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Intra-Day Update: WAIT for it!
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Intra-Day Update: WAIT for it!

by The MoleDecember 11, 2008

UPDATE 2:00pm EST: Judging by the recent flow of comments it seems that many of you rats have been wearing the ‘ring of panic’ and thus have slowly turned into Gollum in the past few weeks. I can see you guys now – sitting there glued to the screen with your mouse cursor over the order button – an X-large box of Prozac on your table right next to a few lines of nose candy. Why the heck isn’t the damn zero triggering? Oh, I think I just saw a signal, why is it gone now again? Lunch? I need no stinkin’ lunch – that’s for losers! I’m going to miss the trade of the century, I just know it!

F…ing CHILL!!!

When my rats start chewing the cables and get all unruly on me I usually tell the story of Son Bull and Papa Bull:

Son and Papa Bull are standing on a hill looking down on a valley full of cows. Son Bull says to his dad: ‘Hey dad – why don’t we run down the hill and fuck one of those cows?’ Papa turns to his son, smiles and says: ‘Why don’t we walk down slowly and fuck ’em all?’

Well, you know what the moral of the story is: Don’t let your wife and the local media catch you cow tapping 😉

Now seriously, Berk and I have been trend traders of the turtle conviction for a while now and it seemed to work just fine until the market started going completely loco. As we are not impervious to the dark side of the force we found ourselves caught in shorter and shorter trades. In the beginning the worked out just fine as we were bearish when many were still catching up. But the market usually stays one step ahead of you and it started catching up with us. And so we decreased our trading window even more. Lather, rinse, repeat…

At the end we found ourselves glued to the screen and barely being able to follow nature’s call. Not good – and it was at that point that I decided to change the game because the game had changed us. Thus – the Zero – love it or hate it – seems to be able to tell you what the state of the market is. And if it moves that thing will probably tell you. And of course we love that opportunity to know – but instinctively we also hate it, because we ‘want to do something’. How often have you executed a trade and subconsciously knew it was a crap shoot? Yeah, you rationalized it just fine, but when it went against you (as expected) you knew inside that it could have been avoided.

Listen, if the market doesn’t move we evil speculators are up creek without a paddle. There’s nothing we can do and we have to wait it out. Just read a damn book on charting or go to your favorite nudie bar (that hasn’t burned down). You must have other evil inclinations beyond trading.

That’s it – don’t bug me for crying out loud – wait for it and you shall be rewarded.

UPDATE 6:01pm EST: As much as I hate to do it, I have to praise you damn rats (shudder). The dialog especially in this thread today was light years away from what I complained about a week ago or so. NOW we’ve got ourselves a fracking trading blog, ladies and leeches!

Good show today everybody – I actually saw people think along and not look for easy answers presented by others. I’m proud of you guys. Let’s hope that 875 RL breaches overnight – damn it 2sweeties – why did you put this one in our way? We were just about to go on a roll here… 😉


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.
  • Anonymous

    do the opposite of what you are thinking of doing! and you will come
    out ahead (from Jerry Seinfeld Show, George Costanza)

  • http://zstock7.com/ zstock

    I'm going to go way out on the limb here and say I think the DIA finishes up 1 cent

  • Ukla the Mokk

    mole…point up for the Robert Duvall Colors reference. 😛

  • http://www.twitter.com/TraderTamas TraderTamas

    Wouldn't surprise me.

    The pain comes next week!

  • BigHouse(Aka Mr Vix)

    Still staying long UYG and pounding hamburger meat for Erik's Woppers. I dont believe this sell off.

  • Trader Jose

    First, MC, right on with the chill prescription. The market is telling us that it is walking down slowly to … well, you know the rest of the story and Zero will tell us when to pull the trigger.

    Second, a couple of thoughts regarding the USD and EUR … these may be a little different than the “substantial breakout” mentioned elsewhere.

    While today's drop in the dollar is something to keep an eye on it's important to put it in perspective. This is probably way wrong but it's something to ponder.

    1) The EUR rallied against the $USD from about November '05 to July '08 and gave up the entire gain in 3 months … it's overdue a bounce.

    http://www.screencast.com/users/Trader_Jose/fol

    2) There is a lot of resistance going back to '05 that it still has to chew through:

    http://www.screencast.com/users/Trader_Jose/fol

    3) While it bounced off one Fib fan line it is rapidly approaching that crosses the 1.35 – 1.36 area, toward the top of the previously mentioned resistance band and it is overdue a bounce

    http://www.screencast.com/users/Trader_Jose/fol

    4) What may be happening is not so much $USD weakness as EUR strength as investors flee the British pound in the belief that the UK will join the monetary union to avoid / avert bankruptcy.

    http://www.screencast.com/users/Trader_Jose/fol

    5) Perhaps too that would explain why despite the strength of the EUR vs. $USD, the US equity and global commodities markets, particularly oil, are not reacting to the upside as would be expected and why gold is so strong.

  • buylo

    molecool: ” but when it went against you” (as expected) —-have you thought of building-in a Costanza factor to the Zero?

  • Red

    That bull story always disturbed me. Who goes out and gets laid with their dad?

    Anyway, check out the treasury yields. Those zero's expanding across the bottom make me want to short the sh*t out of this market. Sitting here pretty flat for now though.

    Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
    12/01/08 0.09 0.07 0.44 0.81 0.90 1.16 1.71 2.13 2.72 3.51 3.22
    12/02/08 0.04 0.06 0.42 0.77 0.90 1.12 1.65 2.08 2.68 3.47 3.18
    12/03/08 0.02 0.02 0.35 0.70 0.87 1.07 1.60 2.03 2.67 3.45 3.17
    12/04/08 0.01 0.02 0.26 0.61 0.82 1.02 1.51 1.93 2.55 3.35 3.06
    12/05/08 0.02 0.02 0.23 0.54 0.93 1.19 1.67 2.09 2.67 3.41 3.11
    12/08/08 0.01 0.03 0.28 0.53 0.97 1.27 1.76 2.17 2.77 3.45 3.16
    12/09/08 0.04 0.03 0.25 0.49 0.84 1.15 1.61 2.03 2.67 3.35 3.06
    12/10/08 0.00 0.00 0.21 0.49 0.86 1.21 1.62 2.05 2.69 3.39 3.09

  • b_rad

    it is hard to have complete faith in something you can't touch, don't fully understand, or is supposed to be THE “answer.” Isn't that what religion is? I think the big problem is that without quite knowing how the ZI works/its internals, total conviction is not present.

    But I do understand what you are trying to convey above.

  • Ukla the Mokk

    mole brings up a great point…the market ain't doing shit. Here's a snapshot of SPX…note the trading ranges. It's been said more than once, “I don't know what I'm going to do when the market goes back to normal.” Well, we might be “normal” for awhile, so the good traders better have a game plan. Me personally, if this keeps up, I may go back into credit spreads for awhile so theta can work with me.

    http://screencast.com/t/GddZX5rQTL

  • Thrownaway

    You act like it's weird.

  • BigHouse(Aka Mr Vix)

    Looks like spx is heading down to 880 to fill the gap.

  • MyLifeMyTrade

    What is Costanza factor?

  • kokopelli

    Opinions anyone?

    I have some FSAGX (Miners Mutual fund) in my wife's IRA that I forgot about. I sold some earlier in the year with a nice 40% profit. What I kept, just went positive yesterday with the recent “pop” in gold. Is gold/miners going to just keep playing ping-pong down here (and hence I'll just dump it) or if the market goes higher — it will take the miners along for the ride.

    Any ideas? Thanks.

  • Eric_in_SFL

    At least in a sane market there are fundamentals to follow and some kind of followable trend. With the vix this high anything can happen.

  • Ukla the Mokk

    Holy shit we're so close to a VTA on the zero I think I'm going to tinkle in my pants!!!!!!!

    Where's my coke????

  • Ukla the Mokk

    My only suggestion is to sell the fund completely and invest it yourself. That's what I did. You'll do better than the hacks that manage it more than likely. Regardless, I think we're in the midst of serious chop suey palace type behavior. I don't know what your skill/comfort level is, but you might want to consider managing it yourself.
    Just MHO.

  • hank007

    I like the new zero with the trigger lines. Should work well once this market decides to make its move out of this area. Thanks for all your good work.

  • geckoman

    refresh, breathe, refresh, breathe,

  • molecool

    Okay, forget about the fucking Zero for a second. Now, isn't the above still true? Have any of your indicators that you trust given you a clear signal?

    Some folks just love to complain. I'm building something that can help you bank coin, so either use or not. But don't give me grief about it.

  • Erikd
  • sibekp

    It only tested that 886 resistence, like what 20 times… then it jumped off a cliff. Finally. I need to pee.

  • de3600

    iM FUCKING IN BOO YAAAAAAAAAAAAA

  • Erikd

    train left the station next terminal please!

  • geckoman

    confirmed BB Squeeze on all indexes showing go short.

  • http://zstock7.com/ zstock

    EDIT—whoops!!! the signal broke the other way—I though it would bounce–I will be going short end of day for overnight

  • Erikd

    the limb broke and is falling into the basement of my Bighouse I'm building :)

  • Ukla the Mokk

    I literally laughed out loud. Nice post. And nice avatar. +1

  • http://zstock7.com/ zstock

    wtf–My DEC VIX 55 calls are up +$80—that was supposed to be for overnight—I wonder why the market just tanked?

  • Erikd

    make it a double with that move down today, add some extra cheese please… :>)

  • kokopelli

    I hear what you are saying. My wife had mutual funds, but I totally divested of them in my personal investments. I hate not being able to get rid of them intraday. The stocks within the fund were up 5% earlier today, but now that we are in the final hour, I'm watching those gains slip away.

    No problems trading the money myself. Using the RSI (5) and the ol' 5-3-5 Stocastic, it's clearly not a bad time to sell.

  • TroyMcClureRIP

    jamie dimon on cnbc

  • MaxPainMan

    so do we buy SPX then? since the RL is 874 (even though we don't have confirmation from the ZI yet?)

  • Erikd

    E/S thru S1 and at S2 is going to S3 today?

  • Ukla the Mokk

    Folks, I know we're all shitting tiffany cufflinks over the “sell” signal from the ZI, but don't trade blindly. I'd still recommend caution as we got the signal right at one of 2sweeties' “go long” RT levels. If we got this signal bouncing off of a “go short” RT level, I'd bankroll the farm. But not on this one.

    http://screencast.com/t/zKu5yTWD

  • TraderGirl

    Wasn't 2sweets first level for reversal up at 874.66? Sure would like it to drop more than that.

  • MyLifeMyTrade

    I have 60 calls.. they are up from $65 to $100 in matter of minutes…. Keep this coming….

