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Keep Your Powder Dry
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Keep Your Powder Dry

by The MoleAugust 10, 2017

Considering that equities are still trading a bagel throw away from all time highs it was fascinating to observe a 28% rise in implied volatility over the past week. Now I concede that current levels are probably more in line with where the VIX should be given that we’re heading into a seasonally bearish market period of the year. August has acquired a bit of notoriety over the years due to a handful of negative outliers, however on average it is September and not August that you should be worried about (see Tuesday’s post on the subject).

2017-08-10_VIX_VXO

I would be lying if I said that the thought of a meaningful correction hasn’t crossed my mind. After all we are trading near all time highs, momo indicators like my VXV:VXO ratio are starting to signal the potential of some bearish tape ahead.

2017-08-10_VIX

Clearly market makers are getting a bit more antsy with the VIX pegged near 11. So are we going to see single digits again soon?

2017-08-10_VX

The VX futures currently suggest a retest of the previous lows but in my experience a quick spike higher usually is followed up a few days later. I think we’ll have to see where we close the week. If we dip back into single digits then it’s possible that this was nothing but a little shake out of some weak hands.

2017-08-10_spoos_daily

Let’s put things into context on the pricing side. Clearly it seems that a 30 handle drop on the SPX must feel like a raging bear market to some younger market participants. But obviously prices have not given us any true indication that they are ready of reversing. Yes there are some cracks in the armor but I could have pointed at those several weeks ago.

2017-08-10_spoos_inflection

On the short term side our big inflection point right now is around 2474.  All the bears have to work with at the moment is an exhaustion spike followed by a little bounce.

2017-08-09_zero

Which for the record wasn’t accompanied by anything resembling a bullish signal. That is a potential door the bears will have to walk through however. For now there is the potential for downside but price needs to point the way. More weakness today or perhaps a quick spike higher followed by more weakness would get me more interested in taking out some lottery tickets.

2017-08-10_spoos_volume_profile

Beyond lottery tickets I would have to see a breach of 2450 followed by a retest – the proverbial last kiss goodbye. Again for now we remain inside that volume island that has been accumulating for the past few weeks.

Bottom Line

There currently is a window of opportunity for the bears to drag equities lower ahead of what seasonally is considered a bearish market period. If you have taken out some long term puts back when the VIX was dipping below 9 then IV alone should have greatly benefitted your premiums and offset any loss in time value. Which was the idea in the first place: NOT having to burn trading capital picking highs but establishing downside protection when insurance was available at a discount. For now a few short term puts as lottery tickets are worth a shot but I discourage you from ‘backing up the truck’ just based on a whim. Although premiums should rise on a quick dip lower the odds of success are much higher on the almost obligatory retest.

Currencies

2017-08-10_DX

Meanwhile the Dollar index is looking like it may actually try to make a run for it. That series of higher highs and higher lows is starting to resemble an early  floor pattern.

2017-08-10_USDJPY

However I remain a bit skeptical as the USD/JPY continues to point downward.

2017-08-10_EURUSD

The EUR/USD meanwhile is also pointing down (with the USD being the quote currency). Don’t get me wrong, I’m not complaining, however unless I see the USD/JPY gain strength I don’t think we are going to get a bonafide rip-your-face-off Dollar squeeze.

Campaign Updates

2017-08-10_gold_update

A strengthening of the USD/JPY of course would quickly put a damper on our ongoing long campaign in gold. Thus far it’s looking very promising, especially after it sliced through a daily NLBL near 1275.6. If the Dollar was still heading lower, like a week ago, then I’d be certain that gold would make it all the way into 1300. For now however I’m raising my trail to near the upper 100-hour Bollinger to lock in a bit of profit. Easy to over think the situation which then leads to trading one’s opinion/worries instead of the tape in front of you.

2017-08-10_crude_update

Crude is starting to look increasingly promising as it’s produced quite a bit of context over the past few days. Of course it’s not time yet to relax as it yet has to actually make a run for it. For now I’m leaving my stop where it is – which incidentally was well chosen if I may say so.

