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Inflection Point
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Inflection Point

by The MoleSeptember 2, 2015

This is pretty much it folks – after months of sideways churn followed by a massive wipe out we have now reached an inflection point that will determine the character of the tape for months to come. I cannot emphasize enough how important it is for you all to pay attention – right here, right now.

2015-09-02_spoos_briefing

The spoos are sitting on weekly support and resolution is approaching. I’m short here but am prepared to flip above ES 1938. The only chink in our plan’s armor is the fact that we are heading into a long weekend. This makes getting positioned here/today rather risky in that we most likely will see sideways tape for the coming days followed by a large gap on Monday night.

Today is probably the last session this week to expect any meaningful participation (except perhaps tomorrow morning during the ECB press conference), which complicates matters a little. But heck – I’ll be your huckleberry. For now I’m exposed only 1/2R and if the tape moves in my favor 1R I’ll be adding another 1/2R. It is important that you don’t get drawn into making large bets which could turn into very large losses on a gap higher or lower next week.

2015-09-02_ZN_briefing

The ten year bond futures look like they are in the process of completing a floor pattern after a rather massive shake out last week. Good spot to start accumulating again IMNSHO and I’ve grabbed a bit of exposure which I am splitting with…

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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.
  • evilasevildoes

    great stuff mole…I am using Murey lines really help

  • BobbyLow

    Mornin Folks.

    This extreme volatility has the makings of a Bear Market but we’ll see how it all shakes out. In the mean time, I picked up a small long on Crude but I’m also short Oil Companies via ERY. I don’t like it when these two are not in sync but that’s the way it shakes out for me at the moment. I’m also stalking the GBP/JPY to see if I want to go for a scalp, swing or nothing.

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    Do not disagree on the large GAP, but ES futures actually trade normally on Labor Day Monday until the European close – they then take a 5 hour break….

    Employment report is the BIG thing……

    but one should also be aware that in 5 of the 8 months in 2015 we have bottomed nicely on the Tues or Wed post the first Friday and rallied nicely in to opex (exceptions – Jan – slide from the late employment report and Feb and April: cash lows on the first trading day of the month). If it occurs again, it would set up for a nice rally in to QUAD opex as opex has generally seen rallies in to at least the start of the week since February 15 and September opex has always seen nice squeezes higher since 2003 (with two slight exceptions in 2005 and 2012, when we saw out of control rallies end on the Friday before opex week)

    Just some things to keep in mind….

    My bias is to go long next Tuesday….. if the opportunity is there, as that is where the strongest trade-able turning point edge lies.

    -D

  • http://evilspeculator.com molecool

    I was stopped out but decided to jump back in short a handle lower.

  • wandering196

    short es long eur/usd, long zn

  • http://evilspeculator.com molecool

    Again my position size is very small as this reeks like FU tape.

  • wandering196

    yes small, I am managing to bank coin with small positions

  • CandleStickEmUpper

    Short nq @ 4188

  • Billabong

    Didn’t work out too well going long on Tuesday, 3 September, 1929. They were singing “Blue Skies” going into Labor Day weekend….

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    Looks like it was a GREAT TOP – just like on 2 Sept 08 ……

    The only edge is if we are trading down on the day and making new lows below ES 1898.75 or whatever low price we hit late this week…. otherwise there is no turning point trade-able edge.

    -D

  • Huey

    Pretty new here but seems like your collective strategy is similar to mine. Reshorted ES this morning after taking profit yesterday afternoon. Small size as I don’t want to give everything back being short at low levels. Stop above today’s high. Also, just took a stab at shorting USD/CAD, divergence on the up move after an extended run, tight stop with decent profit potential if it works out. Cheers!

  • http://evilspeculator.com molecool

    Hey Huey – welcome to the site. We pretty much follow the tape without over thinking it. Re-shorting may already have bordered over trading and if stopped out again I’ll let her run without me for the remainder of the week. Plenty of fish in the sea – no need trying to force resolution in equities ahead of Labor Day.

  • Skynard

    SPX above 1940 can run big time:)

  • Huey

    Thanks, and agree about the possible over trading. These will likely be my last trades of the week as well.

  • http://evilspeculator.com molecool

    So the cops catch this guy who’s robbed an old lady the night before. When being interrogated the detective says to him: “The ‘ole bird only had a few pennies on ‘er – wasn’t really worth robbin’ ‘er then, ‘innit? The guy shrugs and replies: ‘Yes gov’na’, but a penny ‘ere and a penny there – it adds up!”

    (joke works better if you can do a Cockney accent)

  • http://evilspeculator.com molecool

    The Skynard won’t be denied…

  • Bill

    I am short USDCAD too as a long crude proxy and due to the daily inverse hammer near the highs. That is my stop. GL.

  • wandering196

    LOL I joined ES in later 2011 after not banking any coin. This sell off/correction (whatever) I am making money and I am so much CALMER

  • Skynard

    Market has seemingly settled down.

  • Skynard

    Gap fill, like clockwork

  • CandleStickEmUpper

    covered at 4165

  • ridingwaves

    FIRE sector led bull fake out XLF 23.04 high now 22.77
    VIX scalping is the game….even the big boys are doing it…
    VIX futures volume jumped 41% to 6.4 million contracts from a year ago,

  • CandleStickEmUpper

    Long 4172.25

  • CandleStickEmUpper

    Sold 4177.00. whew, what a whipper today

  • Billabong

    Right now on the daily, I have no edge across the board to add positions. I currently have 4 shorts and 1 long with hard stops in-place. I’d just as soon go into the weekend flat. And you’re right on ES selling down … It looks like “they’re” selling into strength this morning. An edge for me may only be a few hours away and another train pulling into the station as MOMO builds.

