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Convergences
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Convergences

by The MoleApril 22, 2009

UPDATE 11:00pm EDT: I just noticed something interesting that should have been staring me in the face previously:

See how that diagonal and the 78.6% fib line meet around 865? I have an inkling we’ll head up there today, despite the fact that I just grabbed some index puts.

Here’s the channel again – see how the upper boundary intersects there as well?

I think this make for a great target for the Goldman Boys to cash the chips they so obviously accumulated overnight.

UPDATE 12:02pm EDT: Good ole’ T.K. (friend of the blog) just posted a great treat on trading psychology – as you know one of my favorite topics. I strongly recommend you head over there and read his insights – all of which you should memorize and then internalize. It’s a bit like martial arts – just because you learned a move technically doesn’t mean that you’ll be able to use it when the moment arrives. Yes, even you can become a stone cold trader who laughs his way to the bank – but it won’t be easy and it takes daily discipline and a complete comittment to excellence.

UPDATE 1:36pm EDT: Looks like today is going to be one of those horrible whipsaw days. I’m just going to sit back and focus on catching up with some of my chores as the MMS are playing ping pong with this thing. Unless we breach that diagonal above by a healthy margin I’m not selling my puts anyway, so there’s nothing much to do unless you are swing trading. Speaking of which, Zero traders caught a very nice divergence this morning which I pointed out πŸ™‚


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Keirsten

    I've been watching that broken TL too Mole, but there's also the S1 barrier, and so far it's stuck right there for now.

  • molecool

    I guess I'll just be talking to myself then… anyway… so here I was with those 20 neo-nazi commi pirates which I had surrounded all by myself…

  • ennuigo

    Thank Mole. You are a grand master.

  • yazzer

    I bgt a AAPL May 110/140 options strangle as a play on earning today….got the call side (140s) for 1.28 and the put side (110s) for 1.68….we'll see if AAPL can make waves either way…a +10-point move would net me a net profit of abt $1.50 (on the roughly $3 trade)…a -10 point move would result in a better profit of $1.75

  • molecool

    Well, if that's true then my puts will be smiling at me by EOD.

  • molecool

    The Swiss obviously disagree – LOL πŸ™‚

  • annamall

    I hope it works for you! πŸ™‚

  • Keirsten

    They've been painting those pivots pretty well for the last few sessions. You are the grand master btw as ennuigo said. πŸ˜‰

  • salvadorveiga

    that is what ? around 861 in Futures ? /ES ?

  • annamall

    That's why I was net long going into today, I thought I saw convergence. I closed out my IBM short legs for a huge gain! πŸ™‚ What a nice day. Can't wait for the future trading

    guten Tag!

  • molecool

    About 861.5 – yeah. Here's today's PREM: http://indexarb.com/

  • BalaB

    EWT question….
    Re: Wave 2

    Is there an average amount of time the drift into the second wave occurs? I imagine its not usually one day wonder….?

  • GoingForBroke

    Slope of Hope saw the retest of the rising wedge early yesterday, but like an idiot I ignored Tim.

    Ah well, I'll just have to sit tight in my shorts and absorb the pain a little longer. I'll treat this as a learning exercise.

  • traderQ

    Anyone have a wave count on QQQQ?

  • Fujisan

    Good eye Mole. It looks like a H&S formation to me.

  • itsgold

    Big move coming any moment now. Looks like we're coiled on the SPX.

  • salvadorveiga

    thanks that would make sense since that's 1,618 x Wave 1

  • ennuigo

    giving the love

  • BalaB

    Futures look like they may want to make another push up

  • roncofooddehydrator

    RIFIN is hovering in no-man's land for me. On the 2 hour chart it is very close to signalling a buy on the CCI(18), which has performed well for me in the past (buying FAS). It's not there yet though and I've seen it reverse as well, so I'm staying out of FAS/FAZ until it moves more in one direction or the other.

