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Curb Your Enthusiasm
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Curb Your Enthusiasm

by The MoleNovember 3, 2015

We’ve come quite a long way since the grizzles were ordering party hats and truck loads of Cristal in celebration of the impending August doom & gloom slide into the abyss. Since those lows we have regained some 270 juicy S&P handles and it looks like we’re ready to transition into the annual X-Mas bear hunting season. However, it’s my duty as the crusty bubble bursting host of this digital domain of trading doom to once again caution you to curb your damn enthusiasm.

2015-11-03_spoos_LT

Why you ask? For if we complete this week in the plus once again then I count six consecutive higher highs. And that means that probabilities start to lean toward a much less celebrated annual tradition: The pre-X-Mas-Rally-Shake-Out.

That’s right, before the boom usually comes the bust and I don’t think given the current formation on the weekly we’ll be advancing higher from here in one straight line. So prepare yourself for the invariable pig slaughter before we get to talk turkey. If it doesn’t start this week then most likely it’ll be the next.

As a matter of fact, we have an interesting situation here in that a down week by this Friday would actually increase the odds of more upside for the remainder of November. Therefore should we drop today and until Friday then I would be prepared to seek out dip buying opportunities. On the contrary if we continue higher this week then I’ll be looking for possible short entries the next. If you aren’t sufficiently confused by now then I just haven’t tried hard enough 😉

2015-11-03_CADCHF

On the setup side I’m keeping rather cautious these days. CAD/CHF is looking like a possible long on a drop lower. If that happens I’d take out 1/3R with a stop below 0.75.

2015-11-03_events

Speaking of forex – Draghi is dropping the mic ECB style later today. Be prepared for some obligatory swings in both directions. The cockroaches are already heading for the exits apparently as the EUR/USD is heading lower this morning.

A few more goodies below the fold:

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FWIW – I’d pay good money to see Draghi walk up, grab the mic, take a long look around and then shout ‘5% rate increase, bitches!’

draghi_drops_mike


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.
  • Bill

    Ha, mic drop.

  • Anthony Morrow

    think we might need a reboot on the zero?

  • http://evilspeculator.com molecool

    I’m on it.

  • RoastBeeph

    Anyone know when Draghi speaks?

  • evilasevildoes

    whoa look at that drop on zl is that right?

  • evilasevildoes

    holy moly

  • http://evilspeculator.com molecool
  • http://evilspeculator.com molecool

    Guys – look at the signal range – it’s tiny.

  • evilasevildoes

    was it rebooted?

  • Bill

    2PM EST

  • ridingwaves

    I’m thinking the mole turkey shakeout is next week…A VIX L play could be in play with the coppock curve (momo) nearly embedded in the candles after bottoming out week ago… see old comment in VIX discussion w/scott weeks ago.

  • evilasevildoes

    i think tomorrow i will watch my kitty who just made me rich lol must be a planetary thang

  • RoastBeeph

    So Drahi speaks at 1:30 PM EST today.

  • ridingwaves

    what is that cats name! Big daddy….

    more fodder for taxpayers…Mel Watt -owned by banks…I knew this corrupt corpocrat scum would need this when opening up credit tiers to more people whom don’t need a house

    http://www.marketwatch.com/story/fannie-freddie-may-need-to-tap-treasury-fhfa-director-says-2015-11-03?link=MW_home_latest_news

  • ridingwaves

    Scott’s recent op-ed take on stops to tight at the beginning and too loose at the end keeps hitting me in the face..I’m now making adjustments…

  • ridingwaves

    Kudra, where are you….I have trailing stop on GENE at 2.00

  • evilasevildoes

    tradertwat

  • evilasevildoes

    zl stopped

  • http://batman-news.com RacerXX

    something from those regions was hitting a couple of my sites pretty hard a few weeks back. Funny thing is there’s nothing to hack into.. but was interesting to observe. Block one set of IPs they’d come in on another.. etc etc.

  • kudra

    I’m here. Thnx again for your counsel.

  • RoastBeeph

    I am going short, a little div in last 15 minutes, arrows on ZL, and also just broke high from two fridays ago, expect some retracement here.

  • evilasevildoes

    thx
    higher highs higher lows simple until…………2490 spx lol

  • kudra

    looks like genetic testing back in spotlight. Nice 10% + move on GENE, but still a long way from BE for me.

  • ridingwaves

    volume is moving in, don’t think this is your big move yet and in fact could end up below 2.12 today
    play these 10% pops as chart starts to improve….2.60 is outlier move for now…

  • BobbyLow

    Happy noon time folks. Just another day in the hood. :)

    Still Long Crude from 10/28 and long GBP/JPY from yesterday. I’ve been trying to find other vehicles to trade that fit my style/system and I got nothing right now. But IMO it might be better to strive to being good at trading a two horse stable than to spread out and risk being shitty at trading a whole herd.