Two more goodies below for my intrepid subs. If that’s not you then don’t waste time and sign up for a Gold or Zero subscription right now:

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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.
  • Tomcat

    https://www.youtube.com/watch?v=9nSWc43TLaI
    These bears have got nothing…aint scaring anybody

  • Tomcat

    Does anyone else see a cup and handle formation in Gold?

  • Mark Shinnick

    Ok, local objective reached in Vol, so flat for now.

  • HD

    The /VX went exactly .618 back into EOD yesterday- HH today. Wave wanky. I’m starting to like them. They pay well too.

  • HD

    1% gap down GOOGL confirmed what I was seeing yesterday. It’s correction is now 2 months old. Lots of fibs in the 800’s

  • Ronebadger

    I’m glad there’s some grizzlies to rent whenever you need one…

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

    crossing the line – in my lens.
    it could reverse tomorrow.
    who knows?
    “have a plan, trade the plan”

    http://stockcharts.com/h-sc/ui?s=GOOG&p=D&yr=1&mn=2&dy=0&id=p05733102601

  • OJuice

    2458 was the lower 20 period BB on ES daily. Had my eye for a potential dip buy there. Lucky for me, the Zero cautioned against it.

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

    Reentered, last local objective reached, flat.

  • Mark Shinnick

    Yes. Just have see about all getting unglued…. small exit out thing.
    We’ve now met the shorter term objectives.

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

    if I squint real hard, I see India. w/Mayanmar (Burma is much easier to pronounce)

    http://www.nationsonline.org/bilder/map_of_india50.jpg

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

    High Yield, they’re getting serious now.

    but for now, ’tis just a scratch.

    https://uploads.disquscdn.com/images/1d6d935cc538a60656903ab5f7adcf8ce689c31326974ab8d1cb8e1c3ec1bce4.png

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

    …it was really quite satisfying :)

  • Mark Shinnick

    Gotta have those lazer guns in that fight.

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

    Very consistent OPEX pattern this year. Setting up low before. It should feel terrible to buy em. Start small and let the low prove itself. 2451 to 2461 is doable. Very OS

  • ridingwaves

    ridingwaves HD a day ago
    it would seem SPY could find 245 if these machines believe in going down, wash out low at 244.30
    funny though as bio indexes might have washed out already…

    got one right, one wrong, bio is still washing out..

  • ridingwaves

    the widow maker is waking up….read yesterday inflows into 3x UGAZ are the highest this month for hedge and PE….thank god for browser history..
    http://www.marketwatch.com/story/seeking-waves-to-ride-traders-ditch-stocks-for-commodities-2017-08-09

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

    XBI, is that a fair assumption?

    breakout at 72, pullback to test. weekly.

    http://stockcharts.com/h-sc/ui?s=XBI&p=W&yr=2&mn=0&dy=0&id=p73503158370

    EDIT: volume hole?

  • HD

    Dude! dead on. Nice work

  • Ronebadger

    Trend day?

  • Mark Shinnick

    In my view, getting there soon, the longer we dwell here the more likely of greater volatility.

  • Mark Shinnick

    One EZ tool here is to take current volatility high, which is the calculated objective, and place a realistic ATR zone around it.

  • StockTalker

    Rut Roe

  • Mary

    define realistic …

  • Mark Shinnick

    If one is operating at this battlefield, each will have their own judgement; no 2 events are usually exactly similar but for the sake of simplicity only to make the point one could use a 120 min volatility atr for the last few periods. Realistic implies that the range neither be restricted by recency bias of prior no-real-battle conditions nor bound by underestimation of the nature of what’s now happening.

  • ridingwaves

    good to be lucky…seems you, Mole and I are looking for that 2445 area. it could wash out on futures there pvernight and then head back up…

  • ridingwaves

    yep, seems IBB in similar pullback to test 305 area…

  • ZigZag

    Can’t believe my stupid Windows update left my monitor settings all buggy. I hate Windows.

  • Mark Shinnick

    Yes. I don’t permit any automatic updating, and select updates only after they have aged for a little while to see if others are reporting problems.