  • Skynard

    Will be ready to short this market at 2200.

  • mugabe

    who knows? but there’s such a mammoth shedload of resistance above that taking it out *shouldn’t* be easy. guily until proven innocent, imo.

  • ridingwaves

    you will get it if the yellenator says rate move on hold this meeting…that would be ripe…

  • ridingwaves

    OT-Mole, is there much talk in the street regarding the EU migrant crisis in your little village? or are you too removed from it based on location?

  • mugabe

    @ SirDragonet

    Just had a quick read of Clenow’s Stocks on the Move. His idea of using the regression line as a measure of momentum coupled with deviation from it is an interesting one. I imagine this selection process is not v different from using pure rate of change over multiple time frames, but it’s an interesting ‘lens’ he offers.

  • SirDagonet

    I thought it was interesting as well…

    Edit: I thought he set up a website for that concept, but I can’t locate what I previously bookmarked…

  • Skynard

    Watch for a dollar gap fill here at 96.00 (w4) before the next move down.

  • Huey

    Stopped out of USDCAD on that 120 tick pop

  • Billabong

    I took the opposite side on a daily gravestone / 25 EMA.

  • Darkthirty

    ii-5-(1)-{3}

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

    I’m inclined to fade whatever move happens today with the weak participation.

  • Ronebadger

    Patience, brother….that might take 10 or 15 years…. 😉

  • BobbyLow

    I’m close to joining you but today’s candle is not complete.

    BTW, I use the 20 Day SMA on my BB’s and its visual is very close to the 25 Day EMA.

  • evilasevildoes

    What is Fire sector ridingwaves?

  • evilasevildoes

    Put those Murrey lines on my 15 esig…say 1914 and 1920…..traded crude with them too pretty simple with market profile and Always with Zero lite

  • Skynard

    Could also take 2 weeks:)

  • Darkthirty

    finance/insurance/real estate

  • Skynard

    Game on

  • ridingwaves

    see below…big component of spx

  • Darkthirty

    ALT b-2 complete, c target 2049.5 ES

  • ridingwaves

    china markets are closed next 2 days…could be lots of gaming on light volumes thru Sunday night

  • evilasevildoes

    doom for oil <——-http://inhabitat.com/video-nikola-teslas-dream-is-finally-a-reality-with-wi-fi-powered-electronics/

  • BobbyLow

    I hear ya RW. With the exception of Forex, I’m using daily charts. My most recent back test went back 17 Years and it was impossible to take into consideration Fed Days, War Threats, Flash Crashes or any other kind of threat imaginable.

    So I’m putting on a very large set of Blinders and just riding through this stuff. :)

  • Edd

    Thanks RW, try not to ever allow news to influence me, but given recent Asia trading, China closed is worth keeping in mind

  • ridingwaves

    volume and sentiment wise it’s worth keeping in back of head…doesn’t change a stop though….

  • ridingwaves

    sitting on hands right now…following the plan…scouting for oppotunities

  • Darkthirty

    had to look it up myself!!!

  • newbfxtrader

    Usd/cad is a top picking exercise. You might need some lessons from Skyward….

  • BobbyLow

    I’m willing to bet that the USD/CAD had some kind of announcement this morning. I took this POS out of my stable because it seemed like it had waaaaay too many announcements and on almost every one there was enough movement to fuck both longs and shorts. The “Loonie” is too Looney for me. :)

  • Huey

    Interesting observation, I’ll have to look into that more.

  • ridingwaves

    operation tame the vix could be in play over next couple days…
    too much talk in the media about the vix right now, I think they have enough lemmings… S VIX with tight stop

  • http://evilspeculator.com molecool

    Don’t even get me started on this fucking train wreck. It’s not as extreme in Spain but if this continues I will have to leave Europe in a few years. You can’t just open your borders and allow unmitigated immigration – it’s unheard of. I hate to quote the Donald but either you have a country with rules or you don’t. This situation is completely FUBAR.

  • http://evilspeculator.com molecool

    Yeah, this ain’t goin’ nowhere today…

  • Huey

    Seems like a prudent trade with activity drying up and going into a holiday weekend. Good luck!

  • Skynard

    Rut Roe

  • http://evilspeculator.com molecool

    Yupp…

  • http://evilspeculator.com molecool

    Not going to chase this one – no directional conviction here. Too late in the week to get on board IMNSHO.

  • Huey

    Out of ES for a scratch too. Likely done trading for the week but will continue lurking!

  • CandleStickEmUpper

    I think we break 1940 ES

  • Skynard

    Better or bears will smack it again.

  • ridingwaves

    very small bet..so prepared for any outcome..
    stalking a bio symbol that might move fast right now…

  • OzarkHillBilly

    This might be fun to watch but I doubt I’ll be jumping in either at this point.

    My soon to be three year old son just told me “You can’t watch the stock market all day dad. You can’t watch it till the sun goes down and the moon comes up.”

  • http://evilspeculator.com molecool

    Alright – thus far Scalpius has produced 50R in its first month. Actually there are two campaigns open which have banked another 2R+ thus far but it’s not on the graph yet.

  • newbfxtrader

    @Huey77:disqus https://www.tradingview.com/x/syvwOMW6/

    Its really difficult to top pick. Unless you have some sort of experience and system to go with it.

  • wandering196

    write that one down!

