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Hitting The Wall
52

Hitting The Wall

by The MoleJune 1, 2016

Not unsurprisingly the combination of both medium and long term resistance on the S&P stood up to a first post holiday assault. I’m sure we’ll be revisiting the 2100 mark soon enough but for now it’s shake out time. Patience is key here and at minimum we want short term context to align before attempting any long positions.

2016-06_01.spoos

This is what I’m referring to. The lower 100-hour Bollinger is currently pointing almost exactly at the daily NLSL at 2082.5. That’s a reasonable spot to grab a handful of longs but should it be breached for more than an hour then expect a ride lower for a retest of the 25-day SMA near 2065. Right now the bullish scenario has the better odds IMO but we need to wait out a bit more activity as we got started late this week.

2016-06-01_spoos_LT

In case you missed it – here’s the LT context which I pointed out yesterday and apparently it is being observed. For the bulls this is actually a tricky situation as last week’s spike higher didn’t leave behind any medium term context on the way to 2100. Which means the bulls are vulnerable up here until about 2025 (weekly and monthly SMAs).

2016-06-01_gold

I’m revising my stance on gold somewhat as it looks like it may just make a b-line higher without a full retest of LT support levels. Alright – I’m game – grabbing a small long position here with a stop below 1215.

More setups below the fold – please grab your secret decoder ring and join me in the trading lair:

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2016-06-01_events

We have a little event risk near the open today, so keep an eye on any USD related campaigns as well as equities to some extend.


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.
  • evilasevildoes

    nice synopsis Mole

  • evilasevildoes

    zb short might be a fun one when its primed

  • http://evilspeculator.com Sir Mole III

    Thanks!

  • ridingwaves

    NG crossed 200sma first time since 11/14…program buys buoying the ship
    bio sector break out season is here….yeah…

  • topedge

    thanks for your posts. I am long gc on frt month 08 @ 1216.6

  • topedge

    that was ugly :)

  • ridingwaves

    ISM print came in better than expected…should sell off as that helps the raise rates meme
    went short 1/2 R spy 209.59

  • http://www.ProfitFromPatterns.com/ Ivan K

    B’bong – “Deep question Ivan …. Talking the folks on this site and not main street.” … translation please.

  • ridingwaves

    Healthcare/bio sector strength helping the bulls today, if that isn’t an oxymoron…

    note- New REIT sector debuts 8/31/16….MF/Hedge sector weighting should help those symbols move north until then….semi-educated guess…

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

    if you say so.
    looks more like consumer staples, with a dash of utilities.

    http://www.sectorspdr.com/sectorspdr/tools/sector-tracker

  • ridingwaves

    GG, I’m talking in the interim until 8/31, not today on Reits….
    bio is holding up well today….some screamers to play volume scalps too….
    love it…

  • Yoda

    helping the ox morons…

    Sorry couldn’t resist 😉

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

    end of Summer? I can’t think that far.

    REITS, ugh, we all know that’s supported by Asian Hot money.
    😉

    http://i.imgur.com/MgnXpbu.jpg

  • ridingwaves

    definitely a grab your gagnam style gonads if Asians did sell their holdings…but I’m sitting pretty with a couple picks mentioned here months ago….

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

    this signal is indeed very interesting.

  • ridingwaves

    If GALE gets thru 2.40 -$3 will happen fast and could fly much higher….fast track granted today by FDA on breast cancer…

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

    looks impossible on the daily.

    what’s that saying?
    Go Big, or Go Home
    (shoot for 3.50)

  • ridingwaves

    never say never in bio land…example….that’s a huge return
    http://s33.postimg.org/spaqu22nj/cpxx_never_say_never.jpg

  • Billabong

    “We [the collective body of Evil Speculator] are all good at seeing the forest for the trees.” If we were talking main street, then it becomes a deeper question because of so many varied interests in a variety of situations looking for preferred outcomes.

  • http://www.ProfitFromPatterns.com/ Ivan K

    B’bong – Now that is an interesting hypothesis … real or otherwise.

  • Mark Shinnick

    I’ve been buying tvix. Very tight stop is possible.

  • http://evilspeculator.com Sir Mole III

    A 3.0 signal is not unusual really. We have seen them in the past. But it shows how deceptive some of those sell offs can be. Yesterday the world was coming to an end and today?

    Anyway, great Mole signals in today’s session:

    .

  • ridingwaves

    me thinks all time highs are on the way….

  • Mark Shinnick

    Yeah…might really work to capitulate bears.

  • ridingwaves

    historically wise, we are not in stock bubble….after 2 years of basing maybe they send this one to the moon to give our commander and chief the best stock market president eva before he goes out….

  • Skidmarkalot

    That’s been my thought all along!!!!

  • Time Bandit

    Wouldn’t surprise me. Of course there isn’t much that surprises me about the markets anymore. :)

  • ridingwaves

    with light summer volumes they could algo shorts to death while taking the market to new high’s…..

  • Mark Shinnick

    Thing is…we are in a DS global asset bubble.