  • HD

    /VX little barrier triangle 14.25 enough to try a S, SPX 2450 and noon could suck some volatility out.

  • ZigZag

    Problem is I only use the Windows computer for trading and I’m not that familiar with Windows anymore – I’ll be spending all afternoon in chat with the Nvidia people going “where do I find that menu key?”

  • ZigZag

    WASDE report took care of the grains.

  • Tomcat

    If you need to squint to “see” the 8th largest country in the world, then I recommend a brand new set of eyes.

  • Mark Shinnick

    This is the very scenario type which has killed some of my early computer trading days, where some sort of technical tools problem blinded me to present events at just the wrong times. What’s beginning to unfold now could be no joke in my lens.

  • ridingwaves

    pretty close, support cluster here for SPY
    still think a push could happen lower and quick reverse….

  • http://www.linkedin.com/in/sharondsessions/ Sharon

    Yucky. I am still resisting new Windows computers. As long as my XP lasts, I am using that. My next choice is Win 7, although I don’t really like it compared to XP. We need a good competitor to come along and wipe out windows. Looked at Linux a few years ago, but nobody was producing software for that very well.

  • HD

    2445 is the zig zag symmetry. 29, 12, 29

  • OJuice

    Interesting USD hasn’t perked up considering the nice bottom set-up and the sudden decrease in risk tolerance.

  • Julie

    SPX If not the 55 ema and lower channel then the gap approx upper cloud boundary. Busts thru gap and upper boundary then lower cloud boundary approx with another lower trend line
    JULIE https://uploads.disquscdn.com/images/44935393abe491d1365cd16dfa7d6f9ddc935d9e26f4b4425501902a64c6caf2.jpg

  • http://www.linkedin.com/in/sharondsessions/ Sharon
  • Mary

    There’s your push lower with a quick reverse …

  • Mark Shinnick

    Wow, that’s great…I still run some XP machines; really appreciate this.

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

    I’m surprised an electronics manufacturer hasn’t licensed or outright purchased XP, embedded it electronically in a TV or other device and be done with it. It’s impossible for a virus to overwrite an EEPROM!

    edit: and just think, no learning curve.

  • Mark Shinnick

    Yeah…its pretty much gotta happen all in here. Gotta get ready to abandon all recency bias.

  • OzarkHillBilly

    Most def.

  • Julie

    You are correct RW ….. IMO SPX 10 min chart needs a positive divergence MACD 5,34,5
    JULIE https://uploads.disquscdn.com/images/07cacb142027db2fe6fadb99e50c87a93ac781f62051feefccd3c927d1e910fd.jpg

  • ridingwaves

    why not upgrade to 10? it was free and works much better…

  • Mark Shinnick

    I’m very slow about that sort of significant change. Yeah, I’ve spent some time with it on gradually becoming more familiar.

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

    Controlling Windows updates is critical. Lock it down, and let it run only at month end. No good trades happen at that time anyway. LOL.

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

    “Microsoft won’t end security updates for your Windows 7 PC until Jan. 14, 2020.”

    might I recommend 8.1?
    😉

  • AcoBrasil

    Nice call. I added a couple of longs following the 2444 touch.

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

    Julie, for giggles, try the 110. I’m curious.
    trendline lines like this make me cautious.

    a 110 might reveal a scare-the-children scenario. (dip, and reverse up)
    the CCI slammed low adds to my case.

  • http://evilspeculator.com Sir Mole III

    LOL – they are trying to get me to update from Win7 to Win10 because it’s not supported anymore. WinXP is ancient and probably not safe either. Just so you know you won’t be able to buy Wn7 or a system with Win7 anymore.

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

    Helpful, thx.

  • http://evilspeculator.com Sir Mole III

    I fucking hate updates but not updating Windows is risky these days. Too much malware out there.

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

    thanks Captain.

    you need a (conditional) rule; 5 blue arrows under VWAP in one hour?
    disable flag=TRUE.
    😉

  • Julie

    Hi Chief I have same on 10 min chart below … Thanks Chief !
    JULIE

  • Julie

    GG 110 ema ?
    JULIE

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

    no, ema envelope.
    it’s on the link.