  • SirDagonet

    50R in a MONTH??

  • wandering196

    wow

  • http://evilspeculator.com molecool

    Yes sir.

  • newbfxtrader

    Heh you better not be trading Forex then…

  • Bill

    I’m super jelly.

  • http://evilspeculator.com molecool

    yeah, I’m still in denial but this is rolling out in a spectacular fashion. unfortunately we had a NT problem yesterday and had to postpone turning on the subs. it sucks and I’ll probably work all weekend to create a work around.

  • OzarkHillBilly

    His mom already has!

  • SirDagonet

    going to have to take suggestions for a new moniker… Molecool won’t suffice if you reach what you typically describe as rock-star status in the trader community…

  • http://evilspeculator.com molecool

    Seems to me that the kid may be a better trader than you. Let’s get him his own account! 😉

  • http://evilspeculator.com molecool

    I think humility may be the best path. Whenever you think you have mastered the market it has this nasty habit of stomping you back into submission.

  • SirDagonet

    to be sure, drawdowns will come.. but congratulations are certainly in order for your performance on building the system…

  • http://evilspeculator.com molecool

    You better believe it.

  • OzarkHillBilly

    I’m definitely planning on teaching him some real skills and getting him exposed to things without pushing anything too much. I’m amazed at how many Americans in particular are basically turned over to the matrix by their parents and then expected to thrive. OTOH, I’m equally amazed by the parents that micromanage every detail or brag on their super expensive preschools but never make sure that their kids can actually think for themselves.

  • ridingwaves

    anyone looking at NG down here, seems to be a buy area

  • SirDagonet

    “but never make sure that their kids can actually think for themselves”

    George Carlin has a thought about that at about 1:15

    https://www.youtube.com/watch?v=hYIC0eZYEtI

  • Skynard

    Could see a strong move here to break this res.

  • Malcolm O’Mara

    Yes. Via UGAZ @1.62.

  • OzarkHillBilly

    It’s essentially an invasion. I’m hoping in the long run that it causes Europeans to stop supporting my own country’s seeming willingness to sow chaos on their borders.

  • mugabe

    better to be in denial about *good* results

  • saltwaterdog

    keep in mind inventory #s at 1030 tomorrow EST

  • Skynard

    Gap still at 2.60

  • Edd

    added ng mlp to family accounts today.

  • ridingwaves

    having a hard time finding that gap…

  • mugabe

    just seen it – i think. a lot of these momemtum guys are not big on hard stops and that is based on their research. Clenow is big on diversification and volatility based position sizing as regards futures in uncorrelated markets.
    As regards his stock system, diversification really goes out of the window. That is my problem with it as you’re going to have a portfolio with considerable volatility and correlation if it’s 100% stocks, notwithstanding his market filter rules (below 200-day ma). Psychologically, could be v tough.

  • Ronebadger

    I made $50.00 today!!! (Tough market….)

  • BobbyLow

    Huey, I looked and couldn’t find where there was an announcement on the CAD today but coincidently there was a jump in the USD/CAD right around when there was a report of a 4 Million Barrell Build in Oil at 10:30 AM EDT. I never want to give too much credit to these reports but after the Oil Report, Crude tanked but then ended up closing green on the day.

    This is why no matter what the speed of the chart I’m trading, I ALWAYS want to wait until the Candle is Complete before making any decisions. I’ve been burned way too many times jumping the gun. :)

  • newbfxtrader

    Beers on you buddy!

  • mugabe

    but how much R is that, lol?

  • Edd

    My largest losing trade this week was jumping the gun and when I did it I thought immediately of past comments you made. Laughed at first, then not so much. Broke my rules paid the price

  • Richard Foster

    Last 4 days averaging highest volume in CL for the past 5 years.

  • CandleStickEmUpper

    Broke that 1940.

  • ridingwaves

    so far so good….

  • Huey

    Good point, I didn’t take into account the crude storage number and I was definitely early to take the trade. I’ll wait for a better reversal pattern on the daily or weekly before trying that one again. Interesting that the loonie didn’t rally much late in the day with crude. Honestly, I don’t care what crude does though as I’m just trying to trade the USDCAD chart :)

  • Huey

    One of my core strategies is fading momentum divergences as the snapbacks can be violent and very profitable, but your chart screams to me that I was early on that one. Whoops. Just for kicks this is what I was seeing.

  • http://evilspeculator.com molecool

    Squeezalishous.

  • M E

    i played it well today (with ETFs). Bought XIV yesterday at 22, when the blood was on the streets.

  • Scott Phillips

    Momentum divergences, virtually without exception are not an edge.

    We look at a chart and see the big reversal nearly always happens after a momentum divergence (on whatever momo indicator you use), and we are naturally drawn to say “holy shit, look at that!”

    When we get cold and analytical, these things (at least the ones I have tested conclusively which are MACD, RSI and stochs) are categorically not an edge, nor a predictor of reversal.

  • mugabe

    Interesting long term perspective:

    http://mebfaber.com/2013/09/18/keeping-it-simple-trend-and-valuation/

    we’re currently downtrend and expensive

  • Scott Phillips

    Fearless built a good system around this concept.

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

    Another perspective on using the RSI … way back in the late 80’s I did some work with Frank Wilder when I was working on my book … Frank is the coding brother of you know who.

    The following is an extract from something I published ages ago.

    “As, broadly speaking, the RSI is a momentum indicator, it measures the relative strength (or momentum) of two movements in price. The fact that these two movements in price should be related to each other is often an overlooked aspect of
    applying the RSI. It is a bit like comparing apples with apples. I shall now spell out a very strict (and hence testable) application of a bearish divergence signal for the RSI.

