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End Of Summer MOMO Update
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End Of Summer MOMO Update

by The MoleSeptember 6, 2017

Labor Day is behind us which pretty much marks the end of the summer season and, fortunately for us, the time when many traders and investors return from hibernation. Even here at the evil lair I’m seeing a distinct uptick in new subscriptions after Labor Day and fortunately many of them happen to be familiar faces. Welcome back!

If you haven’t been here for a few months then you may be happy to learn that the Mole has been working his butt off all summer and will be introducing new exciting additions to Evil Speculator over the coming weeks and months. But now, as promised yesterday, it is again time to take another gander at the market momo and volatility front.

2017-09-06_NYA50R_NYA200R

Let’s kick things off with market breadth expressed here by the ratio between NYSE stocks trading > their 50 SMA vs the ones trading > their 200 SMA. I’m sure you’re getting the general idea here which revolves around the underlying health of a market. Are indices mainly advancing courtesy of a small number of strong leaders or does the entire market exhibit strength (or weakness)?

As you can see the signal gyrates around quite a bit and it actually took me a while to figure out the proper thresholds which seemed to have meaning. What I settled on in the end were the 1.0 and 0.7 threshold – the rules are explained on the chart so I won’t be regurgitating them again.

What’s a bit puzzling to me right now is that the signal did actually not drop below the 0.7 threshold during last month’s lows. Which means that we didn’t get a true buy signal here on the recovery higher and that in turn leaves a small chance that we are still actually in a larger long term correction. The only thing that disqualifies that scenario would be a) a push to new all time highs or b) a push > the 1.0 threshold on the chart above.

2017-09-06_SPXA50_SPXA200

The SPXA50:SPXA200 ratio is obviously related to the previous chart but only factors in S&P 500 stocks. Frankly this is the most bearish momo chart I came across and as it’s not confirmed by any others just yet I’m going to withhold judgment. However should the SPX experience renewed weakness then this is may be a chart to watch, especially if the signal drops through the 0.65 mark again, which could lead us lower. But for now I’m taking it with a few grains of salt.

There’s another aspect to the current formation. Some of you may remember this chart from before and I have often used it as a handy prop when trying to show how ruthlessly efficient the relentless bull market between 2013 and 2014 advanced higher without ever triggering the upper threshold. So this bodes the question as to whether we may be inside yet another effervescent phase of this never ending generational bull market. Hey, if the bulls make it to 15 years then it’s officially one generation if I’m not mistaken.

2017-09-06_CPCE_deluxe2

The CPCE is issued by the CBOE and refers to the ratio of put and call options in their exchange. The way I’m using it is a bit unorthodox but it has worked pretty well for us over the years, especially when it comes to long reversals. Once again I’ve got a bit of a head scratcher here as it recently pushed > the upper 1.0 (bearish) threshold (by a mere hair) and then dropped back down immediately. I guess technically speaking that is a bearish reversal signal but let’s keep in mind that even the real confirmed ones have not worked that well in recent history.

2017-09-06_CPCE

On the long side however we seem to have ourselves a pretty nifty long signal here. That push > the lower Bollinger was the right moment to be long. Which of course is what we did if you recall.

Well, I’d love to give it all away but those servers and lap dances don’t pay for themselves. If you’re not a member then sign up right now as you definitely don’t want to miss out on my volatility charts!

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

    Obligatory tune but I couldn’t find a way to embed it into the post (no YT video):

    http://uploadstars.com/video/YX8AW27OOBS9

  • HD

    Nice write up, as usual. Liking the high falutin charts too.

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

    puzzling can be good. Especially when you learn from it.

    Watch the USD ratz, could be a skinny dip in the near future.

    https://uploads.disquscdn.com/images/2b995fa8e4ef4d7f38e63c769289b8e653fa18fd36db25dc9f01ce24c75a6be4.png

  • Mark Shinnick

    XX Miners are just beginning to press out of their contracted range noise since 2015. Breakout is becoming credible.

  • Mark Shinnick

    Re: “a bit puzzling..” Yeah..his stuff will always be something of a moving target.

  • ridingwaves

    dipped there below 92….I think ole bucky goes lower….too many external pressures pushing it down…

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

    one thing I want to mention.
    that lower band on the chart is not indestructible, just a recommendation of safety.

    *IF* the band is crossed, it will become overhead resistance! 😯

  • Julie

    SPX Looking to short with a bearish close on the 60 min chart below the 60 min 8 ema approx. 2462.19. Hit the 61.8% retracement
    JULIE

  • HD

    pretty cheap short here against HOD. Are we setting up another OPEX pattern. Been very consistent this year IMO.

  • Julie

    HD The hourly 8 ema has worked great for me as a filter SPX
    JULIE

  • Øyvind Nyhammer

    For months: Dow compressing against 22000, NDX against 6000, SPX against 2500. When these barriers break then shorts will be killed. This is coiling for upwards move.