  • Julie

    Gotcha GG !
    JULIE

  • Mary

    looks like a significant divergence on that right panel …

  • Mark Shinnick

    Keep Mrs. happy….stay off those bad sites :)

  • Mary

    just bought /ES 2450.50

  • OJuice

    To clarify, with the divergence so far, the idea is to buy on a breach of VWAP with a positive signal correct? If so would this be classified as bearish with reversal potential?

  • http://evilspeculator.com Sir Mole III

    If I just didn’t hate ThinkScript so much… but yeah, on trend days those things need to be ignored.

  • http://evilspeculator.com Sir Mole III

    If VWAP is taken then you may have yourself a live one here.

  • Ronebadger

    I loved XP…currently using 7-Pro. I HATE 8 &10 or anything in the future that looks or works like those… I will transition to the newest version after 2020…until then, I’m sticking with what I like.

  • Mark Shinnick

    Yeah…got some TNA.

  • HD

    flat 13.35

  • Tomcat

    I missed my entry (2244) by 1 point, was trying to be cheap.

  • Ronebadger

    DC Bounce after 45 pt 2-day drop?

  • OzarkHillBilly

    Hard to believe, right?

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

    anybody sell the 10 handle rally?

  • http://evilspeculator.com Sir Mole III

    Not me based on what I’m seeing on the Zero right now. Good luck!

  • Ronebadger

    My name is Ronebadger….and I’m a permabear…

  • ridingwaves

    still an outside chance for MM’s to hurt more folks with run to 242.40 area but it will need some heavy lifting from Kim vs Trump

    in bears favor, earnings season is winding down

  • OzarkHillBilly

    It’s doable with a tight stop, if that’s your thing. I’m passing for now and waiting to see what develops in the final hour.

  • Julie

    SPX IMO need one more lower low for a positive divergence 10 min chart
    JULIE

  • HD

    +5, free ride on half left. It’s definitely my thing

  • OJuice

    Sure would like to see what would happen if $VIX can close above 15. I don’t have an /ES position. Just want to see the carnage of short volatility strategies all scrambling for the exit.

  • Mark Shinnick

    Yeah and ….why not some 240 volume hole stuff….while we are at it :)

  • OJuice

    What I’m waiting for is the 233!

  • HD

    just another perspective, my cheap $0.02. big volume-250K+ /VX contracts today. That was the squeeze. Suspect they all bailed when yesterday’s high was taken out. Could be some new shorts I suppose on today’s spike.

  • OJuice

    /VX is pretty new. I’m pretty ignorant to the whole thing, but, I assume a lot of the short volatility strategies are using other vehicles.

  • Julie

    SPX 10 min chart IMO as stated previously need one more low fot the positive divergence
    JULIE https://uploads.disquscdn.com/images/870ae35c98d5cc2f7eb1aaae664c84dc6f0692c9849abe60510c6b0c41f67d86.jpg

  • HD

    Flat 45.50
    24(55) fib, Caldaro has 2456 fibonacci pivot, 10 handle rally. Plenty of confluence to try them there. Active day. A little volatility always helps. have a good weekend all. Gonna take Moles advice and keep powder dry Friday.

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

    ..back from lunch

    Did I miss anything??

  • HD

    I’m very new to /VX, like this week. No products directly affect the VIX except SPX.

  • OJuice

    I seem to remember people here mentioning it a month or two ago. When i first looked its volume was pretty light. I’ll check it out, but, my initial guess is that it will make the widowmaker look like an angel…

  • Julie

    YEAH I F&^%$*# knew it . I nailed it yesterday too ! I stated to watch SPX for a backtest of the broken trend line and a 50% retracement
    JULIE

  • OJuice

    Glad to see all the hard work pay off. You’ve been posting like a lady possessed.

  • OJuice

    You are just in time for the big show.

