pair of shoes. Which is why I’m long here with a stop a pip below 1.11 – 1/2R only as it’s a bit experimental.If you’re late for this one then don’t chase it – wait for a retest of the 100-hour SMA.

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


You Snooze You Lose

Just last night before the close I encouraged you guys to start paying attention as we were pushing near important inflection points across the board. And not only that – I backed up my outlandish claims via a laundry list of juicy short term setups, offering cheap seats on very promising daily campaigns. So let’s see what happened overnight:


Starting off with the most insignificant sector right now – equities. Back to the woodshed it is unfortunately and this chart is now starting to resemble Dr. Zeus’ worst nightmare. Temporary backstops here are the lower 100-hour BB near 2090, the daily NLSL at 2087 and if that fails we may hold near the 25-hour SMA at 2080. I for one am not too eager to throw any coin into anything related to equities right now. But that may change as soon, so let’s not get complacent here either.


AUD/USD – it seems like the evil market goddess favored my nefarious plans as I got what I would call a perfect entry, just as planned. I am definitely making this a daily campaign – stop now at break/even.


AUD/CAD – got extremely lucky here as well. Not so much by my entry but that I escaped stop out by a tick or two. Also staying in this campaign but am taking partial profits here. – clearly there will be a bit of a shake out after such a push outside the hourly BBs.


EUR/CAD – so far so good and my stop is now at break/even. Nothing else to be done here right now.


EUR/USD – incredibly I also got my 1.086 entry here. Better to be lucky than good I guess… Much to my chagrin of course and right after I’m done typing this I’ll head to the ATM to pull out a bit more cash. Looks like this may turn into a runner and head to 1.13. I’m not liking it but this is a pretty good hedge.


EUR/JPY – good entry as well and we are in good shape.


NZD/USD – looking good here! Stop still at break/even.


Copper is the one laggard of the bunch and I got stopped out at break/even – big deal.

Words To The Wise

Over the past few years I have been experiencing this phenomenon over and over again. The tape is pushing sideways and people are banging their heads against the wall for weeks on end, against my usual advice to lay low and to keep one’s powder dry. The board is starting to resemble a ghost town with large tumble weeds rolling through the comment section. Everyone is worn out and nobody is paying attention as recency bias rules the general outlook. Of course this is exactly when you need to pull yourself together and start looking for early signs of a break out move. You may get it wrong once or twice but as the bus empties by the day the odds for a big move are increasing as BBs have contracted and the tape is coiled up like a snake.

And almost every single time only a small minority here snaps into action and does what needs to be done. As Ed Seykota once put it so aptly: “A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.”

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