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I only cheat during Expiration Week
72

I only cheat during Expiration Week

by The MoleDecember 19, 2008

Hey, it rhymes!! No, not on my wife of course – on the market when it’s obvious that some market monkey business is about to transpire:

So, this is what I did today – what the chart does not show is that the Zero temporarily signaled pretty negative at the 11:00am EST candle. This is why I posted a ‘forget the rules and get out’ message to any watching leeches. I rarely do this but today was one of those days when you don’t care about a trend because you will most likely not get one as the market monkeys are busy screwing you six ways to Sunday.

But you rats know that I usually play it by the book – let’s see what would have happened had I waited for the new indecision exit rule to kick in. There you have it – out at 1:00pm sharp as the candle pops up and shows blue dot (whatever color that’s going to wind up being going forward). Loss? A whopping 2.75 ES points – or $137.5. Now, looking at today’s tape – I call that ‘over-performing’ for any automated system.

Just wanted to throw this out there – as I said to one of the new rats in my previous post: If you stick to the rules the Zero will treat you very nicely. Also, it will keep you in the game and prevent you from doing dumb things. I mean – how many of you were ready to short the heck out of this market right at 2:00pm? Exactly – we didn’t go anywhere and the pivot basically held – just like the Zero predicted.

Have a great weekend, my dear rats – I’m completely worn out – having worked non-stop for the past two weeks. I need a break – don’t expect any posts until Sunday when I do the grand weekly forecast (no idea what I’m going to say about this tape but I come up with some b.s.).

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.
  • fuzzygreysocks

    Because the B/A spread was better at the time, I pussed-out & began scaling into my JAN SPY calls with $93s rather than the $94s I blabbed about last night.
    http://tinyurl.com/4ozhww
    Got 'em ferr $1.95.

    (D@mned computers sold my $1.30 SPY DEC $90 calls @ 3:15 EST for $1.61. HAM! Coulda sold 'em yesterday ferr >$2 most of the afternoon. Didn't know they'd be kicked-out automatically before the mkt closed. News to me. Livin' & learnin'. I was gonna hold 'em till the last bloody second; into AH, even.)

    SPX/SPY closed today at the lower resistance line of the ascending wedge.
    The JAN crude oil contracts expire today. FEB contracts begin MON, and they're going for a few bucks more than the JANs are ending.
    I'm expecting a decent artificial pop in the market based on stupid computer programming funNgames.

    GL

  • traderbull

    Thanks for the hard work you put in. I was going to short AEM at 2:30 and took a look at the zero and decided against it. Saved me about 2.5 points.

  • MaxPainMan

    hey, i like the Zero RSS idea… or a feed of some sort.
    i could make it send text alerts to my cell phone while i'm at lunch and trade from my iPhone/Blackberry/whatever.

    you could even charge extra for that service
    :-)

  • fuzzygreysocks

    >> you could even charge extra for that service <<

    A premium charge.

  • etechpartner

    Nice ! The hard work is showing. My vote is still for some God-awful color like mauve or fuchsia for the dots :-)
    Anyways, I am loaded up on gold related puts as of yesterday early morning. Watched a lot of yesterdays gains disappear in the counter rally in that market today. But I am planning to hold tight for a while. It took about 4 weeks to build that mini bubble there, I suspect it will take at least 2 weeks to bring it down some. Maybe a little more. It seems to hinge on the strength of the Dollar. So when you guys were saying Gold at $600 I kept mumbling ” from your lips to Gods ears…” This is my only tarde tha'ts really moving for me at the moment. Moved correctly yesterday and not so much today…

  • minion of the ppt

    Mole as requested a picture with the hammers and shooting stars… The ones marked red shouldn't have been executed, the yellow ones could have been passed as well. If they were valid a second signal would confirm the move.

    My suspicion is zero got triggered during the earlier part of the candle but momentum in the direction zero is pointing to was already exhausted when the candle was finalised.
    The candles marked yellow show indecision, which is not that bad but is not so convincing either.