  • ridingwaves

    I was reading something somewhere about trading oil and a chart based just off inflation has oil at $65 in 2017
    but that would seem to also say deflation is dead jim….so far that has been illusion for the nutty central bankers

  • BobbyLow

    At one time, I use to think about longer term implications on the price of oil. Unfortunately this type of information would cloud my thinking on the shorter term. Even things like Weekly EIA reports mean nothing on the short term price of oil. For example, last week there was a piece about not having anymore room for oil at Cushing OK. Then the EIA Report came out with yet another build. But this build was smaller than expected so oil rallied. There might have been no place to put this small build in oil but it didn’t matter. Now if there had been a drawdown oil might have rallied and price would have been attributed to this. But it still would have been Bullshit.

    The only supply and demand that matters is the bid and ask for oil contracts in the Pits and which big players are long or short. End consumer demand takes a back seat.

    BTW, I just took a peek and apparently there’s stuff going on in Libya and Brazil all while another build in Cushing is expected tomorrow.
    I think that Bull Shit about Oil flows with a higher velocity than the actual Oil itself. :)

  • hellbent

    baaa :o)

  • hellbent

    That longer term thinking thing got me too Bobby. I spent a year or so on a project forecasting transport energy growth etc etc and the whole oil rout thing was not on my radar screen at all. Safe to say I caught every little reversal. Net result – not quite broke..

  • ridingwaves

    I’m not using it as a gauge to buy oil as what you touch on above is true…I found the argument weak based off deflation but never one to discount inflation making an appearance…the CB deflation experiment of beggar thy currency will one day play out and quite possibly hurt if not prepared for it…

  • RoastBeeph

    Crude oil trade is a hell of a trade so far. Too bad I didn’t pull the trigger.

  • Billabong

    I “think” the US public has been softened up on a ZRIP or NIRP possibility. Then there’s the calls in the last 2 days of an FOMC rate hike in the short end in Dec. All of this just messes with the publics mind and creates confusion…

  • http://greenlander1.blogspot.com/ Greenlander

    Impressive move. I gave up on this one a couple days ago thinking the easy money was over. I personally find oil tough to trade

  • Billabong

    For less MOMO have you thought about a 1:1 ETF? I did it with the PMs and it lowered the stress from increased volatility.

  • Billabong

    Did your system say buy? A missed system buy signal is a “mistake” trade for record keeping…

  • RoastBeeph

    I don’t follow Crude. I was just talking about Mole’s trade that he mentioned. I didn’t piggyback. :)

  • BobbyLow

    What the CB’s have done in order to save banks from the results of their reckless behavior has made the eventual price down the road worse than if they had just let the normal Boom Bust phenomena take it’s course.

    It also appears to me that the CB’s have been trying to inflate our way out of the mess that Bankers and Politicians created in the first place.

    But IMO, their fatal flaw in this attempt has been trying to force Cost Inflation without Wage Inflation. And this is not going to happen. At one time, I thought that these CB’s are smart and know what they are doing. Not anymore.

  • ridingwaves

    wage inflation with a global economy is a myth….the problem with our CB Sith overlords is they believe in absolutes…

  • BobbyLow

    That’s a good move. I’ve done this before by going with 1X USO/DNO instead of 2X UCO/SCO. However I’m still with the 2X and I just adjust my size to fit my current stress levels. :)

    But there is another part. As you know, ATR Multiples are a large part of my system. I had been trading off the daily for Crude but during extended directionless periods I could feel my stress levels increase as trades went on a long journey to nowhere. So what I did was change to a what seems like a much faster chart but really isn’t (30 Minute) but I increased ATR Multiple. The way my 30 Minute is set up it isn’t that much faster but allows me to get in or out as early as 9:30 AM as opposed to waiting to the Close. The downside is that it’s possible to pick up an occasional whipsaw yet I can still particpated in an extended Trend when they occur.

  • http://evilspeculator.com molecool

    You only have yourself to blame 😉

    J/K – if you don’t trade crude that’s fine. BTW, is there a particular reason?

  • RoastBeeph

    No particular reason. I am trying to get a handle on four instruments currently, just haven’t spent time studying CL so haven’t traded it yet. I am sure I will someday.

    I’m concentrating on ES, NQ, GC and DX right now.

  • OJuice

    This uptrend is relentless. Crashing upwards almost.

  • http://evilspeculator.com molecool

    You guys should be particularly careful when the Zero signal doesn’t even touch the blue line.

    .

  • http://evilspeculator.com molecool

    Crude is a large contract – you would require at least $100k in assets for even one contract (assuming proper position sizing) for most campaigns.