  • Mark Shinnick

    Yes, this should finally bankrupt the bears.

  • ridingwaves

    2001 30X PE, 2016 18X
    looks like lots of room to roam higher…
    this Simple Bespoke chart looks like 3rd time is charm to me…that down trend line push thru was non existent in other critical junctures…
    http://s33.postimg.org/4g76f4nov/Bespoke_chart.jpg

  • Skidmarkalot

    Hang this crappy market on the new administration. I’m long on the SPY’s!

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

    Yes, they are like the sea, she will do as she pleases because it’s her nature to be free…

  • Mark Shinnick

    All true, and nothing but rising prices is going to help compel increased up volume and participation which has otherwise been persistently declining. (BTW, I remember buying S&P at around 6+ X. )

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

    Bailed on those…maybe later.

  • Mark Shinnick

    What doesn’t kill us can make us better.

  • ridingwaves

    well, tell me something I don’t know….the premise is intact….

  • Billabong

    Price action, price action, price action … we have to watch directional bias. The markets are churning …. 2nd day I’ve flip flopped at least three times between asset positive and negative moves. DX is down 1/2% today … this could be a currency thing or it could be noise in the wake of confusion.

  • Time Bandit

    I’m very grateful for one of my rules that also happens to be an emotion fighter. This rule is for swing positions that says Price must be through my stop at the CLOSE of the current candle in order for my stop to be activated. My current open swing positions are heavily concentrated in the energy sector with some positions that run on 4 hour charts and others that run on daily charts. This delayed stop rule calls for patience and recognition of the longer term trend especially during volatile days like today.

    When Crude was down $1.32 this morning, I had to pucker up while my accounts got pummeled. If I had hard stops in play, I would have lost some serious money and then become confused as to what to do next. But because of my rule, prices were given the rest of the current candles to find out what they really wanted to do and instead of big losses, my accounts are now positive on the day. The Energy Sector Bullshit Meter is running at extreme levels but day to day Closing Prices will let us know what’s really happening.

    I also hit another +.68 R Scalp on a day trade of the GBP/JPY. BTW, I do use Hard Stops on day trades as this is a different game.

  • Billabong

    What is the trend? You played the trend … “I had to pucker up….” Trend trading / following does that. I was watching CL this morning for any sign of breaking the trend. It managed a down move to my 25 EMA and then someone bought it back up on the “OPEC” announcement (excuse) …

  • Time Bandit

    Yep. I really only needed to check on my positions just before the Close on the Dailies, at 1:30 PM, and just before the Close on my 4 Hour Charts and I would have missed this morning’s crude oil drama completely. But I’ve been recently scalping the GBP/JPY using 10 Minute Charts and this puts me in front of my computer. I’ve been experimenting scalping this pair instead of swinging with the daily and so far so good. I hope this pair remains viable after the Brexit Vote.

  • mugabe

    Yeah, you have to trade in accordance with your system / time frame.
    The issue for you, as you say below, is that you’re being forced to look at the market with great frequency because of your other system. The main thing, going forward, will be seeing whether your DNA, as Ivan puts it, is compatible with operating on two v different time frames.

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

    TB, I’ve been thinking about implementing your stop strategy on my swing trades as a way from reducing whiplash. I’m going to run the numbers this wknd for the scenario you mention to see whether it has been a negative but I am pretty sure it has been for me. The other possibility is as Mole mentioned many times was reducing position size and widen stops.

    Only thing is what happens when there is a major down day like some crazy shit happens. Do you just let it slide and wait for the close? I guess that’s why I have been willing to run with a potentially suboptimal stop system as to not get into these situations entirely. Just curious.

  • Time Bandit

    OK. For me it depends on what my time frame is on my charts. I use mostly multiples of ATR for my stops so the longer the time frame of my chart the wider my stops are to begin with. The amount of my estimated stop loss dictates what my size will be. This also allows for reasonable consistency in R (Risk) I only allow my stops to be overrun up to the closes on either my 4 Hour or Daily. (I do not use this method on tighter time frames.)

    There are exceptions when, I will not wait for a candle close and that is on a complete runaway. For example, today I think Crude was down $1.35 at it’s max at 2.75%. If price had gone down 5% ($2.45), I would have to close no matter what. 5% daily moves don’t happen very often and when these moves happen they are not necessarily always on the wrong side of a given position. The bottom line is that I’ve found that in the vast majority of times price will correct in my favor and I’ll be better off than if closed earlier with a hard stop loss.

    Keep in mind that I am using this for the energy sector and there might have to be other variables included for other sectors or general indices. Also your max pain criteria could be very different than mine. In any event, the smaller the size, the more price can go against you. I’ve found that I can make more money staying in a smaller position longer than getting whipsawed in and out of larger positions.

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

    Ah k. So I guess you do have an outside stop on the runaways. Makes sense. Yeh I totally agree on the smaller positions to avoid whipsaw.

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

    Sleeping? wake up Neo.

    what is that old saying? …Limited upside.

  • Billabong

    Why aren’t you in bed????

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