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Don’t Get Too Comfortable
51

Don’t Get Too Comfortable

by The MoleMay 2, 2017

Last week’s gap upwards has left market participants catching their breath and looking for a sign of future direction. As we are near all time highs there isn’t much technical context to hang our hats on, and until new context is established everyone is kind of stuck in limbo. Of course withholding new context by keeping the tape inside a narrow range is a great opportunity for market makers to make some easy money by bitch slapping over eager participants around a bit.

Some Tape Reading

Think about the sentiment in both camps. The gap has most likely led to a capitulation of a lot of bears who either have already bought or are looking for a decent dip to buy into. There aren’t many of them left but it would aid the bull’s efforts to hold the fort up here above ES 2320. There are probably some very aggressive bears who are looking at this little island near the ATHs and are willing to plunk a few bucks into some lottery tickets, perhaps a handful of puts at least. On the bullish side many probably took some money off the table right after or during the gap and, since having done, that are unwilling to buy back in right now without a decent dip.

So in summary quite a few bulls and bears are now waiting for a dip mixed in with a small minority of hardcore bears willing to be short near all time highs.

2017-05-02_volatilty

I wish I could tell you which way it’ll resolve but since I don’t have a crystal ball all I can offer are probabilities based on technical evidence. And they are around 50/50 right now with the bulls enjoying home-field advantage (just watch the NQ) . What I can tell you however is that a final resolution is most likely not too far off based on what I’m seeing on my (realized) volatility charts. We have now been enjoying over six months of fairly low RV but note that the Bollinger bubble is already starting to expand.

By the way don’t think that big waves never happen during summer. This ain’t surfing and if you recall we got quite a bit of chop last May and June followed by a nasty wipe out (blue arrow in the center of the chart). So don’t get too comfortable now and be prepared for an increase in volatility. Which of course comes with juicy trading opportunities if we play our cards right. And we always aim to do just that.

Campaign Updates

2017-05-02_EURUSD_update

EUR/USD hasn’t budged an inch or even a centimeter and as I’m still holding long there’s nothing to be done here until either my stop gets knocked out or we blast through 1.0950. Fortunately I somehow win either way 

2017-05-02_soybeans_update

Soybeans finally got out of the gate and I’m rather pleased with myself as almost a week of patience finally got rewarded. Stop now goes a few ticks above break even < 964.

2017-05-02_bonds_update

Bonds unfortunately expired overnight and the diagnosis points toward sudden death by stop syndrome. This is actually quite interesting given where we are on the daily panel. It’s possible that we’ll see some more whipsaw here in the coming weeks but the odds still support a final resolution higher. If we do remain down here for much longer then that BB is just going to keep coiling up tighter and tighter. Rest assured that I’ll keep a very close eye on this one.

2017-05-02_copper_update

Copper also finally taking off – seems like the snail strapped on some roller-skates. Quite a bit of profit taking there though and I’m now moving my stop to break/even as further downside from here would invalidate the potential of a timely resolution within my trading window.

That’s all for now – no new setups for today. Let’s see how this all plays out.


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.
  • OJuice
  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Bitcoin $1450?
    what the hell am I doing watching ETF’s? !@#$
    (rhetorical)

  • Tomcat

    a market of virtual currency couple with the big behemoths (i.e. FB, GOOGL, NETFLIX, AMZN) all in the virtual world. What does that tell you about our reality?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I should have taken the Blue Pill.

    Ignorance, is Bliss

    https://watchingadams.files.wordpress.com/2016/05/cyphersteak1.jpg?w=640

  • Tomcat

    What happened to participation???

  • BTrader

    Flat lining ahead of Fed and Apple…..

  • Tomcat

    Long $CL here.

  • http://evilspeculator.com Sir Mole III

    I guess everyone went away in May! But seriously this is not unusual especially ahead of big moves. For some reason retail walks away when things get the most interesting and then returns to talk about what happened after the fact. I’ve tied to rewire everyone for several years now but apparently to no avail.

  • BTrader

    Totally right! The trigger on ES to me is 2391 and 2377 now.