  • kokopelli

    Is this the “Grand Cross” starting to take effect??

  • MyLifeMyTrade

    I dont think 874 is gonna hold today… we are gonna visit 853 today…. Bears are hungry… they are not gonna hold back at 874… They are gonna use the momentum to take out 874 convincingly.

  • TraderGirl

    Wow, three posts with the same thought at the sametime. Great minds…?

  • de3600

    up 600 on the rut

  • Ukla the Mokk

    There is a lot to be said for 2sweeties' RT levels as well as the ZI. But remember, the only thing that pays is “price.” Stole that from another blogger who I respect a great deal.

  • molecool

    That's right – I only dipped my toe in as I expect some resistance here.

  • http://www.itrade4real.com itrade4real

    The sharp move lower means bullish ideas are off the table, at least through tomorrow morning. I remain flat. Good luck shorts.

  • mikie007

    BRAVO!!!!!! Erikd, I got to dreaming in REM sleep last night for the first time in a long time and a question came through: How low do we go tomorrow – when there are no more buyers? Great analysis and now the fruit of your labors.

  • Erikd

    what was the partyline to the move today?

  • DZZ

    TURBULENCE :)

  • MaxPainMan

    alphatrends?

  • geckoman

    SPY now conforming to down sloping Flag Pattern which could end up being bullish.

    http://www.screencast.com/users/geckoman/folder

  • Erikd

    almost at the next stop XLF 12.00

  • b_rad

    no, no, not complaining, simply echoing why there is such emotion. i agree somewhat about the other indicators, except with them i know what goes in (price data, standard deviations, etc, etc) but with the ZI i have no clue, it truly is a blind indicator, so it is a little harder to follow the signal.

    Again, not complaining, i greatly admire and appreciate what you are putting together and I am behind you 100%, just want to make the comparison. i just wish there were some way i could learn more and help enhance both the creation and feedback of the mechanism. the coin is great, but i feel underutilized mole.

  • Ukla the Mokk

    Barring any major changes, I'll likely be getting into CLF with a put basically at the close…

    http://screencast.com/t/d7JyrQAqGV0

    AAPL looks like a decent short too.

  • de3600

    are you pver on the fslr board

  • Ukla the Mokk

    Yup

  • Duuuuuude

    I agree. Could be the makings of a very ugly bear trap. My chart is basically the same, but I zoomed this in a bit. http://screencast.com/t/E9yHuH8T

  • MyLifeMyTrade

    Out of FAZ and TZA and ERY… looking to go long energy via ERX

  • balljet

    Hey Mole, cool on the Zero, could we perhaps plot a trend line on the white line (since it zigzags) and then exit when it breaks the trend line?

  • MyLifeMyTrade

    874 WILL hold… Going long

  • TraderTamas

    Wonderful!

    $FAZ up 31% $ERY up 14%

    Stop on FAZ is moved up to 20% profit… stop on ERY is moved up to 5% profit

  • http://zstock7.com/ zstock7

    This guy started talking and down went the market
    (JPM 30.57, -2.95) CEO Jamie Dimon said on CNBC that November was a “terrible” month for the company and December has been bad so far.
    http://www.nasdaq.com/briefing/stock_summarynew.stm

  • Erikd

    break thru 12.00 level will put next stop at E/S 850

  • http://zstock7.com/ zstock

    intraday? or overnight?

  • Ukla the Mokk

    +1 for sticking to your system while most others are (seemingly) going bearish. I'm not fully sold on this selloff yet either.

  • Ukla the Mokk

    While I would exercise a great deal of caution, there are a ton of shorts I would consider great. Chief among them are CLF and MOS. X is another possibility. I may actually buy a call on USO (maybe). I'm not 100% sold on this move yet.

  • benji12

    exited my FAZ. phew. that was a nice one!

  • MyLifeMyTrade

    looking to play a small bounce here and get out intraday

  • MyLifeMyTrade

    I see a nice sized bounce up coming into close.

  • Ukla the Mokk

    Another thing I just thought of is this…FWIW…if we continue down tomorrow, I may take it all off the table (or a big chunk). I've noticed lately that over the weekend is when the crooks on the hill work overtime to gin up some good news. It would not shock me in the least if we plunged on auto non-bailout fears only to have CONgress come out Sunday and announce sweeping new bailout legislation that'll get passed.

  • http://zstock7.com/ zstock

    kewl!!!

  • benji12

    sittign right at the 2sweetie support level to go long. watch the S&P 870-875 level

  • Erikd

    we stay below XLF 12.00 and we are heading to 834 tomorrow – minimum.

  • http://zstock7.com/ zstock7

    I’ll go for that scenario–sounds plausible to me!!!

  • minion of the ppt

    Mole. re your comment on the zero chart about using a flat zero as exit signal. Does not sound quite right to me – indecision is indecision. We are extremely choppy right now and so almost any indicator should lag a bit. The sell signal should have been generated later like today during the third daily candle when zero went down but not enough or during the forth when zero went positve again. As soon as we start trending I don't want to get false exit signals just because the trend laster longer than 3 hours…

  • BigHouse(Aka Mr Vix)

    I'm buying more UYG. Fuck it.

  • Erikd

    your going to have to work overtime.. or the late night drive thru.. :)

  • de3600

    yaaaaaaaaaaa

  • geckoman

    May I point out that by my count 3 times the Zero alerted to a short trade by negative divergence. HA!