    I checked the pattern also with the “longer” history and seems to be valid. Using this rule would have reduced the numbers of trades by eliminating not so profitable ones.

    http://screencast.com/t/rCf95QKnsH2

    Also, I'd use the blue exit points only to set stops as they indicate the original move has run its course. It can get revitalised though. No need to race for the exit but time to draw a line in the sand.

    Have a great and relaxing weekend! I look forward to reading your inspired b.s.

  • JWBlack

    If all your work turns out to be correct, make sure you get a free subscription when they go to a pay model.

  • molecool

    Okay, I get it – only problem is that the VTAs are based on the previous candle. You see – the white line swings ABOVE zero and I initially told people to wait an hour and then take a trade. That was before I added the alert lines in the indicator. So, what I'm doing now is to wait if the signal stays above zero for an hour and then I paint those trade alert lines.

    So, when you take the trade this candle is right at the open. Now, what you could do is to get out after you see such a candle. I have to say however that basing a rule like this on expiration week tape is not exactly a great idea. I think this is good information and I will start keeping an eye out for it. IF we keep seeing this repeat itself for weeks on end, then I would absolutely consider adding a rule. The math for that would be pretty easy. But I believe it's a bit premature for this.

    Greatly appreciate your input – please keep it coming.

  • molecool

    You're welcome – enjoy your weekend and buy your old lady (if you have one) a drink on me.

  • fuzzygreysocks
  • Jigsaw

    The SPY's look just plain bearish to me
    http://screencast.com/t/UOB5SB7LG

  • Saht

    Thanks again for all the work you're doing on the Zero, etc. Check it throughout the day.

    No denying that the markets are in an uptrend but the uptrend is under pressure. Maybe it survives. Maybe not.

    Warning: Be careful shorting the RUT. It is almost 100% computer traded.

  • Saht

    And one more thing: What I like most about the Zero is that it takes the thinking out of trading decisions. Thinking can be a traders worst enemy.

    As Pee Wee Herman said: “First your mind plays tricks on you, and then you play tricks back.”

  • BigHouse(Aka Mr Vix)
  • molecool

    Well, over thinking is what the problem is. Next caveat: Emotions. It's a lot easier to stay in a trade during a swing against you when the Zero shows you that there's no juice in that move. I think that is a hidden benefit of looking at it.

  • ProZachJ

    Interoute, the internet networks company, reports that three of the four internet sub-cables that run from Asia to North America have been damaged.

    http://timesonline.typepad.com/technology/2008/

  • BigHouse(Aka Mr Vix)
  • RPinSC

    This is a charting tool use by TradeTheMarkets. It is a combination of
    Bollinger bands and keltner bands with their crossover using a histogram.
    This is a good description:
    http://www.tradethemarkets.com/products/item5.cfm.
    If you would like the ThinkScript, let me know.

  • RPinSC

    Change the color of those indecision lines—white would be nice. Using this with Squeeze in TOS and they seem to be complimenting each other. I have squeeze set up at a shorter interval. I keep watching let you know. Thanks Great Evil One.

  • de3600

    http://www.cnbc.com/id/28310479 12 major banks downgraded amazing they didnt do this before the market opened

  • molecool

    What's squeeze?

  • molecool

    You are amazed? Don't you remember? Friday is Bank Failure Day!

  • de3600

    :)

  • fuzzygreysocks
  • ZigZag

    If SPX can't close above $920….Stick a fork in it.

    http://tinyurl.com/8nlfsy

  • straddleback

    Thanks RPinSC. I have a TOS account. Appreciate if you could send me the script at rgl50 at sbcglobal dot net.

  • de3600

    Intresting chart JPM on a 20 year

  • GEO

    Mole, caution!
    SPX will hit 910 before going down in two steps, the last one being the bottom of this bear market!

  • de3600

    Got a chart or theroy or are you like half the people that post stuff like this with nothing at all to back it up.