  • evilasevildoes

    cl only retrace a bit then 45, 78 play aug short dec long to be safe

  • evilasevildoes

    funny how that works

  • evilasevildoes

    Italy banks needs some euros so selling lybian crude to the guy who has always wanted it…wanna bet?

  • evilasevildoes

    lol watch Etherium…Indiand jumping out of rupe

  • evilasevildoes

    we in a matrix

  • http://evilspeculator.com Sir Mole III
  • http://evilspeculator.com Sir Mole III

    Isn’t everyone in Europe buying from ISIS at the cheap these days?

  • http://evilspeculator.com Sir Mole III

    I’m telling you – it rarely fails.

  • http://evilspeculator.com Sir Mole III

    I still have some BC in some old account – bought it at $300 – what the fuck am i doing trading forex and futures??

  • http://evilspeculator.com Sir Mole III

    One of my favorite scenes actually. I want to remember nothing – NOTHING!!

    https://www.youtube.com/watch?v=Z7BuQFUhsRM

  • Tomcat

    time for reflecting and meditation then?

  • http://evilspeculator.com Sir Mole III

    Time to pay attention.

  • Tomcat

    that requires presence and alertness even if its virtual

  • Ronebadger

    One day, the paint will be done drying…

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Don’t forget, AAPL after close.

    http://orig13.deviantart.net/5f3a/f/2013/252/f/3/snow_white___poisoned_apple_by_vaxzone-d6ln650.jpg

    time to listen to some Rammstein. {GG wanders off}

  • Darkthirty

    NICE PEACHES !

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Forget it. She’s a DUST addict.
    😉

  • Darkthirty

    wasn’t gonna bring her home…

  • http://evilspeculator.com Sir Mole III
  • http://evilspeculator.com Sir Mole III

    Have you seen this one? They working on a new album – its been fucking eight years!!!

    https://www.youtube.com/watch?v=vqnk9HWbKRA

  • Darkthirty

    geritol tour?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    good to know. Unfortunately, my employer has this video locked down.
    Have to go home to watch it.
    These dudes are getting old, but then so is everybody!

  • http://evilspeculator.com Sir Mole III

    Eh – they’re just getting better – got at least another 10 years of shenanigans in them 😉

  • http://evilspeculator.com Sir Mole III

    Jeezz, you fuckers are making me feel old.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    {Evil Grin}

    “Apple hit an all-time high before posting earnings that disappointed Wall Street.

    The company’s stock was down about 1.5 percent after its quarterly revenue did not hit projections. The company posted $52.9 billion in revenue, versus the Thomson Reuters consensus estimate of $53.02 billion. Earns per share were higher than expected at $2.10, compared to $2.02. Its market cap slipped to $765 billion during after hours trading due to the poor results.” – CNBC

  • Darkthirty

    I might be older than you…….

  • Darkthirty

    Off 2.53 AH

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    We’re young at heart :-)

  • Darkthirty

    One stawk index?

  • Darkthirty

    Really looking forward to see what’s on the other side!

  • http://www.captainboom.com/ captainboom

    All the current evidence points to absolutely nothing ‘on the other side’.

  • Darkthirty

    I’ve had enough experiences to believe the opposite. I’ll let you know……

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

    Really looks like not enough energy to break above daily consolidation zone w SPY/ IWM unlike post-Brexit, election, Feb. I’m trimming back longs and probs will lie low for a few wks or mo. until we get a decent pullback.

  • http://www.captainboom.com/ captainboom

    Say ‘Hello’ to Houdini for me.

  • Darkthirty

    I don’t anticipate a warehouse of physical beings….but I know nothing for certain

  • bravenewworld2011

    VXX float hit 95% short yesterday! Warning to anyone trading vol.

  • http://evilspeculator.com Sir Mole III

    Working on a big post – need a bit more time 😉

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Beeile dich

  • Darkthirty

    Loading the bear bus? https://finance.yahoo.com/news/three-peaks-and-a-domed-house-top-in-play-again-215311739.html Where’s the glory hole? This “market” is bulimic…..

  • http://evilspeculator.com Sir Mole III

    Hat länger gedauert…

  • http://evilspeculator.com Sir Mole III