  • Julie

    RW EXAS breakout above 42 today weak volume ….. Do you still have a position and your thoughts ….. Thanks
    JULIE

  • Mark Shinnick

    Its not really possible to know the direction, but the coiling argument serves notice of pending strong motion.

  • Øyvind Nyhammer

    You know my position, what is yours ?

  • Mark Shinnick

    Ive been variously short these past few days. Should the short energy exhaust itself I believe odds then favor your position. To that end, the fact that miners are correcting could be a harbinger all clear for equities.

  • Øyvind Nyhammer

    Short a few days sound like a loss, I understand you say that if markets go up you are wrong-footed ?

  • Mark Shinnick

    My records show “short” entries via SDOW, SDS, and FAZ Sep 1 and exit yesterday. Normally I would never be short at a time like this, which presently favors your position.

  • HD

    Sept low is my $0.02

  • Øyvind Nyhammer

    You have a lot of opinions about positions, calling them beforehand and not afterwards will always increase your credibility.
    Use The Mole as an example: what do you invest in and where are your targets and stops.

  • Mark Shinnick

    Much of this in the nature of the tools and time frame. Like yourself, many of the participants here go by longer term time frames that I’ve observed has made my own positioning updating not as valuable.

  • Øyvind Nyhammer

    Good luck on your trading my friend :)

  • Mark Shinnick

    yes…only a “line”

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

    good to see some lengthy dialog.
    I would agree with you, shocking as that may be.

    scenario – The dollar falls precipitously.

  • Mark Shinnick

    You might take note of something we collectively term a volume hole, representing a frequently observed price gapping through those areas. There happens to be one just above the present S&P.

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

    SLV, all out. $16.90

    https://uploads.disquscdn.com/images/261a033ee6883af09640afdaf8544d2d9fd935f7c9990d239ac42bc14a98a09c.png

    I didn’t catch the July bottom, but I did catch the May. 😉
    -Whale Gerb

  • Mark Shinnick

    A truly fascinating scenario where all out slv.

  • Grant
  • Grant
  • Julie

    F approaching my 11.65 target. Resistance also 11.56. Now a negative divergence 60 min MACD 5,34,5
    JULIE

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

    Ford? wow, how long ago was that?…a Month.
    http://stockcharts.com/h-sc/ui?s=F&p=D&yr=0&mn=6&dy=0&id=p77053649100

    looks like a range trade for now.
    long or short sweetie?
    😉

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

    Grant, did your position stay intact on Tues? I was long the previous week and got stopped out but re-entered 1/2 size today.

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

    Took DUST and $gld puts today for basically same reason you exited SLV

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

    A lot of fear right now due to NK + seasonality which could be a good tailwind

  • Grant

    No, I did not move my ISL to a trail until EOD yesterday. Even my trail would have not been hit, and this is a cash trade so no need to get nervous and too tight with the stop.

  • Julie

    HI GG I want to short F ….. Your charts are great as they corroborate mine Thanks !
    JULIE https://uploads.disquscdn.com/images/8199b917eb6a8a75391ed6aaf5b682950c89ab75e7e0245e832c28bef84c2ed8.jpg

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

    USD also firming in a potential bear trap zone

  • Mark Shinnick

    NK game: keep the population willingness to die for the regime under absolute control.

  • Øyvind Nyhammer

    Funds seem to flow back into US equities markets from international investors and USD Seems to be positively correlated with indexes lately, so I would not necessarily agree about a weaker dollar. By owning US indexes and living in another country I do indirectly invest in the dollar, so I may be tilted in my opinion about that one.

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

    yeah, great minds…

    let’s hope we’re on the Smart side!

    https://pics.me.me/great-minds-think-alike-unfortunately-so-do-stupid-ones-24380760.png

  • ridingwaves

    the dollar could drop to 86 as easily as move higher to 96
    I don’t see 96 happening with debt ceiling, fed rate decision, that is leaning to punt until december plus the 2 epic disasters about to now be in play..

  • ridingwaves

    still enjoying it as I have also enjoyed the IBB and XBI love fest……its been great…
    no pun to Tony the Tiger

  • Julie

    RW I missed the oversold bounce off the 55 ema approx. 36, 55 ema and lower trend line of a falling wedge …. upper cloud boundary .. Made to order and I missed it and I was watching it too LOL !
    JULIE

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

    Yeah, ended up getting short again.

  • ridingwaves
  • ridingwaves

    went short…pray for me

  • Mark Shinnick

    Yeah, faz from yesterday ;/

  • StockTalker

    Thanks, need all the help I can get:)

  • http://evilspeculator.com Sir Mole III

    Hey guys – unfortunately I wasn’t able to put a post together today as I was putting the finishing touches on the Statistics project. Will report on that today or tomorrow after I fix a few more cosmetics.