    The chart below features the daily DJIA with a 7 period RSI.

    The market must have a completed movement up (a close, a higher close and then a lower close).

    The RSI must register a reading above 70.

    The market must then move down (one or more lower closes).

    The RSI must not register a reading below its equilibrium level (50 percent level). *

    The market must then have one more movement up and exceed its previous highest close.

    The RSI must move above the 70 level but should not go above its previous high reading (Point 2)

    At this stage the RSI is not confirming the new high in the market. This is still not a completed divergence sell signal, rather merely a potential divergence sell signal.

    There is one more requirement to go.

    The market must register a lower close than a previous period, thereby
    causing the RSI also to move down below Point 4 – the Failure Swing Point”

    By applying the RSI in such a strict fashions eliminates much of the subjective ‘confirmations’ aka ‘divergences’ that are so common.

    Additionally there are 2 more signals that the RSI can provide of a potential imminent turn.

    As always it takes two to tango!

  • http://evilspeculator.com molecool

    Basically in two words: non confirmation. Applies to almost all momentum indicators/oscillators – including the Zero. I always tell folks that price needs to play ball along with a perceived/momentary divergence.

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

    Perhaps

  • Edd

    old man here trying hard to remember. Was there a wells wilder who wrote a missive on abcd pivot patterns? maybe 30 – 40 years ago?

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

    Edd – unsure if the same person … I am referring to the man who introduced so many currently used, and often abused, ‘technical’ indicators … RSI, Parabolic, Directional Movement to name a few … 1978 from memory … last I heard he had moved to New Zealand.

  • Edd

    Probably not, believe the gentlemen I`m thinking of would be over 100 by now. I remember penciling out abcd pivots/ targets with pencil and the newspaper. How times have changed

  • mugabe

    Come back dick van dyke … all is forgiven

  • Huey

    Here’s just the raw signal on USDCAD only over the past two years; using a stop above/below the extreme and take profit at 50% of the 50 day range. Not saying these are awesome results, but with confirmation (as mole was saying) and prudent management (those are not my trading rules but guidelines) one can make a profit with this signal, which is purely a momentum fader. I’m not as talented as most on this site, but just wanted to back up my trading idea with some data.

  • Huey

    I should buy USDCAD strictly based on Murphy’s Law after publicly posting my reason for shorting it

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

    O’Brian’s Law may come into play as well.

  • Huey

    Unfamiliar with that one, but “the trend is your friend” comes to mind as well

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

    I can relate to pencil and paper routine … it worked a treat … and still can … sadly we are besotted by ease and speed.

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

    O’Brian’s Law – Murphy was an optimist.

  • Edd

    ahh, yes. Oh well into that goodnight one day soon, and I leave it to my kids and grandkids with all their i-gadgets and widgets.

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

    They are indeed ‘inheriting’ a very different ballpark.

  • Skynard

    And some, bulls are back. We could see some fireworks.

  • Edd

    amen

  • newbfxtrader

    I used to trade them myself. I am better off with it now. And without all indicators. At least most of the usual ones are not useful to me. I havent labeled the chart but notice the 2003/2004 support area gave way in 2004 that became resistance 2005 and started a downtrend into 2008. The panic spike in 2008/2009 ended guess where? 2005 high. the 2008 low became support into 2011. 2009 high was resistance recently that caused a PB into 1.2 area but was then taken out. The next logical target is 1.36 ish where its likely to cause a decent PB that would be profitable. Do you really need indicators see what I see?

  • CandleStickEmUpper

    better than a negative number

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

    Huey – the complete saying is “The trend is your friend only if you are making money / R’s … otherwise it is your worst enemy”.

  • Huey

    Agree support and resistance is a useful tool and 1.36 may be a safer area to get short. I use indicators and simple statistics because I can test them and develop a bias I have confidence in. Entry and targets are more manual. USDCAD may push higher but I will still be looking to get short one more time based on my rules and analysis. I need to make a better entry on my next one though since I used up my first one jumping the gun!

  • Scott Phillips

    Thanks for posting real data – I applaud it :-)

    Which indicators did you test in this.

    Welcome to the site BTW :-)

  • Scott Phillips

    This is an INFINITELY better way to play divergences!

  • Scott Phillips

    Well it’s either a bear market, or a high volatility blow off top. We can rule out other options right now.

    The low volatility bull market of the last 5 years is now OVER

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

    Totally in accord that there are many roads to Rome Scott … the concept that I spell out above is the exact way that Jesse presented it way back … naturally applications and ideas evolve beyond the original over time.

    EDIT: This does not invalidate the original concept.

  • BKXtoZERO

    Boy are you in a good mood today.

  • Huey

    Thanks! I was lurking around for a few weeks and saw there’s plenty I can learn here so thought I would join in. For this signal I use a traditional MACD and ROC on two time frames, and some simple range calculations. It only tests well on FX pairs of developed countries, since they seem to mean-revert more often on medium time scales (days to weeks for me).

  • TheRooster

    interesting, i have twice tried (and failed) to build a valid Regression Line system. I now have a half finished regression cross system sat on my pc but stopped working on it for the time being in favour of a bollinger compression system which shows more promise

  • Skynard

    Have a look

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

    Huey – regarding the chart you posted earlier of Price + ROC + MACD … as both indicators use only the Close in their calculations I have found it far better / cleaner to plot the price action as a Close only chart … this can eliminate some false positives.