  • annamall

    Google looked to be consolidating yesterday for a move higher. Bought ATM Calls yesterday
    Closed out 2/3 ESI Calls for 80% profit since yesterday morning. πŸ™‚

  • Captain1Lot

    Bought some front month SPY puts here (with very tight stop). Playing that 857.95 high today as a retracement…just tried to retest it but didn't break it

  • anthem

    There isn't any volume. The volume is like 1/4 what it was at 10am this morning so anything is possible with the low volume thats there.

  • BalaB

    I want you to read “Anything Goes Airlines” by Will Self
    Short story but totally reminds me of you. – Disgustingly brilliant.

    “The sweet smell of psychosis” is one of my favorite books.

  • annamall

    Just sold Apple 125 calls (yes) Now playing with house's $ plus some. I have 130/140 VCS now.

  • BalaB

    yeah..noted….

    i'm long the NQs with tight stop…if we can get a little more thrust, I'd be moderately comfortable

  • annamall

    BTW Anthem where are you?

  • http://tradingsigns.blogspot.com/ T. Waffle

    I agree, I am waiting to short NQ at 1360

    Double top is coming.

  • BalaB

    btw, it's noticeably difficult to NOT use stops but need to use the restroom.
    I've taken some very expensive urinations…..LOL

  • lester

    this tape is effing bullish amd I sold my Calls :o(. I am sooo temped to jump back on long but keep telling myself to sit on hands (SOH). Somebody tell me to get back long and get off my hands.

  • djgrind

    ? I think I will be trading on TOS primarily…tired of market differences between the US and EU…doesn' t make sense and on top of that cannot use your fantastic tools you developped…

    Thanks for your work Mole.

  • thunda72

    Do not go back long!

  • Blind_Squirrel

    not now, and I'm bullish, wait for the mkt. to come to you.

    If not, wait4 the next bus.

    We need to get you a Rx for Valium!!!

  • annamall

    Lester, at this point I would wait to go short, I am. I closed out a majority of my long positions.

  • Fujisan

    I see that now.

  • salvadorveiga

    Got my limit sell order filled at 856.75

    Now drop it ! πŸ™‚

  • TomOfTheNorth

    Astronaut Diapers!

  • annamall

    and the 10 mg ones @ that! πŸ™‚

  • HungryNewt

    Mole! You're fadding yourself? This is a side of you I thought I'd never see! πŸ™ Hopefully I'm just reading too much into what you wrote..

  • annamall

    I was just thinking the same! LOL Had to go pee and have actually lost profits doing it, but no can for me either! πŸ™‚

  • http://tradingsigns.blogspot.com/ T. Waffle

    Working order to short NQ @ 1360

  • lester

    thanks for the advice folks. Still shitting on my hands.

  • HungryNewt

    Tim is a pretty amazing trader. See the future he often does.

  • BigHouse(Aka Mr Vix)

    Short COH at 23.01…F U Coach and your bags lol

  • annamall

    πŸ™‚ it's a little quiet in here today.

  • Count_de_Monee

    Real traders don't pee. They're robots πŸ˜‰

  • romeobravo

    Are you still hanging on to your APPL 125/130/135 Call Butterfly?

  • EDC

    xlf lead yesterday, now since the SPX just made higher high as XLF did not…

    wait for the market to confirm a mini trend change?

  • BalaB

    LOL…..that reminds me of my days at Kent State….We had to sit at a bar stool on penny draft night, wearing depends, forced to drink and weren't allowed to get up for 8 hours…..

    ahhh….hilarious stuff

  • Squidman

    I've just never seen strong support for any time prognosis with EWT–seems like a crapshoot.

  • BigHouse(Aka Mr Vix)

    Put up a 5 year chart of COH. Its back up to the neck line of the h/s at 23.Thats why i shorted

  • callie

    857 weekly pivot…

  • maya

    mole sorry about stupid question but how do you use that chart
    thank you

  • C's & 3's

    I picked up some GS puts.

  • annamall

    Just went long SPY puts 85's

  • Count_de_Monee

    I still have my 120/125/130 butterfly on.
    Not sure whether to close it out or wait. Decisions, decisions.

  • LostIllini

    Still sitting here on my small mountain of Spy Puts, hating life with no “Smokey Bones” lip smacking fake ass smoke Bar-b-que. Harumph!

