The Last Bear Standing Is A Bull

The annoying thing about late stage bull markets and in particular the formation of long term tops is that they take forever to play out. Navigating increasingly volatile swings accompanying the final throws of a dying bull cycle takes considerable amounts of patience, discipline, as well as skill. Like Bob The Horse reminded us the other day: Bear markets go out in a bang and bull markets go out in a whimper.

Now the dirty little secret about early stage bear markets is that the last bear standing is usually a bull. Yes, you read that right. Traditionally it’s not weak handed bears who take down a bull market, it’s simply a lack of buyers. Guess what – all those snarling bears who were printing some mighty coin in 2008 are long gone, wiped out during their persistent attempts to call a top when there was nothing but green candles ahead. I myself have seen their (virtual) faces disappear right here – one by one they simply vanished. The few who survived the ravages of one of the most significant bull markets in history relented and changed their approach just in time before their accounts had melted away like late winter snow in the glows of a spring sun.

Arguably this has been one of the most hated stock market advances in history, rife with controversy, bail outs, and market manipulations. But let me assure you that in retrospect – many years from now – you all will miss it. Because it was just too sweet and too easy while it lasted. Your children and grandchildren will look at those monthly charts and ask you how in the world you managed to fail banking a fortune in five years of such bull market extravaganza.

And I’m not talking about fairness – you all know how I feel about QE and Fed/ECB interventions. But from a trading perspective – boy – it was pure manna from heaven and it won’t ever come back – not in our lifetime at least. What awaits ahead won’t be as directional and it won’t be as easy. If you thought trading was difficult in the past five years then you ain’t seen nothing yet.


Now as you may recall I managed to squeeze in an ES short at 2040 yesterday morning and I consider myself extremely lucky as it went straight down from there. Now we’re basically hanging by a thread here and I’m not going to claim that we won’t see yet another FU rip higher, killing a boat load of shorts in the process. But that’s part of our existence as traders – not knowing. You don’t have a crystal ball and you basically just have to pick your battles as they present themselves. The war never ends and the goal is to simply keep winning more than you are losing. Choosing to be a trader is a bit like being born into European royalty in the medieval ages – there’s always a war on and participation is mandatory. And if you win enough you get to pillage ;-)

Anyway, if you take out shorts here then put your stop above ES 2040. Yes, it’s a huge range but that doesn’t matter – if this thing really breaks you’ll need that range anyway not to get shaken out. And if it bounces here and breaches 2040 then the bears are dead in the water (again) and we are painting new highs. Alea iacta est.


EURUSD – I’m long here and I hate it. Stop below 1.1251, very much hope it’ll get touched but as you know I’m a lowly expat who earns in Dollars.


The Dollar index however is looking pretty solid here and I’m long with a  stop below 94.6.

More short term goodies below the fold…

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


Ship Ahoy!

We finally made it! Another dreaded holiday season has come to an end – at last. Don’t get me wrong, the Mole enjoys a bit of leisure time here and there. But effectively we’ve had zero activity since about December 15th and I was starting to go cold turkey – we are talking serious market withdrawal symptoms. It didn’t help that our ‘Santa Rally’ effectively lasted three days, and very few of us managed to catch that one.


But that’s all behind us now and along with slowly increasing daylight hours we are ready to steer our sails into new market territory. I hope you’ll be along for the ride – this year should be interesting to say the least. As I hinted at in my last post – I have an inkling that it’ll be a rough ride. But have no fear – Cap’n Mole will be on deck to steer you guys through any rough waters. Maybe I should get myself a parrot and an eye patch. Arrrr.. matey!


Courtesy of some heavy jawboning by my new best friend, Mario Draghi, the EUR has been painting new lows this morning. The only pair that showed any sign of strength was the EUR/GBP as the one pair that’s been pounded more than the Euro. So the pound sterling gets pounded and now faces the 100-hour SMA which did offer reasonable resistance  in the past few sessions. I’m short here with a stop above 0.78136. Ready to flip for a long with a stop below 0.78 if it breaches that.


Equities – the spoos are back at the 25-day SMA and I’m not seeing any ST context that would justify taking entries here. Perhaps if we retest those lows I may grab a long position. Today’s the first full trading session of the new year and we’ll probably see a lot of reshuffling by fund managers and institutional traders. So I’ll still be treating cautiously but am now in full scan mode to get repositioned.

That’s all for now – see you guys later this afternoon.

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Freaky Forex Friday

Seems like most of you rats have finally turned into mindless credit card swipin’ shopping bags draggin’ consumer monkeys. Not the Mole – no sireee – all my Christmas shopping is done in July, when the weather doesn’t suck!


That’s more like it – pass me the Glühwein!! Alright, less of you means more goodies for me and I’m talking juicy short term setups – especially the Forex side is looking rather festive this morning. And unlike Santa the Mole is dishing it out all year – plus I favor you naughty ones.


Palladium – looking good here and I already grabbed a long with a stop below 789. With a bit of mojo perhaps that daily NLSL can be reversed today.


AUD/JPY – it’s battling that daily NLBL but is also supported by the rising 25-hour SMA. Got to get out of the gate or it’ll slip lower again. I’m long here with a stop below 97.2.

More below – 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.

You have been briefed – now have fun but keep it frosty. Depending on participation I’ll do a follow up post this afternoon.


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