  • MyLifeMyTrade

    Too much uncertainty and lots of economic data coming out tomorrow morning – going into all cash overnight (for the first time in several months)

  • geckoman
  • SierraSeller

    When the RUT started to roll over as Ad/Dec declined I bot one 460 Dec put. When the confirmed zero signal hit I bot 5 more – at $1.30 each higher – out now at a nice profit. Maybe the early signal is worth trading in small quantities

  • JWBlack

    I had to step away from my computer and then all the action starts. Oh, well.

  • molecool

    Are you trading the options or the underlying ETF? I just looked at the options and they don't look so shabby…

  • Ukla the Mokk

    I couldn't go into tomorrow 100% short, so I bought a call on USO, since I've felt (technically speaking) for several days now that it is due for some upside, which today it got. However, I think the folly in this is that I should have bought a call on something like SPY, IWM, or DIA to hedge myself better.

  • etechpartner

    Reg. the RL – the problem is that it changes so you can't just assign a weight to 875 for example and let it ride. The importance of 875 maybe different tomorrow. Otherwise I would simply say just add a weight to an RL….. but maybe that's a start

  • molecool

    Yes, that IS the problem – as technicians/traders we spent most of our time optimizing during sideways markets and it's easy to align the variables to that. I'll keep thinking about that and invite others to chime in here.

  • grednfer

    What if we close @ 12.?

    Great work on the XLF……my FAZ worked…. was up like 20%

    The RUT had that triangle and it slipped out today and dropped 20+ point……..TZA was rockin!

    What do ya think about the $SPX pattern at the close?

  • molecool

    Well, I was thinking about maybe adding a rule that close to short RLs we take profits and then jump back in when it's breached. The question would be what the percentage is. For instance today – we dropped through it but then bounced back. Of course this is a difficult case scenario as the RL was so close to our entry.

  • http://www.itrade4real.com itrade4real

    Very nice (with the ZERO). I assume it kept you short overnight, correct?

  • http://www.twitter.com/TraderTamas TraderTamas

    ETF

    I don't trade options anymore.

  • molecool

    Always happens – do you have an iPhone or a CrackBerry? You can just check this:

    http://evilspeculator.com/zero/zero.png

    There you go – your lifeline to the market.

  • http://www.twitter.com/TraderTamas TraderTamas

    I can deal with that.

  • Erikd

    I have posted my channel here that we have been in for 60+ days now. the 2 inside days we just broke lower out of today is very SIGNIFICANT. In the next month everyone else will understand what that meant, but we are going way lower from here . the close on the XLF below 12.00 means we will see 830's tomorrow minimum.

  • malusDiaz

    This just in: Newb makes first profitable paper trade!

    Thank you Mole, Berk, and all the rats that teach!

  • Erikd

    the seas are going to get rougher from here. :) sad for our country though.

  • minion of the ppt

    As my avatar depicts Gollum, I've degraded rather fast. Missed the trade of the century today as I was away from the machine and zero did not tell me to stay home. I'm desolated and I'll burn the bar.

  • http://www.twitter.com/TraderTamas TraderTamas

    I know… I am excited and scared at the same time.

  • Erikd

    normal 60 year cycle we have been going thru for 200 years. next 10years will born new wealth for those who can see the light at the end of the black tunnel.
    look at all the ultra wealthy families today, alot of them came out of the 1930's with it. GOOD LUCK! tune out the noise, and stay focused…

  • Keirsten

    Turtle Traders huh? I was just eyeballing the turtle channel last night. 😛 Nice strong signal on the Zero.

    Mr. Vix- you'll get your pound of flesh soon enough from UYG methinks, and when it takes off, look out!

    Congrats to Tamas- nice setups.

    Took half my shorts off (sounds kinky, doesn't it?) and will play with the house money tomorrow.
    I give less weight to GS these days as a barometer, but I'm sticking with what I think will happen pre-earnings on the 16th.

  • minion of the ppt

    As I mentioned yesterday I'm working now under the assumption that major RL levels cannot be breached when Zero is not aligned with the move, but zero does not indicate a successful breach when aligned. Think of a RL level as a stone having some unknown weight. zero approaching it has the potential to move it aside if it is aligned with the move but if it is not you can be very sure the market cannot push the resistance aside. To calibrate zero with RL strength you'd need a huge pile of data…

    A way to play it might be to change position size.

  • moneyfarm

    I'm in SDS form the Zero signal today. Thank you for all of your work on this Mole. Just a thought, but if it can be determined that there is any use in observing the trend of the Zero (making higher highs, lower lows after a VTA is given) you may want to correlate this with RT levels. For example, if the Zero has given a VTA but trending against you and a RT level is hit = sell signal. Obviously this would need to back tested.

  • Trader Jose

    Agree with you minion w respect to the answer being position size … not sure how you'd automate that.

  • JWBlack

    I appreciate that.

  • etechpartner

    That sounds like an interesting idea… maybe start w a small pos on an early signal… increase to full on a confirmed signal and decrease if it approaches a major RL like today. Thats pretty much how I played FAZ today. I started w 25 shares when it first broke, added 25 when zero issued an early signal… added 100 when it became a full signal and took some off at the end of the day. So I am back to holding 25 overnight.

  • JWBlack

    Yeah, in the heat of the moment it is hard to make good decisions. I try to make them ahead of time, but I'm always away from the computer when I need to execute them.