  • Julie

    Thanks OJ Some great traders here and I want to be a part of it. Your comments are contributions are great I sincerely mean that Everyone here is great Mucho thanks to Mole
    JULIE

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

    I have absolutely hated the VIX for a while. But Mole had a very nice write up on IV and some highfalutin charts with ratios. I’d take a peak at that. really opened my eyes to a direct play on volatilty. /VX is the best product to do so IMO. GL

  • Julie

    GG no medal I just want to help …. You guys are great ! Thanks for everything !
    JULIE

  • OJuice

    Highfalutin charts. Laughed out loud at that one.

  • Ronebadger

    VIX up 40% !!!
    Will be interesting to see tomorrow’s VIX…we’ve seen a bunch of these 3 or 4 day pops only to come right back down to reality as people BTFD

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

    it’s good to have fresh blood in the forum.
    keep up the good work, go easy on the expresso.
    😉

  • Mark Shinnick

    Yeah….and when the exits finally become too small…..

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

    back in the day, 300 comments a day.
    good times..
    http://historythings.com/wp-content/uploads/2016/05/sparta.jpeg

  • Julie

    GG Will do … Everyone have a great Day ! I sincerely mean that !
    JULIE

  • ridingwaves
  • OJuice

    People love carnage.

  • Ronebadger

    Today looks like STFR

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

    I bet the various permabears are wetting the bed with joy.

    no time to scan.

  • Ronebadger

    Stainless Steel Rats…what is our profession?

  • OJuice

    30 more mins. I might need some popcorn if they make a run at the wall.

  • Ronebadger

    already did that…

  • Mark Shinnick

    Its been on the march…like a short covering thing.

  • Julie

    VIX I posted this chart previously …. It has a relationship with the 10 ema …. Percent above and below the 10 ema
    JULIE https://uploads.disquscdn.com/images/eb95080db05fc278078b769711d077374ee93234b9372dce9fe86fd9f559ea0c.jpg

  • Mark Shinnick

    Yes…but beware of that recency bias.

  • Ronebadger

    THAT’S what I’m talking about

  • Mary

    VIX just tells you how much SPX option buyers are overpaying. It is computed from that.

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

    Geez….nothing here really qualifies yet as blowoff type behavior.

  • Mary

    You’re right. It is a rather orderly descent …

  • ridingwaves

    nice

  • Mark Shinnick

    Maybe put a trailing stop on it because of a 26.7 target area.

  • Julie

    RW EXAS looking for an oversold bounce off the (1) daily 55 ema (2) upper cloud boundary (3) lower trend line.The ichi cloud conversion line 8 and baseline 21 are flat with the conversion line below the baseline (bearish) If a bounce occurs as I expect …. Gonna short the lower high watching volume and fib retracements and position of the conversion line 8 and baseline 21.
    JULIE https://uploads.disquscdn.com/images/d3185969c7e0856c7db71b67251e65389bdd661db6e8ff9b77864c33f670852d.jpg

  • ridingwaves

    I think the selling ends tomorrow mid morning with that 242.30 area if not, Monday will be bloody…..

  • ridingwaves

    blocker no more

  • Ronebadger

    more stairway than elevator, huh?

  • ridingwaves

    Yesterday news-US Defense Secretary James Mattis issued a dramatic ultimatum to North Korea on Wednesday to “cease any consideration of actions that would lead to the end of its regime and destruction of its people” — strong words that come just one day after President Donald Trump warned that the US could unleash “fire and fury” on Pyongyang.

    “The DPRK must choose to stop isolating itself and stand down its pursuit of nuclear weapons,” Mattis said in a written statement, adding that the “regime’s actions will continue to be grossly overmatched by ours and would lose any arms race or conflict it initiates.”

  • Ronebadger

    He’s the man….soon to be THE MAN

  • Mark Shinnick

    Very sensible, might even be what cytr needs for .58

  • ridingwaves

    These guys won’t sneak up on Mattis…

    News brief Today-

    U.S. military strategists at the Pentagon have a military solution in place to address the growing threat emanating from North Korea, but they are holding their fire in favor of ongoing diplomatic efforts by Washington and its allies, Defense Secretary James Mattis said Thursday.

    The Pentagon chief remained largely mum on the details of that military solution, which theoretically would curb Pyongyang’s efforts to develop a nuclear-capable, ballistic missile arsenal, except to say any military option would be a multilateral one involving a number of regional powers in the Pacific.