  • Mark Shinnick

    Primary research rules.

  • http://evilspeculator.com Sir Mole III

    I don’t have valid statistical data on volume holes – I have traded them discretionary for a long time and my subjective memory tells me that they affect support/resistance ranges in a majority of the cases (e.g. 70% plus). However it would make sense to actually collect some stats on that. Would be an extensive project on its own however – would have to think about it.

  • http://evilspeculator.com Sir Mole III

    Oh – you will love this 😉

  • ridingwaves

    XLF lost the 100 and 200 is coming up….auctions this AM might be catalyst with dollar down…

  • ridingwaves

    no big deal, sometimes it’s easier staying on the same page a couple days…

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

    I agree in principle. I’ve got my eyes on selling a little pop up to 2480ish, if the stars align.

  • Mark Shinnick

    Half the population wired or culturally influenced for entitlement.

  • Mark Shinnick

    Jeezz, long vol…

  • ridingwaves

    what is price point of the 200sma on XLF? I have 2 different numbers from 2 feeds…23.99 or 23.89

  • Mark Shinnick

    23.98

  • Mark Shinnick

    ….but looks like xlf measures to 23.27 zone.

  • ridingwaves

    thanks

  • ridingwaves

    I think we might see 2500 this month…the fed is going to punt….especially if IRMA hits Florida…..they will word is as a temporary unexpected hit to GDP and labor due to widespread damage caused in 2 regions led us to hold off raising rates until next meeting…blah blah blah

  • OJuice

    I’m still holding on to my dream of retesting the bottom of the range from May. i.e. a little head dip under 2400. $SPX has made a H&S pattern since then. A false break of the neck line and a strong reversal always provides a good launch and I think we need something special to breach 2500 meaningfully. This is all BS musing really though. I just want sell signals at the top of this range and buy signals from lower ;0)

  • ridingwaves

    musing is fun though :)

  • StockTalker

    Bigger move coming, /NQ blowing off.

  • Mark Shinnick

    standing aside all this stuff for time being.

  • HD

    These moves are all the same. Pre programmed. Prices are set and they don’t really hide it. JMHO.
    https://twitter.com/HDivot618/status/905805192708349952

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

    AVEO is under buying pressure, rumor is potential buyout by big pharma north of 15….I’m in lower but added today at 3.58
    I’ll sell the news
    I’ll probably cut short also..window being closed

  • Mark Shinnick

    Excellent point, thanks.

  • HD

    there are harder ways to trade it. :-)

  • StockTalker

    Count 5 minors on that move, clear to short.

  • ridingwaves

    go go Aveo

  • Mark Shinnick
  • StockTalker

    Curious now to see what crude will do, any rigs on the eastern coast?

  • StockTalker

    s //QM @ 49.2

  • http://evilspeculator.com Sir Mole III

    Hey guys – check this out: http://evilspeculator.com/statistics/

    Still a bit rough around the edges, but let me know what you think 😉

  • HD

    What’s the call on Gold? Rallied all year. 1355 today. Dollar got crushed -12%. Seems like that was a no brainer but /DX as an ICE product? eff them. Is 91 a big level for the $ or not?

  • ridingwaves

    GILD came back with insufficient data history

  • HD

    Last year gold rallied until Sept and then…. Just for reference.

  • http://evilspeculator.com Sir Mole III

    Let me check it out.

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

    very nice.
    Need some kind of “please be patient while numbers crunch” screen.

  • http://evilspeculator.com Sir Mole III

    Nope – just worked for me – try again:

    http://evilspeculator.com/statistics/?symbol=GILD

    Next time please take a snapshot so that I know what exactly the error was.

  • http://evilspeculator.com Sir Mole III

    Ahem – are you blind??

  • http://evilspeculator.com Sir Mole III

    I can’t do futures with the website version but until I do the continuous contract locally check this out:

    http://evilspeculator.com/statistics/?symbol=gld

  • Mary

    Very nice Mole. Thank you.

    I want to figure out how to combine the monthly skew with the monthly sharpe ratio to find an edge using option spreads.

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

    Size 8 font with light gray on white? I might as well BE.

    I bet BobbyL can’t see it. he he.

  • http://evilspeculator.com Sir Mole III

    Alright – I darken it a little (sheeeshh!!!)

  • HD

    Very nice. Just FYI on my desktop, hardwired, RTN (my Election stock pick) took over 4 min and I cancelled. On Safari, iPad, <5 seconds.

  • Mary

    It worked for USO but not UNG – it said it needs 10 years of data to process.

  • Julie

    RW Also short ….. Praying for both of us and others …..
    JULIE

  • http://evilspeculator.com Sir Mole III

    Yes it does – otherwise the monthly stats are not really useful.