  • annamall

    I love their bags! πŸ™‚ Google strong today!

  • disrespekt

    do not chase the market

    only chase on obvious blowout rally or selloff days and set a mechanical trailing stop so that you get out if you are wrong.

    Mon was an example of a day to chase. Big gap down, no attempt to fill it off open, you go into SRS or some IYR puts or something high beta in the front month. But on a day like today if you are not already long, it's not a high probability trade to chase it.

  • v8muscle
  • roncofooddehydrator

    While you're sitting on your hands you should go through some charts and try to determine some signals that will help you in your trading. I'd suggest using 2 hour charts because that will help keep you from franticly trading in one direction then the other. Figure out how the signals will determine your entry and exit points, then backtest it as far as you can in the charts (thinkorswim is 60 days), recording every instance where you would enter, exit and then what the gain/loss is. Once you've got it all recorded, take a look and make sure your methods will yield you a positive gain in the long run. Then wait for your signal and make your trade.

  • BalaB

    Very interesting

    SPYs accross the board becoming very hard to borrow

    http://zerohedge.blogspot.com/2009/04/spy-have-

  • BigHouse(Aka Mr Vix)

    You will ove their bags even better when the stock goes to 18.50-19 to fill that gap in the bag πŸ™‚

  • fuw

    After the morning whippings (I always start my day that way) back and forth TRIN has been trending up, so it is not confirming the up move.

  • Squidman

    Good luck. Despite TA, there are some things I won't do on principle. Kind of like TK's OTIS idea. I will not short AZO. Likewise, I will not go against the power of the female shopper, especially on feel good things. The salons are going gang busters. That will continue.

  • HungryNewt

    I was thinking of doing the same thing… RR looks good.

  • thunda72

    Looks like we'll be testing the FAS VWAP shortly… On the 10 minute chart we're coming up on VMAP and 21 day MA.

  • annamall

    LOL Apple rock on!

  • annamall

    hmmm that can't be right can it?

  • anotherone

    If you ever make it to KC, I'll clue you in on some of the best smokey bones in the country. In fact, I may have to have them for lunch today. πŸ™‚

  • http://tradingsigns.blogspot.com/ T. Waffle

    Short /NQM9 @1356.25

  • LostIllini

    I love KC!!!! I have to switch planes at the Airport, it's a Southwest thing and I have to say that airport is the finest Homage to Stalinistic Eastern Europeon architecture that I have ever seen.

  • BalaB

    I don't know enough about the wholesale market to form a conclusion.
    I guess, it's more of an FYI…..

  • lester

    I was at that airport the day it was dedicated. I got to see VP Spiro Agnew read a dedication speech.

  • gannsecret

    don't think it will make 865
    try 861.75 (Ganns untold Secret)

  • annamall

    I sold all uncovered long legs for a 5 figure profit) hate to get greedy πŸ™‚ now holding May 130/140 call Spread

  • Count_de_Monee

    interesting divergence on the SPY v SPX

  • thunda72

    Nice…. that's as interesting as Chicken's Line of Intrigue! πŸ˜‰

  • Keirsten

    Short MA, tight stop.

  • salvadorveiga

    so far my target of HOD 857 held… got in at HOD, i hope that was the top… drooop it

  • lester

    do you have a target in mind for these??

  • thunda72

    There we go…. the VWAP and 21-day MA is broken in FAS. MACD is turning over too. C'mon back!

  • Prof_L

    Right shoulder being painted on IYR, targeting 61.8(25.69)-78.6(23.62) retracement of move from bottom.

  • Squidman

    Man, you are way too old to be so impulsive.

  • thunda72

    Bad GM news is leading this leg down, they're reporting now on Bloomberg now.

  • Blind_Squirrel

    everybody busy, still no further reply from katzo.

  • BigHouse(Aka Mr Vix)

    12:33 [GM] GM says it won't make $1 bln payment June 1: WSJ

  • Keirsten

    Meanwhile, those rah-rahs on CNBC just glossed over the whole thing.

  • Squidman

    Is that all you have to say? You're not the real Prof.