    “Do I have military options? Of course, I do. That’s my responsibility, to have those. And we work very closely with allies to ensure that this is not unilateral either … and of course there’s a military solution,” Mr. Mattis told reporters en route to meet with senior leaders in the technology sector in Seattle and California.

    The former four-star general declined to provide any additional insight to a statement released Wednesday, warning that the North’s continued provocations — including alleged plans for an attack against U.S. forces in Guam by Pyongyang — “would lead to the end of its regime and the destruction of its people.”

  • ridingwaves

    huge beat down in bio indexes already…pretty much over with retest of breakout here…

  • Julie

    IYT the ETF for transports possibly going down to upper boundary of the WEEKLY cloud matching the DAILY 233 ema approx 162 Shown are the weekly and daily charts. Remember the cloud acts as a magnet
    JULIE https://uploads.disquscdn.com/images/582463ea52ef9e60f89059e12615eb1e47061614e690372fb380442641f4c522.jpg https://uploads.disquscdn.com/images/4edcd8f05bfad9f100c1c4f01d7e0e2345b3ada10d8c3458d8846f159a151f68.jpg

  • Mark Shinnick

    A magnet….well, that’s the illusion when it actually seems that way I suppose.

  • Julie

    Mark IMO Eastern technicals are far supreior than Western technicals
    JULIE

  • Julie

    USO short is working .. Going to watch it at the confluence of the 55 ema ; 21 conversion line and lower channel trend line. A break of the lower trend line and upper cloud ….. ! Would be great !
    JULIE https://uploads.disquscdn.com/images/272190fd12193e1731f8bb6ea4d9896c6ba7bb90b5fb2e5dadad9878c6e02c6b.jpg

  • Julie

    Mark Eastern technicals had the bounce GDX at 22.04 and it was 22.02 I displayed a chart
    JULIE

  • Mark Shinnick

    One thing to know about all technical is they represent where people “are at”. Markets need people so simply move to where they will become compelled to participate…and that’s where things happen. The trick here is to incorporate/systematize whatever edge you happen to have with all this into banked coin….representing your edge in positioning in advance of those events.

  • Ronebadger

    VIX settles at 16.04, up 44%

  • Mark Shinnick

    Your noodle is dripping… :)

  • Julie

    Mark If you want me to I will compute GDX Level 1 Relevant Level 2 and Level 3 over the weekend at nite …. i enjoy it and relax doing it …. I do not watch tv
    JULIE

  • Julie

    F so far has been within pennies and CAT on the money too
    JULIE

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

    I got the machines number and code
    JULIE

  • Mark Shinnick

    It it produces actionable targets with clear safety exits I’d sure like to see that.

  • Julie

    I will do it Mark Check the blog at nite
    JULIE

  • Grant
  • Julie

    GG You Sly Fox ! I know that you know the entire fib levels and how to compute the various levels. You Sly Fox ! LOL ! You did gold years ago ! My husband saw it ! LOL ! He taught me.
    JULIE

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

    +1 for honesty.
    nothing in that graph would show break higher or lower.

    that’s something I just have to embrace.

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

    oh, yes I have all that info.
    but it’s only for my super duper secret subscribers.
    😉

  • Julie

    I knew it all along you sly fox You and my husband probably learned approx the same time ! LOL ! It is great ! LOL !
    JULIE

  • http://evilspeculator.com Sir Mole III

    You guys were on fire today!

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

    sometimes. for every Fibonacci that lined up, there’s one that did not. At least that what Scott hinted at.
    correlation does not equal causation.

    and when you get bored of that, try pivot lines.
    it never ends. Never.
    http://www.pivotpointcalculator.com/

    he he

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

    GG you and my husband have without a doubt have taught each other things over the years. My husband is a great trader now retired and goofing around our small MT ranch. He has taught me everything and let’s me do all the trading now.I have a learning and trading partner which he was very adamant about getting Her name is Cyd and lives in MT too and she is great. She will probably start posting shortly.Everyone here will like her
    JULIE

  • Ronebadger

    Re: Vietnam? Who’s the guy who said “we’ll turn that place into the world’s largest glass paved, self-lit parking lot”? McNamara?