  • http://guidepostings.blogspot.com perspective

    check the vix during the 2002 low to todays vix. you tell me if that's not the thumbprint of pain in both.

    tradepostings.blogspot.com
    guidepostings.blogspot.com

  • fuzzygreysocks

    Govt money laundering question – and – a Monday Oil pop (maybe)

    http://investorvillage.com/smbd.asp?mb=6863&mn=

  • gagelle

    Off topic: This Year's Bach festival, “Bach from the performer's perspective,” begins December 22 at 9:30 AM and runs until Tuesday, December 30 at 12 pm. http://www.wkcr.org (Runs 24 hours a day.)

  • molecool

    Feds are buying treasuries to keep the bond market from imploding. It will fail – the 30-year Treasuries are on the cusp of a major downward reversal. Watch what has happened to the Dollar in a matter of two weeks – the bond market will move similarly.

  • BigHouse(Aka Mr Vix)

    Who has the balls to short this? One day the gaps will get filled.

    http://screencast.com/t/mu2F13R4a

  • suchen

    i was so ready to short @ 2pm just watching the charts…then looked @ the Zero and i was like F#*K it and I walked away from the computer for good!!! and glad i did cuz it just wasn't worth it with, quadruple witching, which turned out to one boring tape.

  • JWBlack

    I am short a tiny bit from 2 sessions ago. Unless I am in, it is hard for me to follow closely. As of this moment I am guessing the 111 area as a first downside target, with the possibility of 100-ish eventually.

  • de3600

    Lol watching fox today half these people on calling for a bull market run starting in 09 guess i will be short a long time remember GS was way to cheap at 175 bet we see 25 by april

  • de3600

    nice triple bottom it broke out nice will come back down to 100

  • malusDiaz

    1/26/2009 – New Year: Ox.

  • old_lefty

    Breakaway gap. measuring gap and exhaustion gap! All it needs is a nice topping candle.

  • gagelle

    We're All Madoff, Karl Denninger

    http://market-ticker.denninger.net/2007/08/toug

  • T.B. Aurelius

    Amen.
    +1

  • T.B. Aurelius

    I have to disagree with ya…
    it's almost all thinking…I reckon…

  • molecool

    That's what they're paid to do – herding the sheep to the slaughter – LOL :-)

  • Insect Overlord

    I have two AEM puts and Friday it formed a bullish engulfing. Overbought? Yes. Bullish engulfing, bad for puts? Yes. Still in? Yes. We'll see what happens.

  • http://zstock7.com/ zstock

    ALOG, I think the market punished them too much–$26.5 will soon be $34 easy

  • molecool

    You should be fine – I think Gold has topped at 880 for now.

  • standard_and_poor

    Thank's, I'll check it out.

  • Dave3

    I don't usually trade individual stocks, but with the Madoff scandal, NDAQ looks like a good short/put with a break below $23.00 or so…target $15.00 area. I'll likely do puts that are 2-3 months out.

  • Insect Overlord

    I've been getting my ass kicked for the last two months, so I'm annoyed. But they're Jan options which have plenty o' time. I need to get a few calls here and there while IV is down in case we continue to rally.

  • Insect Overlord

    mole posted WYNN as an idea, despite vowing never to trade that one again 😉
    However, I think he's on to something. First, check out this article…
    http://www.breitbart.com/article.php?id=0812201
    Now look at the charts:
    9mo daily: http://screencast.com/t/JJjJimD5
    60d 2hr: http://screencast.com/t/JikgDUdf

  • Insect Overlord

    I love you, man. LOL

  • ZigZag

    The daily chart of XAU from the March high is signaling lower….

    http://tinyurl.com/7hry84

  • molecool

    LOL – you remember that – don't you? touché …

  • JWBlack

    My data feeds, plus Google Finance, show an 887.88 close on the SPX. 2SWTS says in his commentary that it closed at 887.80. The .08 difference results in 1-2 points difference in retracement levels. That difference may not be a biggie, but what do you guys see as Friday's close?