  • http://evilspeculator.com molecool

    Nobody here today I guess – day off?

  • Bill

    Here.

  • http://evilspeculator.com molecool

    Long $EURUSD 1/4R position size – stop < 1.1107'2.

  • Skynard

    Dollar blowoff

  • http://evilspeculator.com molecool

    Maybe… I’m easing my way in here. No big jumps given this volatility.

  • BobbyLow

    Guten Morgen :)

  • Huey

    Thanks, that makes sense and I’m all for making things cleaner and easier. I’ll give it a try!

  • evilasevildoes

    saving my pennies to join

  • Bernie

    Guten tag :)

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

    Huey – very welcome

  • CandleStickEmUpper

    Here. Looking to go long NQ on a pullback, but remaining cautious

  • Ronebadger

    I just sharpened my two, new #2 pencils for ya

  • ridingwaves

    I see it now, thanks, was looking on daily…It has bounced 4 times from this level though…
    thanks for sharing

  • saltwaterdog

    That gap exists on the continuation weekly, but the weekly NGV5 chart shows a new contract low today and that gap is behind us. so which matters? maybe neither?

  • http://evilspeculator.com molecool

    To stab me with?

  • http://evilspeculator.com molecool

    Zero snappy – buying seems real thus far.

  • ridingwaves

    I looked at 3 different charts to find it but never 4 hour.. I wonder if their is an edge in gap fills as it seems many are left in the dust…while some get filled like they were a magnet for pps

  • Skynard

    SPX 2K

  • Ronebadger

    No…to take copious notes, of course

  • ridingwaves

    I’m selling 1/2 vix short at 1280-5…if they can beat the vix down to 18.00 your number looks good, 21 vix has some support

    operation tame the vix, for bulls its a bitch

    https://www.youtube.com/watch?v=3N0A2b7nbdM

  • Ronebadger

    2K or BUST….literally…

  • Huey

    On the sidelines but 2K+ looks like a great area to get short again

  • Skynard

    Need some major mojo to clear SPX 2080.

  • Ronebadger

    NYSE A/D Vol 12/1

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

    Commodity futures markets generally rotate between contract highs and contract lows … hence all gaps are filled … in the fullness of time … whilst stock indexes rise over the long haul as rotten apples are replace with fresh ones .. and many gaps are not filled … whether or magnet or not … matters not … in any event they can present excellent alerts to be be looking for a reason, or strict setup in my case, to contemplate a campaign.

  • BKXtoZERO

    here but subdued and the word has 2 meanings………………..

  • BobbyLow

    Just a quick Off Topic comment but the Federal Judge in New York that Roger Goodell and the NFL Picked to hear the Tom Brady Case just threw the case out as being totally bogus and completely full of shit and ruled in favor of Tom Brady.

    I am one happy MF today! :)

  • Skynard

    Use them religously.

  • ridingwaves

    brings up the question on what charts really fit commodity futures, end of day spot or ?
    thanks for reply, makes sense and most likely cents

  • Skynard

    Hehehe

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

    R’waves – most active futures is what you trade … or ‘should’ trade … always bear in mind that any leveraged instrument will be more volatile than the underlying cash market … alas cash data for many commodity futures markets is not readily available … eg daily OHLC for sugar or coffee for example … in the bigger picture matters not what chart is used as long as that chart is used consistently … after 1000 trades / campaigns differences will seem like a grain of sand on the beach.

  • SirDagonet

    I just noticed an article about it, Bobby… good news for your boy!

  • SirDagonet

    interesting, simple analysis…
    I’ve never heard of Meb Faber – do you like his work?

  • buysidetrader

    damm zero is good. every time i question it I get smacked. won’t happen again

  • saltwaterdog

    Justice is always on-topic

  • mugabe

    Yes, I do. He’s got a good blog. He’s big on asset allocation and portfolio construction. Check out his books on Amazon. He’s also got a suite of ETFs based on different investing principles: value, momentum, tactical asset allocation . Check out Cambria funds. There’s a good interview with him on Michael Covel’s trend following site.
    Like Andreas Clenow, he’s one of of the good guys. No bullshit and evidence-based.

  • SirDagonet

    Honest question: what’s wrong with this Amazon review of his book The Ivy Portfolio?

    The rest of this review will sound like a hatchet job. Meb Faber is an investing legend and has a lot of useful knowledge to impart. I truly respect him and would consider reading his other works.

    While a decent read for an investment book, if you were to actually follow the advice in this book and invest according to the suggested funds, you would be seriously disappointed. I backtested each portfolio, and they all stink. For example, I backtested the IVY 20 portfolio from 5/22/2008 (the earliest you can backtest because not all the securities were available prior) to 4/17/2015. It suffered its largest peak to trough decline in the debacle of 2008 with a 44% decline, in contrast to S&P 500 loss of 52%. But during the entire test period it significantly underperformed the S&P, by 34%. During the test peiord it had a total return of 15% and annualized return of 2%. The source of the backtest is ezbacktest.com

  • ridingwaves

    that is a detailed review!

  • CandleStickEmUpper

    Shorted NQ 4270 for a scalper

  • BobbyLow

    Totally agree.

    I’ve been a fan of this team for 45 Years so of course I’m biased. I’ve also watched every aspect of this case develop every single day over the past 8 months. The NFL paid $5 Million Dollars for the Wells Report. The Wells report used a company called Exponent for its so-called scientific evidence. The evidence in this report was so weak that a good 9th grade chemistry student could dispute it. BTW, Exponent is the same company that was used by tobacco companies to dispute evidence that ciggarette smoke causes cancer. I believe it was also used by Oil Companies to dispute that oil spills hurt the enviroment. This fucking company is nothing but a gun for hire. BTW, Goodell originally claimed that this was a “Independant Investigation”. Seriously?

