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Dropping Da Bomb!
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Dropping Da Bomb!

by The MoleNovember 26, 2012

To the few of you who actually bothered to show up for work today: You are about to get rewarded as I simply cannot believe the plethora of high quality setups I’m coming across today. I could literally post dozens of charts here but we’ll keep it limited to our usual healthy diet comprised of our four major food groups.

Before I drop the proverbial setup motherlode let’s however catch up with what’s going on in equities. I’ll be dropping you at 60,000 feet from which we’ll free fall into our first setup of the day, the E-Mini:

Our SPX point and figure chart flagged us a low pole reversal warning on Friday. This means the bearish case is now officially on notice. This is perfect as it correlates very nicely with an inflection point play I’m seeing across the board:

The weekly E-Mini panel has us at the 25-week SMA. So the question from a more long term perspective is whether or not this is a reversal of the weekly sell signal or a last kiss goodbye (LKGB).

The daily (and hourly) panel provide us with a few more clues. As you can see the daily spoos painted an outside period on Friday which apparently will be followed up by an inside day today. And all of that is happening right at the 100-day SMA. How perfect is that? This is conclusive evidence that we are at an inflection point that separates us from the annual bear hunting season scheduled for December.

On the hourly panel we are currently near the 25-hour SMA – you can use that if you are fishing for early entries.

Now here’s our first setup. As I already suggested the daily currently dons an OP followed by an ID. Thus I am happy to take a breach tomorrow (i.e. tonight) in either direction. Bear in mind that the trigger line may have changed by the time you read this. If you don’t know how to trade an inside day setup then please consult our handy cheat sheet.

Alright, I suggest you brace yourself for this browser busting setup mega-bomb – the Mole has gone nuclear!
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More charts and non-biased 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 or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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Let’s start with currencies. The USD/CHF is painting a delicious ID + NR4 combination. I only want to be long here tomorrow (or overnight) if we breach the upper trigger.

NZD/USD – inside day after a long candle up. Here I favor the downside although I would consider a small long.

GBP/USD a.k.a. cable – almost identical setup and thus we play the same game.

But wait there is more! EUR/USD – same setup!

Not to be outdone the EUR/AUD is now donning a dual inside day. I would consider it my patriotic duty (I’m also European) to take either direction here once we get a breach.

And even the AUD/USD got the memo – inside day + NR4 – you know what to do.

And ole’ bucky doesn’t want to be left out – also an inside day. We are near 1.3 and I fear my exchange rate may flush down the toilet. In terms of the setup I would prefer a long breach here but as I always say, never underestimate suicidal tendencies in the Dollar pit. Two reasons to hope for a bounce then.

Commodities – we have soybeans right at the 25-hour SMA – very nice long setup but it’s only a short term trade (for now). This could be a nice way to hitch a ride off a floor pattern so let’s look at it tomorrow and then decide.

Bonds – possible last kiss goodbye here. I am currently short with a sto above the 25-hour SMA. Willing to be long if she pushes back above the 100-hour SMA.

Silver – another short term setup. I want to be long here with a stop below the 25-hour.

Gold – almost a perfect OP/ID setup – will take either direction here. If both silver and gold are pushing higher then we could witness a medieval style bear squeeze slaughter fest. But again – I’m ambivalent on both – gold however is the one I trade both up or down.

Now for something completely different. Sugar is looking sweet again – possible floor pattern and I want to be long here near the diagonal. Well, I admit it’s a speculative trade so only get exposed with a handful of contracts.

Nutty gas – as you already know I’m long here with a stop below the Bollinger. But I just realized that this just happens to be below the daily NLSL  – how perfect is that?

Copper – long here if it heaves itself over the 100-day SMA.

You’re into something exotic today? Here’s cotton with an interesting OP/ID configuration.

The reason I’d consider it despite the long ID candle is because of the context. Actually my preference would be a drop below. So if you are a cheeky steel rat you may find an early entry near the upper 100-hour BB, which also happens to be right at the 100-day SMA. How perfect is that? (today’s tag line I guess)

Let’s wrap it up with crude – OP followed by an ID. Crude has been a bit of a mess lately but I’ll take the setup because the doctor ordered it. One of these days it’ll finally pick a direction  In general (considering the LT picture) I would prefer a short entry here. If you recall my recent LT update then you know why 😉

Keep it frosty and don’t get overexposed. Treat it like hor d’oeuvres – take little bites off your favorites and you should be okay. Be disciplined with your stops – and make sure you get a decent entry near the trigger lines. If need be set yourself alerts, there are a ton of pertinent services out there. TOS also has them for free.

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Cheers,


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.
  • Rightside_ot_trade

    Setup nirvana has been achieved

  • http://profile.yahoo.com/ZSFIZYIMIRUV3BUXT77JQOHQII greg4

    NG below 3.74.  Selling calls on this dog.