  • http://www.itrade4real.com itrade4real

    Got it, thanks. I’m not on board (I’m flat) for this one, but quite a nice
    sell-off for the shorts this afternoon.

  • JWBlack

    You must be either a monk or a physicist.

    A combo of the two might be called a philosopher.

  • drjain

    It seems like we are cutting through that RL afterhours. Seems the Zero knew that RL was going to fall!

  • JWBlack

    If you follow it religiously, you should be short overnight.

  • Uncle Festus

    Mole:

    With your backtest, (although its a little difficult to tell) it looks like you took the trade at the close of the first hourly bar that closed in the opposite direction…which is different than what the trade signals are showing on the current chart. The current signals show a trade at the close of the 2nd hourly bar that closes in the opposite direction.

  • benji12

    futures getting slammed!! ES at 863

  • hank007

    Thanks for posting the signal. I tried to play it with SDS, but by the time I could place an order, SDS had already made a significant move. I bid SDS at support, and the order did not fill, but I would rather do that than pay too much.

  • DZZ

    I'm waiting for the automated text messages… :-)

    Thanks to ZI:
    Stayed in FAZ and SCC trades (great call Erikd)
    Successful with quick DUG trade and exiting DXO
    DZZ still setting up for a short, but being a patient rat.

  • gagelle

    I feel like this is the first time I completely understand the zero. The refresh utility works great. Now I wish i knew more about futures. Thanks again molecool. You have another subscriber.

  • Saht

    Thanks for the continued 'new and improved' Zero's. I try not to think when trading and I like any indicator that takes the think work out of trading. I haven't actually used it yet because I still favor the Stochastic and RSI on the 15min chart for entries and exits but since I'm long TZA I was happy to see that the Zero stayed in the short zone at the close.

    If we gap down in the AM, for whatever reason, I will unload my few shares of TZA and see if the majors hold the 20 DMA.

  • molecool

    Keep waiting – I would do it if ThinkScript was a 'real' language but there is no way I'm doing this manually – LOL.

    Also, I think this might expose me to regulatory issues, so I don't think this will come any time soon.

  • sibekp

    Erik… can you post that chart here. I would love to see that…Thanks

  • molecool

    “I'm working now under the assumption that major RL levels cannot be breached when Zero is not aligned with the move, but zero does not [guarantee] a successful breach when aligned.”

    That is actually the question – maybe it depends on the 'force' of the move and the probability of the RL. 2sweeties has provided us with daily RLs and their probabilities. On my end I know what the approximate strength of the move is, so I can maybe correlate those two. Let's say Zero is going gangbusters and is showing a -3 signal on a down move. Here comes 30% probability RL – I think chances are Zero is going to stomp on it. If the roles are reversed Zero might be toast and we might get a snapback.

    I already have a separate script that shows the RLs. I could potentially do my daily homework and add 2sweeties' RLs in the morning. internally Zero could perhaps correlate the probabilities and throw up a flag (i.e. another histogram). OR, I could add a 2nd derivative of Zero as an upper strategy and somehow change the line color based on a) the probability of the RL and b) the computed probability that Zero is going to get past it.

    What do you think?

  • BigHouse(Aka Mr Vix)

    and getting worse.Expect a big down opening Friday. I will be at burger king making woppers. Stop on by and kick me in the face.

  • molecool

    He's a cross breed between Bill Nye and a Shaolin monk. Lethal combination – better watch out.

  • Chris

    I too have been interested in trend trading since The Way of the Turtle. I've used various trend following systems, mainly a version of the MA crossover, until it stopped being successful. That's because the trend had changed. So I switched from crossover to crossunder and was back in business. You have to keep analyzing your system and how it performs in various markets and trends if you want to be successful. Any thoughts on providing the code for Zero or pointing us in the right direction of making it ourselves?

  • molecool

    Well, unit stacking is something the PTAs (pyramid trade alerts) are supposed to tie into. You take out a small unit on the first ETA or VTA. Then you get a PTA and you add, rinse lather repeat. You are long and you get a new VTA after a zero touch you add another one, etc. You basically let the market tell you that you are right.

  • molecool

    Trust me Señor – IF there is a way my devious little mind will figure it out.

  • molecool

    “I've used various trend following systems, mainly a version of the MA crossover, until it stopped being successful.”

    EXACTLY – and as you know from all trend trading systems this one back tested as being No. 1. Similar news on the donchian channel front. Berk and I actually started trading the turtle soup system (i.e. failed outbreak) and our first trade was successful.

    Anyway, the Zero is supposed to up the ante on trend trading. Right now you need very deep pockets and nerves of steel to survive as a trend trader. I am trying to build something that works on a medium and longer term basis.

  • kzhat

    Zero must have gotten advance warning that BofA was going to gut its workforce 😉

  • molecool

    That's right – send me your mon-aaaay!!! 😉

  • molecool

    Yes, part of the variables in the indicator is the misery level of banking employees.

  • toad37

    Cramer whining about how they “should get rid of bear ETF's”…. too funny.

  • BigHouse(Aka Mr Vix)

    He gets worse and worse.

  • BigHouse(Aka Mr Vix)

    For a down day i have notice that volume was not very big. Anyone see this?

  • Chris

    Yea, I tried myself a while ago experimenting with various indicators to enter trades but found, in general, the more indicators I used the more complex and less reliable it was (not to mention you may never take a trade). Everyone is in search of the mother of all indicators, but you have to remember the principle of parsimony – keep it simple stupid (kiss).