  • http://evilspeculator.com molecool

    Crude can be a dream and it can be a real pain in the ass. As of late it’s been in the latter category.

  • OJuice

    Meaning there is considerable buying interest?

  • http://greenlander1.blogspot.com/ Greenlander

    Yeh I’ve trimmed down my position sizes a lot and let it bounce around even though I might see a juicy setup.

  • newbfxtrader

    Usually best not to short while the zero above 0 and price above WVAP. Thats basically my long setup. The opposite would be a short setup.

  • Billabong

    I like it … a different way to look at it.

  • Scott Phillips

    I got it, but it’s been a bitch the last month

  • Billabong

    US Debt officially updated from mid-March, +351B (apprx +44B per mo) = 18,492,091,120,833.99 … Shouldn’t take too long to reach $20T.

  • Scott Phillips

    Just think about this. You loosen your stop just a few cents every time. Just one trade in 20 stays alive, that’s barely enough to register on your conscious radar.

    If your win rate is 50/50 and your average loss is .85R and your average win 1.1R this changes things from .125 expectancy to .22

  • Scott Phillips

    By definition large moves on all timeframes are the result of “surprise fuck you!” which catches everyone by “surprise fuck you!”

    So the only fundamentals that matter are ones you catch early enough that market participants have not become aware. They are not fundamentals but “surprise-a-mentals” (Seykota term)

    The nature of price discovery is neatly illustrated by the following series. What is the next letter in the series?

    O-T-T-F-F-S-S-?

    You can stare at this for a few minutes and think “I don’t fucking know, just tell me the fucking answer motherfucker”. And then all of a sudden you have an A-HA! moment (Seykota term).

    It is the tension that drives price discovery. At the moment market participants go “a-ha, NOW I understand what is happening…. the tension disappears and the trend is over”. NG, for example, the trend is intact because people still look at it as an attractive buy, value play. It’s not immediately clear why it’s been going down 10 years in a row.

  • Scott Phillips

    Stop doing this mate. You are just looking for an excuse to pick a top subconsiously.

    Work on your systems :)

  • Billabong

    OT. I just received a call from a friend who does freelance work for National Geographic. They said that Fox (who bought NG out about a month ago) gave pink slips to just about everyone at NG this evening. This is a great example of monetizing everything. Fox is probably after the archive content. Another American icon destroyed…

  • wandering196

    Makes me sad NG was such a big part of my earlier life, my fathers and my kids even looked at the magazines because I had them around. At one time a form of travel. My daughter even said her dream job was a NG photographer.

  • hellbent

    Two ah-ha’s there. Tension does make sense.

  • RoastBeeph

    That is such depressing news. National Geographic is an icon. Just gross that they are gone now (seemingly).

  • BKXtoZERO

    I’ll take O for 100

  • Scott Phillips

    *sigh* – read it again please

    O-T-T-F-F-S-S-?

  • Kevin Mcdonald

    there doesn’t seem to be any consequences in the short term at least… might as well be 24 trillion.. what difference does it make?

    There is no difference between 18.5 or 24 at this point… so they might as well just print away!

  • kim

    Got this long setup with AUDNZD. Can someone explain the logic behind those spikes down – in circles… I have my own opinion about it but would like to hear some? I’ve got into first trade at the bottom but that first spike down triggered my SL – just touch it and then up :)

  • Scott Phillips

    The spikes down are part of a high probability setup, where you get a convincing top picking opportunity which actually starts working, suckers idiots in, then reverses, forcing them to cover, fuelling the next leg up.

    Gabriel Grammatidis has a system called “busted breakout” (google it) based on this. Mole and I developed Heisenberg (now on the back burner) based on this concept.

    Bottom line – A long AFTER a failed top picking opportunity is a great place to get positioned

  • evilasevildoes

    I became a Geographer due To NG and saw the world through their wonderful photographs..Grovenor is turning in his grave, Fox wants to control misinformation..th eGlobal Warming Scam will be pounded in to the numbskulls who know zero science

  • Billabong

    And there the markets go this morning … up, up and away pre-NY open. Added bonus; DX looks like it’ll give me a buy signal this morning.

  • kim

    Mole, I guess we can confirm this line now?

  • OJuice

    After hours consolidation on ES looking like a set-up for more upside this morning.

  • http://evilspeculator.com molecool

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  • http://evilspeculator.com molecool

    I wish there wasn’t so much air between the first pair and the last one. The current one is not a touch yet as it hasn’t bounced here. But it may be in a few days. But yes it’s worth considering – better if you have more (non correlated) context.

  • Huey

    E!

  • ridingwaves

    I agree with you all…Kon Tiki today is a winged suit…going to miss NG

  • kim

    Well, it didn’t bounce :) case closed i guess.