    Lastly, even if Brady was guilty, his offense would be the equivalent of doing 66 MPH in a 65 MPH Zone and getting sentenced to a year in jail.

    That fucking Roger Goodell has to go.

  • Edd

    50 years or so a skins fan. can I interest you in rg3?

  • tradingmom

    where the buying pressure stopped…

  • BobbyLow

    Only if they stopped trying to make him a drop back passer. :) As far as RG3’s talent goes it reminds me of back in the 80’s when Coach Raymond Berry insisted on making Doug Floutie a drop back passer instead of a scrambling type QB. It did not work. These guys that are running/scambling type QB’s are successful because of that’s what they do. They have a greater chance for injury but that has to be understood when teams draft them. Having them change their style is a recipie for disaster.

  • Edd

    to late now I`m afraid. injuries, alas….

  • ridingwaves

    hmmm, the junk 10 min chart i’m watching seems to end similar…another inflection point..are we up to 100 pts this summer?

    http://s17.postimg.org/ytn6q22wv/Junky_music.jpg

  • Darkthirty

    algo pressure…..pre holiday pump

  • Darkthirty

    At VWAP now………

  • CandleStickEmUpper

    Covered at 4257

  • Billabong

    Any thoughts on Dr. Copper’s (HG) strength today (currently up 2.5%)?

  • mugabe

    The guy’s math looks a bit suspect to me.

    Have a look at this, which looks at something similar

    http://systemtradersuccess.com/the-ivy-portfolio/

    It only goes as far as start 2012 and covers the Ivy 10 portfolio, but you get the idea

    It’s very possible/inevitable that the portfolio underperformed the SPY after start 2012, especially in 2013, as in that year SPY outperformed almost everything. However, I would be exceedingly surprised if it didn’t post good returns in those years, as we were in a raging bull market.

  • CandleStickEmUpper

    Long NQ 4262

  • Darkthirty

    Still pumping, trying to keep it up

  • Skynard

    Algo gap driven….

  • Malcolm O’Mara

    The
    inventory release at 10:30 was considered ‘bearish’. Yet here we are at 2.7250.

  • CandleStickEmUpper

    got out at 4255

  • Darkthirty

    watching volume on streaming minute charts

  • saltwaterdog

    looked inline to me… what’s the point?

  • Darkthirty

    the gap @16050 DJI?

  • Skynard

    Today’s gap

  • Scott Phillips

    Yes. A vacuum to the top of the trading range.

  • Scott Phillips

    Well done for posting your results :-)

    What was the basis for these trades?

  • Darkthirty

    We’ll see directly!

  • Malcolm O’Mara

    My comment was not directed at you specifically. Apologies. Just my clumsy way of re-stating
    ‘the news does not matter’.

    “The U.S. Energy Information Administration said in its weekly report that natural gas storage in
    the U.S. in the week ended August 28 rose by 94 billion cubic feet, above expectations for an increase of 88 billion.”

    Within 2 minutes of the release, the meat puppets declared it ‘bearish’ and that the morning’s price gains were to be pared. ..not so much.

  • saltwaterdog

    Total agreement on the news-noise. The event does have a way of blowing out stops with OP candles that are well beyond expected ranges if the release is not on the radar.

    I can add to the stupidity of it… here’s the recap I had:

    “Inventories rose 3 percent, or 94 billion cubic feet, to
    3.193 trillion in the week ended Aug. 28. A Bloomberg survey
    expected inventories to rise 93 billion cubic feet to 3.192
    trillion cubic feet.”

  • Scott Phillips

    For me, the continuous contract futures are an illusion, a convenient one, but an illusion nonetheless. It’s laziness to just use the continuous.

    This becomes more critical in contracts that roll over frequently like CL and NG. Also certain contracts are active at virtually any time of the year (November Beans, December Gold).

    Also complicating things is that the official “close price” of the daily charts is not always the last price traded (go figure). In CL for example close price is a custom VWAP formula of the last 5 minutes of pit trading. Also complicating things is that in certain contracts there is virtually untradably low volume (ZT in particular) until 2 days before rollover.

    My personal approach is to do the charting on the contract I am going to be taking. If I haven’t got enough time to rollover to have a winning trade I will trade the following contract (after a check that there is sufficient volume to trade). I personally find that rolling over futures trades is a pain in the ass and stressful.

  • Scott Phillips

    He produced stats. Serious traders produce stats.

    If you start producing stats, that would show me that you are serious about becoming a trader.

  • Billabong

    Thanks.

  • ridingwaves

    thanks Scott your approach seems safer, if you rollover a contract is that a component of your campaign complete with drawdown/risk considered?

  • Scott Phillips

    Looks like its surviving

  • Scott Phillips

    No if I have to rollover a contract I have to choose a point for stop loss on the new contract.

    There are a number of approaches to this. You can say “I risked 20 ticks in September contract, when I roll to December I will place my stops 20 ticks above entry price”

    Alternatively you can use the corresponding inflection points of the new contract (my preferred way), but in doing so you often expose yourself to a slightly higher than 1R loss with slippage etc

  • Scott Phillips

    Algo’s gap driven! Snort!

  • Skynard

    Fuck ya, have not missed one.