  • toad37

    Totally…he is running out of excuses to bail him out of his bottom calls.

  • http://www.twitter.com/TraderTamas TraderTamas

    Thanks! Yeah, livermore had mansions during the GD!

    I do feel fortunate to be able to have money to invest and also being so young right now. You are right; we do have a great opportunity ahead of us if we keep our eyes on the ball.

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Erik,

    Thought you might be interested to checkout the chart I just posted on xTrends here. IMO it supports your call.

    http://xtrends.blogspot.com/2008/12/gold-bugs-f

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Heya all,

    The gold bugs might be raising the alarm that a big fall is coming.

    See here: http://xtrends.blogspot.com/2008/12/gold-bugs-f

    Just one piece of the larger puzzle, for what it's worth.

    Cheers

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Yes, I noticed. But it's early days yet. I wouldn't be going long at this juncture just on that figure. Tricky market. Wants to keep the mystery until the last microsecond.

  • Skates

    Would you be able to post the ThinkScript that displays the current RLs? It would be a nice tool for all of us traders to have.

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Zero indicator is shaping up well, Berk.

    Sad you haven't provided some kind of email or similar alerts system for us losers in the opposite timezone…. but never fear… I took matters into my own hands and all is well. :-)

  • bearish_on_bull

    I think I'd like to talk to you about joining into a fund with a fully automated trading system if it tests well. It sounds like a very nice confluence of approaches.

  • BigHouse(Aka Mr Vix)

    With all the big players already closing out there books for the year, can the speculators have the power to take the market to new lows in December without the big boys?

  • bearish_on_bull

    although I respect your trading instincts greatly, I must say you sound like you're trying to convince yourself a little too much. the macro trand is very very bearish, the charts look bearish today. banking on a counter trend rally is the dark side of the force now. stay on the good side and be safe, forget about the ppt, just remember gravity.

  • molecool

    I actually built it but I let Berk know 😉

  • molecool

    True that – everyone needs to trade the indicator(s) they like. For me zero is working out quite well – not sure if it's the mother of all – only time will tell.

  • molecool

    Are you running anything like a fund now? Prior experience?

  • molecool

    “I must say you sound like you're trying to convince yourself a little too much. “

    He does that alot – that's Ukla. He'd be 10 x more successful if he would stop thinking in 20 different directions and just look at the charts.

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Geez…. my apologies… I must be tired from staying up all night watching my zero indicator page refresh LOL….

    But now I've trained my Peruvian house boy it's all good. He watches it for me, and when he sees the signal he plays a rather intriguing version of Enter Sandman in Spanish on his miniature guitar…

    But you gotta stop fecking with the zero indicator markings. It takes ages for me to retrain him, especially because my python… er… spanish… isn't that good.

  • http://evilspeculator.com Karhu

    mole, berk:

    Even with that strong short VTA, can you really consider this http://evilspeculator.com/wp-content/uploads/20… as broken?

    We're now at 873. We *should* still go slightly lower for something like that to play out, right?

    Although still having the mindset compatible with my avatar for the long run, I think I'll buy in some more BGU
    2SWeeties' style around at least a few of strong RL's, ~843 maybe being the last stronghold.

    Feels awful, please someone talk me out of it :)

    Cannot shake off the possibility of something like Mr. Mokk's remark:
    'It would not shock me in the least if we plunged on auto non-bailout fears only to have CONgress come
    out Sunday and announce sweeping new bailout legislation that'll get passed.'

    In any case, all the not-so-pro evil followers like me out there, I do recommend you read this once again:
    http://evilspeculator.com/?m=200811 and consider how long sweeps are worth try & play.

    cheers,
    Karhu

  • MyLifeMyTrade

    Futures tanking…. dipped my toe into a bit of SSO for over night AH @ 24.20… lets see how this plays out…

  • MyLifeMyTrade

    Futures tanking…. dipped my toe into a bit of SSO for over night AH @ 24.20… lets see how this plays out…

  • minion of the ppt

    Guessing here as neither you nor 2sweeties are sufficiently verbose about the inner workings of the magic stuff… 😉

    It could work if
    – the zero strength can be qualified well enough. Are we looking at last minute's strength, an average or a change in strength over time?
    – the market strength before the RL is a good indicator of the strength at or better around the RL level. Depending on different trendlines, MAs etc a RL is a cluster of stop-loss/buy orders. I don't know if the move towards this cluster can be used to estimate the quality of the resistance at the level. Likely that the change in zero readings during the approach can be an indication, maybe volume. A MM in the team would be helpful 😉
    – meaningful probabilities can be calculated and backtested

    Given the limitations of the TOS language and its limited analytical capabilities I'd suggest to keep an eye on it first, taking some notes to develop a more precise hypothesis about causes and effect and to gather supporting data. Testing eg accepting/rejecting this hypothesis would be the next step before finally coding it.

  • minion of the ppt

    Guessing here as neither you nor 2sweeties are sufficiently verbose about the inner workings of the magic stuff… 😉

    It could work if
    – the zero strength can be qualified well enough. Are we looking at last minute's strength, an average or a change in strength over time?
    – the market strength before the RL is a good indicator of the strength at or better around the RL level. Depending on different trendlines, MAs etc a RL is a cluster of stop-loss/buy orders. I don't know if the move towards this cluster can be used to estimate the quality of the resistance at the level. Likely that the change in zero readings during the approach can be an indication, maybe volume. A MM in the team would be helpful 😉
    – meaningful probabilities can be calculated and backtested

    Given the limitations of the TOS language and its limited analytical capabilities I'd suggest to keep an eye on it first, taking some notes to develop a more precise hypothesis about causes and effect and to gather supporting data. Testing eg accepting/rejecting this hypothesis would be the next step before finally coding it.