  • lester

    just went short SPY via Puts. I waited too long probably, but I am trying to be less impulsive.

  • lester

    I was only 13 then in 1970. Just went short SPY Puts.

  • annamall

    They always do Birman girl! πŸ™‚ Glad I went long SPY puts when we were up 70 points on Dow.

  • lester

    clarify. Ibought some SPY Puts which makes me short

  • annamall

    Lester you should have done that when the market was way up sweetie. awwwhhhh. πŸ™
    I am about to take profits on my SPY puts.

  • Blind_Squirrel

    Sure as hell doesn't look like it!!!!!!!!!!!!!

  • LostIllini

    How can GM not make a payment????? Did we not give them enough money??

  • thunda72

    Yeah… I'm glad I don't have cable. I can't stand those jive-ass turkeys. Actually, D. Faber does OK now and then. I like to stream Bloomberg from their website.

  • lester

    do you have a target for SPY for these Puts.

  • thunda72

    Yeah… I'm glad I don't have cable. I can't stand those jive-ass turkeys. Actually, D. Faber does OK now and then. I like to stream Bloomberg from their website.

  • BalaB

    +1 for saying “Jive Ass Turkeys”

  • thunda72

    I'm seeing 850 as a good support level, then down to 828 for the next Fib. RL.

  • rhae

    SPX 10m Fork, median line satified… does not mean it can not go higher… just happy…

    http://screencast.com/t/yevbQkFO

  • lester

    can you post when you do? thanks babe

  • Keirsten

    No, you're doing right waiting for a clear breakdown. It's a more conservative way to trade, but more consistent and capital saving in the long run. You plan your marks in the sand and stick to your plan. It could be a MA break, RL or whatever, but wait for you own target and stick to it. Have plenty of notes and alarms set on your charts too.

  • annamall

    Long SRS @ 27.00

  • thunda72

    GS just crossed over the VWAP! Momentum is building!

  • annamall

    If you go back and see the blog I did post it. I just took profits on the SPY puts now will wait for signal to go long if it comes. sorry you didn't see it, it was exactly 45 minutes ago I went long SPY 85 puts.

  • Keirsten

    My TICK alarm is firing now. Let's get this party started for cryin' out loud.

  • lester

    I saw your original post. I meant post when you close the position, but maybe you already did.

  • annamall

    I just did. No one ever went broke taking a profit (even early)

  • anotherone

    On the SPX, draw a trend line from the low on 3/30 to the high today. You'll see that we were following the trend up, broke through it in the first hour on Monday and just retested that line from below. Classic.

  • Keirsten

    Yep, and as Fuji mentioned we have a potential H&S here.

  • salvadorveiga

    Can I have some kudos please? πŸ˜€

    856,75 was high of day πŸ˜€

    EW at its best definetely… I guess we're now starting wave 3 down.

  • lester

    I actually wiated to see if SPY would go below the 85.5 level that it was kissing off of around 11 AM. When it dropped below, I went short. So there I had a plan all.

  • BigHouse(Aka Mr Vix)

    COH now at 22.10 from 23.01….I am now in the back yard burning coach bags lol

  • romeobravo

    Sorry, still a bit confused. So you sold the long legs of the AAPL butterfly (125 long and 135 long) and are hanging on to the 130 short calls? Or did you close out the butterfly?

  • annamall

    Party party party! Sold 3/4 long Apples when up over 2.00 (the 130's) now net short the stock

  • Keirsten

    What strike? I might join you on that one.

  • http://tradingsigns.blogspot.com/ T. Waffle

    LOL GM reports breaking news and market takes it as good news.

  • annamall

    I sold the 140's this morning for 1.30$

  • Keirsten

    Gotcha. πŸ˜‰

  • annamall

    sort of silly right? πŸ™‚ Looking for another opportunity to go into SPY either puts or calls.

  • annamall

    if the stock takes another pop I will sell some more. πŸ™‚

  • annamall

    NO no no!! LOL

  • Matador11235

    Nice top tick. hope you locked some in at 10 handles.

  • BalaB

    I'm pretty sure there's more money in the knockoffs.