  • http://evilspeculator.com molecool

    Indeed! I really wonder where everyone is today. Boy are we going to rub it in 😉

  • AMCabrera

    Thank you very much MOLE!

  • vladv

    lot of charts……..wow

  • http://dartht.blogspot.com/ Darth_Gerb

    test test. is this thing on?
    Advancers…..again.
    http://stockcharts.com/h-sc/ui?s=$NYUPV:$NYDNV&p=D&b=5&g=0&id=p56955110016

  • AMCabrera

    oooh but Im quietly sitting here taking everything in mole.

  • Ivan

    Hi guyz … talk about the quite before the storm in the EurUsd

  • Ivan

    And so it came to pass … 20+ pip gap up in the EurUsd with IB … a real trap for young players (and perhaps for the more mature as well)

  • http://evilspeculator.com molecool

    Oh – we were on it 😉

  • Ivan

    The  ‘nice’ part was that my setups were already long at the time of my first comment.

  • http://evilspeculator.com molecool

    I need to start charging in Euros now – living over here is getting expensive.

  • Ivan

    Spend less solves that one!

  • http://evilspeculator.com molecool

    Now let me by philosophical for a moment: What always surprises me the most is how much time and energy the average Joe/Jane spends every day on trivia and American Idle, Honey Boo Boo, Justin Beaver, etc. Meanwhile the purchasing power of their very currency is systematically being destroyed, day after day, week after week, year after year. Did you hear about that during the presidential election season?

    I guess ignorance is bliss – until folks can’t afford to feed their family.

  • http://evilspeculator.com molecool

    Nah – I just earn more 😛

  • http://evilspeculator.com molecool

    Not active today?

  • Ivan

    Cool-aid culture or the frog in the warm water in the pot.

  • http://evilspeculator.com molecool

    One of the reasons I moved I guess. But frankly it’s not too different over here in Spain. People are a bit more engaged but they are as helpless. In the end the system controls all of us.

  • http://evilspeculator.com molecool

    Alright, I’m turning in. Hope to see a few more faces tomorrow!!

  • Kudos

    Reading Atlas Shrugged right now, your post could be taken straight out of it.

  • http://dartht.blogspot.com/ Darth_Gerb
  • AMCabrera

    nien Kaiser Im active I have rid myself from last nights short in the aud/jpy to help the old short from friday that I took at  85.90 I have went short NZD/USD UND added gbp/chf longs.

  • AMCabrera

     goodnight love you.

  • Ivan

    In the same vein … how many have seen this picture?
    With apologies to the source unknown.

  • AMCabrera

    http://vimeo.com/17164978
    going long usd/sek. I’ve been waiting a long time for this one and that last pop lower was exactly what I was waiting for all day. My cat told me to wait. oh and setting stop watch to see how fast 6.7100 is reached.

  • Th3_Acist

    Two words…Public School, few break free. Even fewer think for themselves.

  • itcomesupinwaves

     big increase on $BPGDM as well

  • Th3_Acist

    http://www.youtube.com/watch?feature=player_embedded&v=GTQnarzmTOc#!

    Figured you guys would appreciate this, part one is also amazing…if you like this kinda stuff :-)

  • newbfxtrader
  • AMCabrera

    http://www.youtube.com/watch?v=AI0gk2KJeho
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/d8c857f4-fc61-4814-a740-bdf8acd1fe0e/2012-11-26_1853.png
    http://content.screencast.com/users/AMCabrera/folders/Jing/media/e4482496-be1f-4aca-a620-46d57289022d/2012-11-26_1856.png
    http://www.youtube.com/watch?v=1jre6_FBBc0&feature=related
    Let it be known this is my main focus AUD/JPY I will continue shelling if it gets near 86.30 again. For now I continue holding my 85.90 position. The NZD/USD, GBP/CHF, USD/SEK only make up one lot together and I will pull the USD/SEK if it does not improve shortly. WHICH brings me to my next subject. SPX that high risk trading instrument ;). R nightie night is forming. This rap video for some reason reminds me of dungeon masters, bloomberg, cnbc, and the house of ill repute..Dont let them make you dance..Shot em dead.

  • ridingwaves

    One word….Sheeple…herding is easy….

  • http://dartht.blogspot.com/ Darth_Gerb

    shelling, Hmmm reminds me of a video.
    don’t lose a leg.
    http://www.youtube.com/watch?v=Hi0wSeBvfo0

  • AMCabrera

    Taking out short order that was at 86.30 it was missed. If it hits again mmmm I may not want to be in the way.

  • AMCabrera

    PUlling usd/sek (long) my cat was right. Now I will go short at 86.30 if that is reached OR enter again at 85.90.

  • AMCabrera
  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

    I m long euro 1.2948 and 1.2935. Most sellers sell on 6th day up. Will be interesting if its still an up day today but will flip to short if 1.293 breaks.