  • Skynard

    Market on a mission

  • Scott Phillips

    90% of algos are based on the same group of 6 core concepts. They are covered well in Ernie Chan (who literally wrote the textbook they use in financial engineering programs) blog http://epchan.blogspot.com.au/

    These are things like

    – statistical arbitrage, buying the components of the dow30 in ratio and selling the index when it gets out of whack or vice versa
    – covariance analysis, the mathematical probability of two lines crossing (this is actually the main one) aka pair trading

    – Accumulation algos trying to beat daily VWAP.
    – Scalping buy buying the bid and selling the offer, adding liquidity to the market and capturing the spread
    -Geographical arbitrage. Simultaneous buying and selling for example of GLD and GC Z5 as price gets out of whack.

    There are others, but these 6 strategies are the core of what bot behaviour is.

    I have never ever seen any evidence whatsoever, in even the smallest way, that algos engage in anything like traditional technical analysis.

    We are humans, and always looking to anthropomorphicize things. Bots do what bots are designed to do.

    I always laugh when I see words like “this is clear bot driven tape”. ALL tape is bot driven tape, it is over 70% of volume, how is it possible that it is any other way?

  • Huey

    Totally agree. Price patterns in a traditional sense are typically not important to algo traders. It’s all about infrastructure, economies of scale, and using microstructure to earn a small edge as many times as possible. Biasing a strategy based on technical analysis will likely cause the algo to miss several “good” fills. Like the strategies that Scott mentioned a majority of the them are hedged and directionless and the bot doesn’t care about where price is relative to itself in the past, but relative to a hedging instrument.

  • Skynard

    IHS 5 min (stop run) then we blast off again.

  • http://evilspeculator.com molecool

    And this is why I didn’t even bothered today…

    ..

  • CandleStickEmUpper

    good move. I have a headache with this tape. Holiday weekend B.S.

  • Malcolm O’Mara

    Half off @ 1.75. STOP for remaining @ 1.65.

  • CandleStickEmUpper

    I was whipped out left and right, ended up with loose change profit today, but way too much work for it. Better than negative.

  • OzarkHillBilly

    Great day to be out running errands. Sometimes stepping away from the screen adds a little perspective. Entered a small option position halfway through the day and closed out half before the close for a small profit …. enough to pay some bills, yo. Ironically, I haven’t normally done much intraday trading, but when I go back and look at my rudimentary (better than none) records over the last several months, it appears as if I should be doing more.

  • Darkthirty

    Yer still a bloody looser and ya wear yer mum”s knickers

  • CandleStickEmUpper

    Mostly 5 minute chart’s price/volume action on ES and NQ. Zero helps of course, but if I get a decent profit I will take it rather than wait for something to play out. 90% intraday scalping, I will rarely hold positions over night.

  • RonnieH

    Anyone trading tommorrow?

  • Malcolm O’Mara

    If an opportunity presents.

  • Malcolm O’Mara

    Watching RUSL. 13.00-13.20 is interesting to me.

  • Scott Phillips

    Very solid thor es short for tomorrow

  • Scott Phillips

    Bollinger compression is an extremely solid edge.

    That is where I would operate!

  • Kevin Mcdonald

    What is the best intraday ES and OIL scalpers offered on this site?

    With live signals being issued….

    Thanks

  • Scott Phillips

    No you should be working on a system with an edge, backtesting hell out of it, then forward trading for small size until you can do it mistake free.

    For instance I am forward testing a new system for binary options.

    I trade single lots, risking $20-40 a time!

    $ from wins 616.75
    number wins 31
    total trades 42
    total from losses -664
    avg loss -60.36363636
    avg win 19.89516129
    win rate 0.7380952381
    win rate excluding mistakes0.8571428571
    mistakes 5

    Looking at this objectively – 5 mistakes in 42 trades is KILLING ME!

    So, I took a whole week of my life, made 42 trades, and lost $47 at the end of the week!

    Because I did that with small money I can learn the lessons in a low pressure environment, and ramp up size as I get objectively better. Imagine if I did the same thing, losing $20K at the end of the week? Now the pressure would be on! Would my trading improve under pressure? Highly doubtful.

    The sensible trader only plays for size when success is not probable but guaran-fucking-teed.

    Look at Mole’s sensible scalpius rollout for an example of EXACTLY how winning is done.

  • Bernie

    All ready for it… :)

  • Scott Phillips

    Every day, never take a day off, ever

  • RonnieH

    Thanks for reply, I will observe and wait for opportunity

  • RonnieH

    Thks for reply

  • OzarkHillBilly

    Thanks! I always appreciate the time you take to share your input with myself and others. I have a long way to go and most of my progress lately has been psychological. What I meant to imply above was that upon reflection (and looking at the paperwork) I was often taking perfectly good short term entries in the past and then pissing them away because my ego would get in the way somehow and I’d end up with a longer term money loser. Picked up plenty of bad habits with options in the past, aided and abetted by a nice, steady paycheck.

    Thanks in large part today to you and a couple of other guys, I had an epiphany tonight about building a system around a strategy I’ve considered before. Not sure yet how I’d go about it or if it would even be entirely feasible for me but it seems workable somehow.

  • Scott Phillips

    If your RULES tell you to take a day off then take the day off.

    Many intraday systems do not function well on big announcement days, and NFP is as big as it gets.