  • Julie

    SDS and F
    JULIE

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

    That makes sense … however 10 years currently includes the crash. How much do you think that will distort the usefulness?

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

    I kind of agree. New wave, new characteristics for sure.

  • http://evilspeculator.com Sir Mole III

    Good point… mmmh… let me think about that. If I push it to 20 years then it’ll cut down on the symbols.

  • ridingwaves

    you got it boss, screenshot for now on, worked this time….damn next week looks ripe

  • Mary

    How about make # of years an enterable parameter and default it to 10? We can adjust it if desired.

  • HD

    something to consider. Less is more. How have they all behaved since the crash lows vs longer term.

  • ridingwaves

    gerbils, impatient little fellas they are…I wonder what Richard Gere was doing while they fiddled around…

  • Mark Shinnick

    Total cliffhanger like I haven’t seen for years.

  • Mary

    This message doesn’t show until after the results are returned.

  • Julie

    Thanks Mole … You are able to bring up historical data on individual stocks also…… Wow !
    JULIE

  • Mark Shinnick

    Pretty slick man.

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

    Trump, Schumer agree on planning to repeal debt ceiling: report

    ole bucky has its eyes on 86 over the next couple months is my take….gold gets thru 1375, then 1400 and off it goes…

  • http://evilspeculator.com Sir Mole III

    That is the idea. I was hoping this will give you stock and ETF slingers a slightly better edge. Think for instance CSCO which is currently in a down cycle. BUT next week for some reason (earnings?) it statistically has a big up week. Would you want to be short that week? Exactly 😉

    http://evilspeculator.com/statistics/?symbol=CSCO

  • http://evilspeculator.com Sir Mole III

    I am fucked…. :-(

  • http://evilspeculator.com Sir Mole III

    I am printing the ‘since xxxx’ on every chart. So in the end everyone can decide whether or not they want to use the data. If I add too many rules to this it’ll turn into a mess.

  • ridingwaves

    I’m out of S

  • StockTalker

    Big shake out this morning, would be cautious of a dollar rally.

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

    first to post, a work of art, err MOle’s works.

    Blue Ribbon!

  • Mary

    Yes. That is what shows until you click the submit button, then the screen goes blank until the results are returned.

    I’m not complaining … just trying to provide feedback for you.

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

    I’m however thinking of getting rid of week #53… mmmhh….

  • HD

    USD took out last years low on +D, feels trappy but I am not a forex guy. Think gold is a better product too. If dollar does find some support there are plenty of new gold bulls to crush.

  • StockTalker

    Right, took the crude short based off the dollar. That would be considered a buy in my book. Usually you see support tested and broken before momentum will change.

  • ridingwaves

    says the guy living in a nice Spanish town, in a nice villa and far away from the current madness in the US….

  • HD

    SPX 2464.50 HWB days range. Good for bullish above/ bearish below into the close IMO

  • http://evilspeculator.com Sir Mole III

    Okay, I get it now. The problem is that the script runs in the background and it’s difficult to show an in-between message until it’s done. There probably is a way to do it but let’s first see what the response is before I spend more time on perfecting the form.

  • HD

    Monday is Patriot day. 9/11- last year that Monday SPX rallied 43 points! after a bloodbath Friday 9/9

  • Mark Shinnick

    I’m in a similar place but with short bias. My models still hanging to short with some decent objectives still to go that simply don’t appear on the longside. That said, I’m still paranoid.

  • HD

    I’m with you. OPEX pattern is low today or tomorrow. If it works this time too.

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

    that Dollar looks like it’s done with the downside.
    but I’ve been wrong before.

    https://uploads.disquscdn.com/images/bb171026ba1944896ecb9c9a51274d6a7a2364b2a08a92bcd88180cdff28f7f7.png

  • Mark Shinnick

    It makes sense to my models with no more short hold, but no buy yet.

  • OJuice

    It’s at an interesting point, but, it’ll have to show some signs of a reversal before its worth betting on.

  • HD

    Check out that leading diagonal to start the year, followed by a clean 5 wave impulse down! #wavewanky

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

    dam it, who turned off the down voting?
    😉

    #gagcoughsputter

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

    5.40.. 5.41 – good enough for gov’t work.

    See you guys tomorrow.

    http://stockcharts.com/h-sc/ui?s=GLD%3AUUP&p=D&yr=3&mn=0&dy=0&id=p65308379878
    -GG

  • HD

    elliot wave- individual results may vary. :-)

  • HD

    looks like some sell on close orders? SPX basically closing HWB days range. Nice set up for Friday. Last 2 weekends have been eventful. See if longs want to hold or sell. My little algo spit out 2436 and 2480. Either way it would quantify a wave.

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

    blech more USD downside and poof goes GLD short/ DUST long

  • http://evilspeculator.com Sir Mole III

    Let’s not exaggerate – it’s more of a palacio than a villa 😉