  • http://zstock7.com/ zstock

    Anyone see the hammer candle on the VIX? That means something !!!
    Maybe that VIX and More guy knows what's coming. ( doubtful) That guy sure gets his blog listed on everybody's sidebar–but he never puts out any solid calls, so It's impossible to back test him—-

  • http://zstock7.com/ zstock

    I now have 2 GDX companies that should have and DID fail at their 200 day–
    I'm adding AU to the NEM list.
    here's the chart
    http://zstock7.com/wp-content/uploads/2008/12/a
    I think the GDX reached it's high 33.8 and it's downhill from now on.

  • http://zstock7.com/ zstock

    And then if you go to VIX and Lubes twitter page, he has everybody blocked out—I'm telling you –there's something very creepy about this guy—
    http://twitter.com/VIXandMore
    it's like that other guy Gold and oil or something or other—he doesn't have 10 hrs experience either—but they grabbed catchy names–and so everybody puts them on their blogroll–
    To get on my blogroll-you better be trading damn near perfect!!!!

  • http://zstock7.com/ zstock

    You are probably wondering? DId mole and Berk make it on my blogroll? Well YES they DID—they are in my member's area under Top Ten trader's.

  • http://zstock7.com/ zstock

    Zigzag!!!
    Can you run another VIX chart? Maybe this time it will be in the 60% winner's bracket, hehe–
    What do you think?

  • Mastachopchop

    The ES is chuggin along tonight. Maybe its the holiday rally?

  • molecool

    CLEAN THEM CUUUUUUUPPSSS!!!!

  • ZigZag

    Hi Z, When the VIX went thru $50 it broke my pattern. Currently I'm watching the $37 area as a launch pad upward. I'll post the chart as soon as I get another signal. :-)

  • JWBlack

    My data feeds, plus Google Finance, show an 887.88 close on the SPX. 2SWTS says in his commentary that it closed at 887.80. The .08 difference results in 1-2 points difference in retracement levels. That difference may not be a biggie, but what do you guys see as Friday's close?

    Edit: Oh, I see that he was doing a weekly, not daily, commentary. Never mind.

  • http://retracementlevels.zstock7.com/ zstock, Pro Select!

    Anyone see the hammer candle on the VIX? That means something !!!
    Maybe that VIX and More guy knows what's coming. ( doubtful) That guy sure gets his blog listed on everybody's sidebar–but he never puts out any solid calls, so It's impossible to back test him—-

  • http://retracementlevels.zstock7.com/ zstock, Pro Select!

    I now have 2 GDX companies that should have and DID fail at their 200 day–
    I'm adding AU to the NEM list.
    here's the chart
    http://zstock7.com/wp-content/uploads/2008/12/a
    I think the GDX reached it's high 33.8 and it's downhill from now on.

  • http://retracementlevels.zstock7.com/ zstock, Pro Select!

    And then if you go to VIX and Lubes twitter page, he has everybody blocked out—I'm telling you –there's something very creepy about this guy—
    http://twitter.com/VIXandMore
    it's like that other guy Gold and oil or something or other—he doesn't have 10 hrs experience either—but they grabbed catchy names–and so everybody puts them on their blogroll–
    To get on my blogroll-you better be trading damn near perfect!!!!

  • http://retracementlevels.zstock7.com/ zstock, Pro Select!

    You are probably wondering? DId mole and Berk make it on my blogroll? Well YES they DID—they are in my member's area under Top Ten trader's.

  • http://retracementlevels.zstock7.com/ zstock, Pro Select!

    Zigzag!!!
    Can you run another VIX chart? Maybe this time it will be in the 60% winner's bracket, hehe–
    What do you think?

  • Mastachopchop

    The ES is chuggin along tonight. Maybe its the holiday rally?

    I take that back. It hit the 888 RL and started acting funny.

  • http://evilspeculator.com molecool

    CLEAN THEM CUUUUUUUPPSSS!!!!

  • ZigZag

    Hi Z, When the VIX went thru $50 it broke my pattern. Currently I'm watching the $37 area as a launch pad upward. I'll post the chart as soon as I get another signal. :-)