  • itsgold

    Man, lots of whipsaw today.

  • annamall

    Just jumped into more SPY 84 puts this time and sold more aaple 140 calls.

  • thunda72

    …and now it's back below it. Looks like it's playing with the 200-day MA on the 1 minute.

  • Fujisan

    Aren't you lucky to get a private lesson from Keirsten?

  • LostIllini

    I feel slightly better about my small mountain of puts….

  • Fujisan

    Thanks, K. You read my comments!

  • GMunni

    I'm looking for 864 on SPX. We may even gap open there tomorrow to take both bulls and bears by surprise and then start selling off relentlessly. Watch today for relative weakness stocks.

  • TomOfTheNorth

    Charlie Gasparino touting his new book

    suggested title: I'm a schmuck

  • thunda72

    Just sit tight! πŸ™‚

  • salvadorveiga

    thanks … I was actually getting my finger quite nervous when we were at 855 thinking we could not go that high…

    This is to lester, the best decisions are the mechanical ones… make your plan, put the orders in and wait.

    Reacting on the moment usually goes wrong – personal experience believe me πŸ™‚

  • TomOfTheNorth

    on second thought, it should be

    “Charlie Gasparino: I'm a Gargantuan Schmuck”

  • http://tradingsigns.blogspot.com/ T. Waffle

    People thinks they don't have to pay debt it's good news. hahahahahahah

  • annamall

    I am now 5 to 1 short legs I have one 130 call for every 5 short 140's The butterfly has been long gone. πŸ™‚

  • slartybardfast

    Thanks TW, I joined you on this trade – looked too good to pass up.

  • lester

    TW are you still short?

  • TomOfTheNorth

    Why make a payment the day you declare bankruptcy? Makes perfect sense. hehe

  • itsgold

    Another move commin, hang on.

  • TomOfTheNorth

    ALWAYS listen to Fujisan's H&S predictions ;->

    (TOTN still kicking himself for failing to heed the last one – LOL)

  • lester

    UP?

  • salvadorveiga

    if someone has nothing to do other than watching the ticks

    http://www.jamlegend.com

    have fun rocking with your keyboard πŸ˜€

  • annamall

    Glad I got out of Gold puts yesterday! That Theta burn hurts. I am so full lunch was filet migon, spinach with sauteed onions and sour cream and chive mash potatoes YUM. Big leg workout today! LOL
    The MM's might try to run this thing back up. GS is very strong.
    Still long SRS, but may get stopped out.

  • Squidman

    Dear lady, you are a tall poppy around here–get used to it : )

  • Keirsten

    We need a close below the teal colored line of resistance today:
    http://tinyurl.com/dbh7e5

  • thunda72

    That's cool… I just found out yesterday the World Air Guitar Championships Regional Qualifiers are being held in my area. πŸ™‚

  • itsgold

    still coiling here. Market is trying to figure out which direction to go.

  • Squidman

    A real italian girl!

  • annamall

    yes, the mouthbreathers may take another run.

  • TomOfTheNorth

    CA mortgage default notices surge 80% for the Qtr

  • BalaB

    hmmmmm…..NQs showing some goofiness.
    MACD rising, SS dropping, Price rising….. 3min intra-day chart

  • thunda72

    That's right at the VWAP, which has been traveling sideways for an hour now.

  • roncofooddehydrator

    RIFIN just posted a buy signal on the 2 hour CCI. I'm in a small position of FAS at 7.90. The CCI on FAS hasn't posted a buy signal yet, so if it does I will increase the size.

  • BalaB

    that's teal? oy…I'm so color blind….. : )

  • annamall

    I sure am! Wow was that delicious! HHMMMMMMM..the filet was so tender you didn't even need a knife and I love Hot Hot sauce on it! πŸ™‚

  • salvadorveiga

    this thing is aweosome… i have been playing thsi the whole day… lol try playing the Canon C really hard…

  • Keirsten

    Yep, and here's the GS line in the sand on a horizontal R line today. So far it's stuck on stupid, but if that changes it could spell trouble for Bears.

    http://tinyurl.com/dzhxvk

  • lester

    I give up. I am just gonna hold my May 84 Puts until they go to zero. I was up some now down a lot. Dont send me any I told you so posts. I am just plain effed.

