Now Reading
Clues – I Got Clues
79

Clues – I Got Clues

by ScottJanuary 31, 2012

Interesting thing happened today… we tried to go down, and reversed painting a hammer candle, which as we all know is bullish.

Now we are at major trendline resistance, the move is long in the tooth, and to my eye it looks like a simple short squeeze without attracting fresh buyers. That is the big question… did the short squeeze from the breakout of the triangle pattern bring in enough fresh longs to achieve escape velocity?

Everything changes from here if we go up and stay up. Its long all the way if we go a little higher.

Given that the high is unretested, and the hammer candle which by definition represents a failed attempt by the bears, the odds OVERWHELMINGLY (like 80% IMO) favor an ATTEMPT to drive the market up.

Here is where it gets interesting. This trend looks ready to stop right here right now. If we go up today, WITHOUT making fresh highs, that would paint a RETEST VARIATION SELL (look it up). That would be an OUTSTANDING short.

As an intraday play. I would look for a reason to get long early (a small gap down would be a good play) and hold it until we get a zero lite divergence.

If you want more clues, look at the way bonds turned before equities. Now take a look at the story each days price action is telling.

Scott


About The Author
Scott

  • http://evilspeculator.com molecool

    Thanks for the post mate. A little reminder – please use ‘link to image’ – thanks!! 😉

  • Anonymous

    /GC filled @ 1741

  • http://evilspeculator.com molecool

    Do you ever sleep – hehe 😉

  • Anonymous

    LOL! Had a nice break over the holidays with much of January off. Back to the grind:)

  • Anonymous

    Looks like Euro open is being faded.

  • http://evilspeculator.com molecool

    TOS data feed is having a lot of problems lately. Fortunately I don’t have to rely on their signal…

  • http://practicalt.blogspot.com/ Gold_Gerb

    (GG chuckles)

  • Anonymous

    Again I fucked up 😉 

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    I’m in this too, what’s your SL?

  • Anonymous

    Set @ 1750

  • Anonymous
  • Anonymous

    Question; how soon before a RTVS is triggered?  i.e. if we fail to make a new high today after yesterdays (on the face of it) bullish candle, is it immediately in play?  I have looked at the cheat sheet, and just looking for clarification.
     
    As I see it we have had 3 consecutive lower closes.  Assuming today is a higher close, and doesn’t paint a higher high, we are then on the lookout for a potential RTVS.
     
    Then if we do not paint a new high within 5 bars of making the higher close, we are looking for short setups?
     
    Would appreciate if people could clarify whether I have this right or not.

  • Anonymous

    Thanks Scott, It seems to me that the tape might have painted
    itself into a corner.

    A.     
    If we go up today, without making fresh highs,
    Bearish

    B.     
    If the market does make a new high and stays near
    there, Bearish

    Since there is the potential to set up DeMark
    sell signals on several time frames.

  • Anonymous

    assuming today is a higher close, then the rtv-sell set-up is complete, and you would enter short on break of todays daily candle low with stop at todays high?
    The set-up has to all happen within 5 (daily) candles of the significant high

  • Anonymous

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/e1b20f6d-0339-4cda-b6d4-025a4259757d/2012-01-31_0827.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/499718eb-a6ef-45d0-88fb-53f17727f37b/2012-01-31_0830.png
    Hey, ladies! I hope everyone is doing well this wonderful morning! Lets see ahhh yes yesterday we had a nice action. In the futures chart TO me of course it tells me that nothing is for sure yet. More bearish than bullish. Yesterday in the cash S&P we had a lousy nightie night. The action needs to climb out of the area the red oval occupies. Not healthy. 

  • Anonymous

    Case-Shiller index, What is it worth now?

  • Anonymous

    Dont care. Housings got another 10 yrs to go down. For now shorting the CAD. Neg GDP.

  • Anonymous

    Ya, will have it paid off and it will be worth less than the paper it is written on.

  • Anonymous
  • Anonymous

    Thats the way it should be. How much do you expect your car to be worth after 30yrs? Stupid central bankers ruining everything by causing inflation.

  • Kudos

    I’m slightly confused as to what is going on in bonds. Doesn’t money flowing into bonds signal bad things for equities? You say bonds turned first, the turn was in the opposite direction (increase in prices after falling while the market made a new high). Equities turned down with the turn in bonds, now what? If bonds are right then the RTV sell is likely

  • Anonymous

    Good call CS, added to my short at the open:)

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    Yeah that’s around my stop, looking for correction back to 1650. Getting close to the SL, this metal just wants to power on!

  • Kudos

    added a few more puts as well, bringing me from delta/Vega neutral to delta negative and vega positive

  • Anonymous

    Note that /HG never filled it’s gap, need the dollar to help in this matter.

  • EvilTrader

    I wouldnt read too much into it, but Economic data not helping bulls this time :

    Chicago PMIBusiness Barometer Index – Level

    Prior 62.5 Consensus 63.0 Consensus Range 59.0 to 65.5  Actual 60.2 

    Dont know if trend changed, but rally seems stalled, not good for bulls at all.For me we are experienced typical high volatility at intermediate TOPs.

  • Anonymous

    Wow – there are days where the market just seems to be playing by the script written by our eminent hosts.  Bonds turning, equities following.  Game is not over yet, but very perceptive read.  As usual, thanks.