    Also, if you cannot find a proper mental state before trading you should take the day off :)

  • Scott Phillips

    I’m happy to help anyone on this board who is serious about system design. Feel free to add me on skype:wealthawareness or email 888rewards at gmail dot com

    All you need is one decent idea, and systematically build a system around it. Not as hard as you would think, but a lot of time. Once you get the first system dialed in, everything becomes a sort of incremental iterative evolution of that. For example the scalpius trade management algo is a tweak of what we use for Thor, which is something we stole mostly off Gabriel’s 15 min systems.

  • Scott Phillips

    On second look could be trying to break to the upside. Probably a coin flip on reflection I must have been biased :)

  • Scott Phillips

    I highly recommend staying current with Ernie Chan’s blog. Many gems to be had in there :)

  • Billabong

    You’re killing me! What about all the talk last year about taking down time to avoid burn out. Keep the ops tempo high during runs and back-off / rest during quiet periods?

  • Billabong

    “The sensible trader only plays for size when success is not probable but guaran-fucking-teed.” I’m always in awe how much can be made with very small trades and no pressure. And how much can be lost with large trades and margin.

  • Billabong

    Thanks for writing about binary options.

  • Richard Foster

    Is success ever guaranteed in a trade? Seriously.

  • Billabong

    Success is never guaranteed, but the probability of success goes up substantially using a back tested system with an edge.

  • Richard Foster

    That I would agree with that wholeheartedly. I always try to see whether a trade has asymmetric opportunity.
    For instance, ES just rejected 1926.5 5 times on a 5m candle. So I am long. Resistance and a down trend line crossing at 1929.25 could have knocked it back down. I saw this as an asymmetric opportunity, but no guarantee of success.

  • newbfxtrader

    Monthly and weekly aint pretty. Keeps making lower highs and lower lows on daily. Good for a bounce though.

  • mugabe

    He’s a machine .. but a different model from Synard.

  • mugabe

    With a mechanical backtested system (with few rules and not over-optimized) you have statistics in your favour *over time*.
    With a discretionary system, you have *objectively* less guarantee of success over time.
    On a single trade, you have no guarantee whatsover, whatever your system. It’s a coin flip.

  • Richard Foster

    No doubt in my mind that a tested and proven system, if you have one, will work out over time in your favour – and could be described as ‘guaranteed’ to produce a result.

    Discretionary trades can work exceptionally well, but very much depend on operator skill.

    My initial comment was only in respect of an individual trade. They are all coin flips – there are only two outcomes. My long trade on ES was a winner and now a loser. Either a system or a discretionary trader could have taken a profit or botched this trade depending on the rules / methodology being used.

  • Richard Foster

    Taking you at your offer Scott. I will email you at the weekend. Thanks.

  • mugabe

    I think unfortunately that a tested and proven system is never ‘guaranteed’ as you never know what the future will bring.
    I think the closest you can get – which I haven’t got – is various tested and proven systems running concurrently which operate on different principles (mean reversion, trend continuation, volatility, etc.)

  • Richard Foster

    Markets and situations change. No doubt. For sure any system has to monitored for continuation. I used the word guaranteed loosely – probably should really be ‘most likely’.

  • mugabe

    Yeah, sure – another thing that is by no means guaranteed is your following the system through thick and thin and thro periods of low/nul activity.

  • Richard Foster

    Operator malfunction – knowing a little of human nature, (and a lot about my own nature), I can believe is the main reason why most systems are abandoned.

  • http://evilspeculator.com molecool

    Dude – who are you kidding – you take 10 vacations a year.

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

    By definition any real or back-applied set of stats / results is based on a closed end sample … hence the path ahead is always occult … they do / can provide a modicum of feel-good reaction … which in itself can be very dangerous.

  • mugabe

    time to call up the local covern, then :)

  • mugabe

    mole often cites this video re sticking with a system:

    https://www.youtube.com/watch?v=ew1L6SLpHgM

    It’s v good – an hour long, but worth it, if you haven’t seen it

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

    I would posit that the lack of a robust RBT that is grounded not in maths and stats is the actual reason … citing human nature is the obvious and easy door.

    EDIT: And a RBT that the operator has spent the time / life to put together and hence possesses it.

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

    ‘Occult’ simply means ‘hidden from view’.

  • RonnieH

    Thanks appreciate your thoughts

  • Richard Foster

    Humans are always looking for excuses for our own failings. Not having a sufficiently tested and robust system could lead to abandonment of the system, while blaming it for not ‘working’ when it fact it was not fit for purpose because of inadequate development.
    Lack of development and testing must be a human factor (laziness, incompetence etc). Either way I think it could be seen as human nature, whether it was a bad system or a bad operation which led to abandonment.

  • Richard Foster

    Thanks I’ll watch later.

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

    Agreed on where the buck stops … as the saying goes.

  • BobbyLow

    It’s not the “size” that matters, it’s how you use it”. :)

  • OzarkHillBilly

    I was giving you a thumbs up on your previous post because of your proper use of the term. In the U.S. at least, any use of the word will make folks think you are some kind of a warlock.

  • OzarkHillBilly

    It’s already helped me out! Thanks again.

  • Huey

    Like your approach to system design and position sizing / money management. I think that is probably the main area in my own trading that needs improvement. I tend to size up too quickly, out of impatience, and then abandon something I worked on for months due to a few large losses. Having a business plan seems like an obvious tool but I’ve just never really done it. Anyway, thanks for the insight and I’ll probably have some questions for you after I’ve had some time to think about this :)

  • OzarkHillBilly

    Just in case anyone is still lurking here, Mole did but out a new post this morning.

  • BKXtoZERO

    Looks like you can blame Gartman for busting you on this prediction: http://www.zerohedge.com/news/2015-09-04/why-copper-collapsing