  • MayDaze

    Not sure if this has been mentioned yet, but I recall Berk's $VIX signals:

    “For a $VIX confirmed signal you need 3 things:
    1. a close outside of the 2.0 Bollinger Band (20 day, SMA
    2. a close back inside the 2.0 Bollinger Band – this issues the signal
    3. a higher close (sell) or lower close (buy) than the close of the day back inside the 2.0 Bollinger Band – this confirms the signal.
    Once you get those 3 things a major reversal usually occurs within the next week. The sell signals are far more accurate than the buy signals.”

    On Apr 9, $VIX closed outside its BB at 36.53, closed back inside the BB on Apr 13 at 37.81, Apr 14 at 37.67 (there are others), and finally closed on the 20th at 39.18 – fulfilling all the requirements (if I have it all right). So, down we go!

  • Matador11235

    Nice recovery on the zero screen shot Mole. Screen shot messed then fixed before I could post anything. You da man!

  • thunda72

    We're in trouble…. πŸ™ JK…. let's see what happens, although I'm not liking the action this afternoon.

  • http://tradingsigns.blogspot.com/ T. Waffle

    Yes sir. Short NQ @ 1356.25

  • Blind_Squirrel

    Nice Anna:

    While you were enjoying your filet perhaps with just one
    glass of vino, I was eating 2 pks. of Lance peanut butter honey
    crackers, little debbie raisin cream pies and a Pepsi!!!!!!

    Please tell me these were leftovers or I will just die that you cooked
    and traded at the same time!!!!!!!!

  • C.C. Rider

    The weekly VIX is calling for a big move down in short order. A break of 40 to the upside would break the down channel on a bullish wedge, possibly reaching old highs. Bollinger bands, MACD, and stochs are positioned accordingly. Bank stress tests, GM insolvency, what else would qualify as an “exogenous event”.

    C:Documents and SettingsChuck CrosleyMy Documents2009-04-22_1221.png

  • Squidman

    That was really weird–thought I had the blue screen of death for a minute.

  • thunda72

    YES!!! I'm soooooo psyched! I'm now a proud Zero subscriber. I'm really looking forward to using it Mole! Thanks for all your hard work, brother!

  • molecool

    N
    E
    W

    P O S T

  • ZigZag

    DIA daily channel..

    http://tinyurl.com/cxalqu

  • molecool

    Jeezes – you guys are sensitive!

  • TomOfTheNorth

    The President is speaking on wind energy and it occurred to me that if we could get portable turbines in front of all of the Administration's daily speechmakers, we could light NYC….

    such a wind!

  • annamall

    Thanks for the chart Birman girl!
    After today I can afford to buy one, unless I can find a rescue one that needs a wonderfully warm home!

  • molecool

    It has to be on consecutive days mate.

  • annamall

    That might not be a bad idea to regroup and be more cautious. Love that Apple now is down Played both sides!

  • molecool

    I didn't see that comment – please post chart in next thread.

  • http://tradingsigns.blogspot.com/ T. Waffle

    I wish every American can think like you. LOL

  • MyLifeMyTrade

    IMO we are about to fall off the cliff…

  • itsgold

    and there it is.

  • MayDaze

    My mistake, thanks for the correction.

  • lester

    You are correct. I am no longer sitting on hands.

  • gannsecret

    whats Chicken's Line of Intrigue

    ________________________________

  • Blind_Squirrel

    Lester:

    Are u long or short right now?

  • lester

    100 pct CASH

  • Fujisan

    Thanks, Tom. I ALWAYS check your comments, too!

  • lester

    You are correct. I am no longer sitting on hands.

  • gannsecret

    whats Chicken's Line of Intrigue

    ________________________________

  • Blind_Squirrel

    Lester:

    Are u long or short right now?

  • lester

    100 pct CASH

  • Fujisan

    Thanks, Tom. I ALWAYS check your comments, too!