  • Anonymous

    Yes, watch for more whippiness at 10am as Consumer Confidence number released…3 minutes

  • Anonymous

    AUDJPY giving a clue:)

  • Kudos

    If you want to read into the ISM, read into the nation one. It has been showing growth at the same time that Europe, China and the UK have been showing contraction. Might be helpful for medium term roadmaps, but I would not try to trade a shorter term with these announcements. 

  • Anonymous

    More like a red flag!

  • volar
  • Anonymous

    yeah. They use news as excuse when technical points are reached?

  • Anonymous
  • Anonymous

    another 1300 retest in the play?

  • Kudos

    If today was a retest variation sell. And we get any follow through to break yesterdays hammer low, expect to hear that the Portugese potentially needing a haircut on their bonds is the reason. Not like it isn’t being priced in now or anything, with the spread to german debt being around 1500 bps, but news is just like that.

  • Anonymous

    ZL trend line is still in play.

  • Anonymous

    Mmm retest? Only my opinion, but 1300 is not a retest to me 1250 is the retest for me.

  • Kudos

    /NG touched its NLSL at 2.512 and is holding for now. Be interesting to see how it closes

  • EvilTrader

    flash crash replay ??

    *praying for one* 😀

  • Anonymous

    Second that!

  • http://evilspeculator.com molecool

    Bonds – yes, but the AUD/JPY has been pointing down all night. That spike up was an awesome shorting opportunity – unless one was still sleeping …. Grrrrrrr…

  • Anonymous

    Buy The Dip!

  • EvilTrader

    don´t !

  • Kudos

    I love this troll. He’s the good luck troll for shorts. If he doesn’t say buy the dip, its our sign to go long.

  • Joe_Jones

    Don’t bother. His calls have been excellent contrarian indicators.

  • Joe_Jones

    Beat me to that!
    😉

  • Anonymous

    Yeah man golden cross! Please keep buying.

  • volar
  • Anonymous

    Have support for AUDJPY. Out of shorts with ZL and small range. In calls again.

  • Anonymous

    Maybe he’s on Goldman’s FX team.

  • Kudos

    Mole, is the /NG NLBL still in play at 2.485 ? I see we are currently under the NLSL of 2.512 any thoughts? In particular, any thoughts if we get a close in between those two points?

  • Anonymous

    Im taking out guerrilla short taken at 1.0650 yesterday.

  • Anonymous

    Closing the CAD short taken this morning.

  • Anonymous

    CL looks peculiar. Reached the daily NLBL and dropped like a rock, pretty bearish.

  • Anonymous

    /SI finally got high enough to take the elevator down on the 60 from the MBB/ SL

  • TwinTurboRX7

    Inside bar on all three zfx hourly…should we look inside bar on hourly or just daily? Or does it only apply for equities?

  • http://iberianviews.blogspot.com/ catracho

    yes looks like trading in a bull flag 97 -101 tried to break North today but failed so prob some weak longs getting out now just see if it can get to lower line..if not I guess it will make a run at 101 again

  • nyse

    Thanks for that pic.

  • Kudos

    I sold back most of my puts not to long ago. Seems like we can’t get a final push downward once Europe closes. Looking to re-up by end of day

  • http://practicalt.blogspot.com/ Gold_Gerb

    Ever notice a high volume event can point out a price level?
    SLV
    http://i44.tinypic.com/f4l5qu.png 

    maybe it’s just mental M.

  • Anonymous

    Anyone know what’s up with NGXS? Stopped trading?

  • Anonymous

    Capitulation?

  • Anonymous

    At the moment it appears to be sandwiched between a NLBL at today’s high and a NLSL at the low. So a break of either would make for a decent trade. We’re also sitting right above the 61.8% retracement of the 2011 drop, so a break lower could potentially lead to an extended downside move.

  • Anonymous
  • nyse

    http://biz.yahoo.com/e/120130/ngsx8-k.htmlNotice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Tra 

  • Anonymous

    Damn! Guess the volume is so low didn’t even notice it:)

  • Anonymous

    Inverse volume hole. Nice.

  • Anonymous
  • http://evilspeculator.com molecool

    Good eye! 🙂

  • Anonymous

    Looking to exit calls at VWAP and look for the next set-up. Kind of a slow grind today.

  • Kudos

    reloaded spy puts on vwap 

  • Anonymous

    Thanks Volar, $BPSPX also at lofty levels, 80. Levels last seen late Oct. high and highs of last May.

  • Anonymous

    Nice! waited to long:( Maybe another attempt, still early.

  • http://practicalt.blogspot.com/ Gold_Gerb

    Raised-by-Gerbils SLV roadmap.
    pivotal point IMHO.
    http://i40.tinypic.com/2iik58k.png

  • Anonymous

    Seriously, anything that doesn’t include multipliers or triple ratios (hint: GLD) * is like store bought coffee sans the nutmeg.

    *and an entire color palette.

  • Galazkiewicz

    Scott- is the bullish case for the daily $SPX a higher probability since the RTV Buy on the montly is still valid?

  • http://practicalt.blogspot.com/ Gold_Gerb

    (GG’s ears perk up)

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤ø„¸  N E W  „ø¤º°¨ 
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