  • BigHouse(Aka Mr Vix)

    Yea dow -180 S/P -22

  • MyLifeMyTrade

    Forgot to add that I have some cheap VIX calls to act as a hedge… Got into $60 VIX DEC calls when VIX was near LOD… Tomorrow VIX should spike.

  • minion of the ppt

    and an additional thought – as long as the rejection does not change zero from buy to sell does it really hurt to bounce off?

    Probabilistic systems do not lend themselves too well to binary decisions, so as others have suggested a well considered strategy of scaling in and out of position might be the best solution.

  • minion of the ppt

    and an additional thought – as long as the rejection does not change zero from buy to sell does it really hurt to bounce off?

    Probabilistic systems do not lend themselves too well to binary decisions, so as others have suggested a well considered strategy of scaling in and out of position might be the best solution.

  • minion of the ppt

    and an additional thought – as long as the rejection does not change zero from buy to sell does it really hurt to bounce off?

    Probabilistic systems do not lend themselves too well to binary decisions, so as others have suggested a well considered strategy of scaling in and out of position might be the best solution.

  • minion of the ppt

    and an additional thought – as long as the rejection does not change zero from buy to sell does it really hurt to bounce off?

    Probabilistic systems do not lend themselves too well to binary decisions, so as others have suggested a well considered strategy of scaling in and out of position might be the best solution.

  • C.C. Rider

    Watch out below if 840 SPX doesn't hold.
    http://www.screencast.com/users/texana44/folder

    I noticed these three vix touches last night. Almost go invalidated today.
    http://www.screencast.com/users/texana44/folder

  • C.C. Rider

    Watch out below if 840 SPX doesn't hold.
    http://www.screencast.com/users/texana44/folder

    I noticed these three vix touches last night. Almost go invalidated today.
    http://www.screencast.com/users/texana44/folder

  • C.C. Rider

    Watch out below if 840 SPX doesn't hold.
    http://www.screencast.com/users/texana44/folder

    I noticed these three vix touches last night. Almost go invalidated today.
    http://www.screencast.com/users/texana44/folder

  • C.C. Rider

    Watch out below if 840 SPX doesn't hold.
    http://www.screencast.com/users/texana44/folder

    I noticed these three vix touches last night. Almost go invalidated today.
    http://www.screencast.com/users/texana44/folder

  • kzhat

    That is why I couldn't re-create it on my own! I'll have to call the folks and TOS and get the ticker for banking misery levels… That should do it! :)

    BTW, excellent work. Loving the indicators on the chart! It looks like your working around the thinkscript annoyances pretty well.

  • kzhat

    That is why I couldn't re-create it on my own! I'll have to call the folks and TOS and get the ticker for banking misery levels… That should do it! :)

    BTW, excellent work. Loving the indicators on the chart! It looks like your working around the thinkscript annoyances pretty well.

  • HuckFinn

    Mole,

    Used the Zero for the first time today. It's a friggin' Porn Star! Pick-up SPY PUTS for a quick trade, 13% profit!

    Huck

  • Loren1711

    This is a response to a post I made this morning, but was a couple threads back, so I am not sure if it will be viewed. My initial question may have been misinterpreted just slightly.

    I was wondering why the zero seems to print certain values (as it did this morning, and yesterday morning) and then revise itself shortly thereafter.

    Example, yesterday morning at the bell, the zero took off, shooting through the +1 line. As of right now, it shows that it took off, but reversed short of the +1 line.

    As to the response about other indicators, do all other indicators do this? I thought that once an indicator reached a certain value, that print, at the respective (x,y) coordinate stayed. (unless it was a misprint)

  • JWBlack

    Too mnany people are too confidently bearish.

    If you shorted at today's close, and if the market gaps open lower tomorrow, great! You should cover.

    I trade short-term all the time, and this is why the ZI is so fascinating to me, but the intermediate term stuff I look at is saying the big money comes from sitting long.

  • Ukla the Mokk

    I'm definitely not one of them! While my positions are 75% bearish, I'm not confident yet. HOWEVER, I wrang my hands with evil snickering when I saw the /ES continued to drop like a rock in after hours. As of this writing it's at 851.25. A lot can happen in the next 14 hours though, so I remain cautious. I too believe that buying the dips is safer than selling the rips in this market environment.

  • JWBlack

    I think I recognize you. Have we taken a 3-hour tour on a boat before? Or maybe you were a Hun?

  • balljet

    Hey Mole, that zero indicator is pretty awesome. It does remind me somewhat of the woodies CCI, are you familiar with that?

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    I get the Atilla reference (I think)… but not the boat tour bit…

    Feed me some more clues… this is fun!

  • JWBlack

    Correctomundo — buying the dips is most likely the thing to do until the New Year.

  • Ukla the Mokk

    I guess I'm a cynic of the market. I agree that the macro trend is very bearish. But we all know that bear market rallies can come with little or no warning and can be voracious. I guess I'm just trying to be prepared for whatever the market may tell me to do.