  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

    Those at 35 r out. Those at 48 @ near breakeven stops. Its frustrating sometimes to keep taking profits of 15-25 pips, but am sticking to my rulebook – take profits when RSI 5m hits past 70-80.

  • http://ibergamot.blogspot.com/ iBergamot

    With seemingly unending sell-off in ag commodities, one has to wonder if food bull market is over.  My personal opinion is biased – I think we will never pay low prices for food again, however it may be because of retail mark-up and fuel prices. Case in point – look at coffee. Never mind that its been going down for 2 years, retail coffee is more expensive than ever.
    That aside here is JJG (all grain etf). Look at volume difference in beginning of 2011 and now. This makes the “money hair” on my back go wu-wu-wu

  • http://evilspeculator.com molecool

    Well, distribution costs are quite a bit higher as well but point taken. The problem is consumer habits. As long as idiots are willing to pay $4 for a cup of hot roasted bean water they’ll continue to charge it. Consumers hold the ultimate power of the wallet. When they decide that coffee is overpriced then prices will adjust. You can’t blame the merchants for overcharging if they get away with it. Besides idiocy must be punished 😉

    Here in Spain a good cup of ‘café con leche’ costs me about €1.60 – roughly 2 bucks. Oh yeah, and it’s being served in a stylish porcelain cup with a saucer and a metal spoon (all that has to be washed – often by hand).  And that is in the tourist area of Valencia. If you go outside of town you probably get it for a Euro. The guys who know me usually throw in one of those mini croissants. Given that and the great ambiance I’m enjoying while sipping it I consider it a decent deal. But heck, I’m really stingy! LOL

    And I almost forgot – Spaniards do not tip. That saves me another 15% to 20% on all my culinary expenses :-)

  • http://ibergamot.blogspot.com/ iBergamot

     One day I will come to Spain, just to see it ALL myself

  • AMCabrera

    cafe con leche. Yup I have one myself everyday a shot of espresso with warm milk. 

  • Schwerepunkt

    Aren’t you an Earl Gray man? 

  • http://ibergamot.blogspot.com/ iBergamot

     Shh.
    It’s a secret

  • http://twitter.com/BunDanceKid Bun Dance Kid

    I confess, I still don’t get how to trade the ID. I see the cheat sheet says: …go long on a breach of the inside candle’s
    high with a stop set slightly below the inside candle’s low…

    but when I look at chart action it seems I could easily get whipsawed.

    Maybe someone could take me through the actual numbers on a current or recent setup. Cos I feel i’m really missing out on sth important by not knowing how to use this. Thanks

  • http://evilspeculator.com molecool

    Yes, it’s easy to get whipsawed. Sometimes it takes a few attempts. Did you get the email I sent out this morning?

  • http://evilspeculator.com molecool

    Assuming of course you’re a sub 😉

  • Ivan

    Greetings  there … it is important to note that not all Inside Periods, or ID’s as you call them, are not created equal … the context and the form of the actual IP/ID makes a great difference as to the probability of getting whipsawed.

  • http://twitter.com/BunDanceKid Bun Dance Kid

    I did. That was what prompted my Q

  • Schwerepunkt

    Doesn’t EVERYBODY know Bergamot IS the flavouring in Earl Grey (or Gray)?

  • http://twitter.com/BunDanceKid Bun Dance Kid

    So the approach is to simply enter on breach, set stop, exit if hit, re-enter on breach, set stop… repeat…?

  • http://evilspeculator.com molecool

    That’s what I do in principle. But since you did not respond to my question I take you are not a sub. If you were then you would have been aware of the context I provided as an example this morning via an email. That should have addressed your question in part – as in: yes, there are always other factors that play in. As Ivan pointed out – the context matters. As to assessing probability – if you ask ten people you’ll get ten answers, so personally do not waste my time with that. I go long on a breach, basta.  There are exceptions of course and usually I mention them in my posts.

  • Schwerepunkt

    So, the weak-kneed Europeans caved-in to Greek blackmail?  Angela got wobbly and Hollande found his Mojo. Baklava for everyone . . . 

  • AMCabrera

    pulling gbp/chf longs. 

  • http://twitter.com/BunDanceKid Bun Dance Kid

    Thanks Mole. You missed my reply confirming I am indeed a sub :-)

  • MrMargin

    http://youtu.be/RcZn2-bGXqQ

    Ironically, she used that song in her election campaign. But since her average voter is about 120 year old and doesn’t understand English, it didn’t matter.

  • http://twitter.com/BunDanceKid Bun Dance Kid

    Got it – so some degree of interpretation is needed rather than simply working off those breaches alone. Merci

  • AMCabrera

    anyone, usd/jpy? I like the 4hr 25ma. Maybe short.

  • ronebadger

    No tipping?!?!?!   I’m on the next flight out…

  • 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„¸

  • http://evilspeculator.com molecool