  • Ukla the Mokk

    I think I'd be a much better trader if I entered trades with a little less emotion and a little more patience. I'm working on it. I like confirmation with a few indicators but am trying to keep myself from overdoing it which causes missed opportunities.
    I'm taking your comment to heart though…thanks!

  • JWBlack

    If your avatar is not Gilligan, it is a splitting image.

  • BigHouse(Aka Mr Vix)

    Looks like that Madoff guy scamed alot of wealthy investers. Sad news. I guess that added to the sell off today.

  • JWBlack
  • de3600

    Sad they should take him out back and shoot him like a dog and save taxpayers the money of a trial

  • Chop it up

    ah is anybody trading the sp overnight……LOL – do you have any idea where it is right at this moment!! – 854.50 with a low of 850.50…Yup…:)

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Geeez… I really am tired…

    Yes, it's Gilligan. First one to mention it.

  • BigHouse(Aka Mr Vix)

    http://4.bp.blogspot.com/_N_BS-1Z6enI/SUG1toOmg

    Got this from another bogger. I am posting this b/c we are right at the green support line going back from the lows at 739. If we close below 850 Bighouse will dump his UYG and join the shorts.

  • molecool

    Yes I am – a trader friend of mine (commodities trader) uses that one religiously. I personally don't use it much.

  • molecool

    Would you call it a 9-incher?

  • molecool

    “Even with that strong short VTA, can you really consider this http://evilspeculator.com/wp-content/uploads/20… as broken?”

    Why would that be broken? This is just an idealized pattern – do you really think I have a crystal ball and can call the market by a matter of points weeks ahead? I wish!!!

  • http://evilspeculator.com molecool

    “But now I’ve trained my Peruvian house boy it’s all good. ”

    When I saw your first comment I was actually about to post a joke along those lines. Thought about you forcing your first born to stay up all night on uppers and a crack pipe. So, you posting this just had me under the fucking floor – LOL :-)

  • etechpartner

    what setting cci is it?

  • BigHouse(Aka Mr Vix)

    Hes 70 years old. Wish he was 25.

  • MyLifeMyTrade

    I went long /ES big time at 852. We will see how this plays out. There is no real reason for the massive drop AH. Expecting a very small gap down near open which should get filled.

  • HuckFinn

    Might go 12………

  • C.C. Rider

    Mr. Bear, meet Mr. Bradley. He's been very, very good to me. It's all about polarity!!!

    http://www.screencast.com/users/texana44/folder

  • Erikd

    here is the playbook, keep me posted on how this plays out in the coming weeks. :) http://screencast.com/t/n1slgF4lW

  • stopsarein

    Nice trade.. Here is how i see it.

    http://stopsarein.com/wp-content/uploads/2008/1

  • http://www.evilspeculator.com berkshire

    CLEAN CUPS!!

    Skål!

  • BigHouse(Aka Mr Vix)

    Good trade. s/p coming back. Now at 858. I think its down 16.50 and fair value is -3 and change.

  • http://www.evilspeculator.com berkshire

    I agree with Mole. Both of us merely put ahead what we believe to be the highest probability counts, and/or patterns of movement. ANY forecasting cannot be held rigid, and must have RULES by which it can be adapted, otherwise it has no purpose.

    We stick to some very rigid rules about our analysis, and do the best we can.

    If you are going to do it 2Sweeties style, make sure that the amount you purchase at this lower level is larger (and by enough to matter) than your previous purchases. This is the best (really only) way to make a profit, or break-even by dollar cost averaging to the downside. If you have conviction, go with it.

    Skål!

  • Erikd

    You already have a goldstar coming…. :) thanks for your input !
    keep the road signs coming as we take this journey that started today. going further into the black tunnel. see you along the road heading south.

  • http://groups.google.com/group/monitoringthemadness/ johneeboy3

    Glad I made you laugh! We share a similar twisted sense of humour, methinks. God knows we need a lot of it these days.

  • b_rad

    I would be interested in the script for the RLs as well. I'm trying to learn more about these coding shenanigans thanks to you mole!

  • cabben

    Please forgive my ignorance. What is a Pyramid Trade Alert?

  • FerdtheMoonCat

    Mole, wonderful work as always. After reading above, suggest adding a bell feature that dings twice on a greenie, once on red. Eagerly await developments, ho ho, get some rest. Meanwhile short SDS with both hands, stopped @82.

  • http://www.evilspeculator.com berkshire

    Pyramiding refers to adding additional units in one direction. For example. If we were long with SPY 85 Calls on our first order, with the PTA, we would add another unit to either 85 calls, or an equal amount of $$ to a different call position.

    Essentially, you build your position in the beginning of the move and start scaling out somewhere after the expected mid-point. This is a cornerstone of trend trading.

    BTW also, CLEAN CUPS means new post…

    Skål!

  • balljet

    long 14, short 4 false, 750
    What do you use?

  • etechpartner

    hmm looks like i was thinking of another indicator (it sounded like something avail in stockcharts.com). Is yours posted somewhere, I'd like to check it out

  • bearish_on_bull

    Call to discuss, 786-437-5088.

  • balljet

    If you have TOS, it is in the studies. I use the standard parameters.

  • etechpartner

    hmm looks like i was thinking of another indicator (it sounded like something avail in stockcharts.com). Is yours posted somewhere, I'd like to check it out

  • bearish_on_bull

    Call to discuss, 786-437-5088.

  • balljet

    If you have TOS, it is in the studies. I use the standard parameters.