  • Julie

    You know it chief ! A great Day ! Thanks !
    JULIE

  • https://scottphillipstrading.com/trade-setup Scott Phillips
  • https://scottphillipstrading.com/trade-setup Scott Phillips

    It’s a trading range, obviously. Trading near the bottom of the trading range with a long lower wick, the market was telling us it *should* go up at least to the top of the trading range or beyond around 60% of the time.

    When something is a low probability outcome (failing to find support at the lows of the trading range) when it does happen it catches traders by SURPRISE!

    And where something really, really *should* happen and doesn’t, it is a subtle signal that bulls are weaker, way weaker than they appear on the surface. And becomes a good short.

    This mental flexibility to change your mind is, IMO, the sign of an expert trader.

    I’m not surprised, motherfuckers :-)

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Unless you have done your own, extensive tests on fib levels you have zero business using them (or any TA for that matter)

    At least 80% of what is in the technical analysis textbooks is total horseshit.

    On my testing fib levels were not created equal. The only one with any validity at all was 50% (and that’s not a fib level).

    But please don’t take my word for it. Please do your own testing. And if you haven’t tested them you don’t have any business using them. Trading gurus and textbooks are not reliable sources of information.

    And saying “I’ve been using them for XX years” is not testing. Many, many times I’ve been certain something was an edge, and a real test showed me I was stupid.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    It’s extremely difficult to undo that illusion, and maybe not even necessary.

    It’s just a squiggle on a chart. It’s not attracting or repelling price in any way shape or form. It’s just doing what it does, being a squiggle.

    There is a definite basis for thinking ichimoku is a real edge, but it’s not particularly helpful to start thinking of TA as predictive.

    TA (the stuff that works, anyway) is descriptive, not predictive.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Julie FYI regular technical analysis doesn’t work on the VIX because of it’s weird calculations it has behaviour that doesn’t exist in other markets. It’s also a derivative so putting indicators and trendlines on is generally a waste of time

    Specifically it has a very very strong mean reversion effect from overbought levels.

    Mole did some posts on “GARCH” a while ago, those are well worth a read :)

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Agree. VX is absolutely the best product for this.

  • Julie

    Scott Great example of a stock in a trading range I am looking at 36
    JULIE https://uploads.disquscdn.com/images/3d629871b7b5cf742ded2396953db77059ada6af24b24f259f3d8ea7cc2025bb.jpg

  • Mark Shinnick

    Exactly, our minds are applying too many analogs to those things which deceive; nothing beats digital accountability. You doing OK? …heard something about ICU?

  • Mark Shinnick

    The real trick is to kill the warlord biologics, preserve great real estate, and invite the Chinese to offer a relatively better life to most North Koreans; a turn-over sort of like GB gave HK. A huge Win-Win for everyone: Neutron Bomba Baby!

  • Mark Shinnick

    …but only against a steadily marching wetdream target reminiscent of the old days.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Excellent low risk entry point there Julie :-)

    Retail guy gonna look at that and think “that market is toast”

    Professional looking at that thinking that even if it’s a 30% chance of getting back to the top of the trading range, risk reward is very very attractive.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Yeah I got out of ICU last Thursday. Still have a big garden hose sticking out of my neck for the dialysis machine.

    Full kidney failure. Overexercising with a viral infection, nearly died. Still sick as, truthfully,

    One good thing, I have in my business plan how to deal with illness. It worked perfectly, no mistakes and no missed trades even during severe illness.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    The technicals with EVIDENCE are better than the technicals with no evidence.

    I trade primarily candlestick patterns, and the Japanese ones test like crap, across the board.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    But have cool sounding names and ambiguous Eastern mysticism

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    And also, the day AFTER a trend day they are MONEY!

  • sutluc

    Shit, sorry to hear of your illness man. Get better.

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

    Welcome Back Scott, we almost lost you.

    http://i58.tinypic.com/2nhdtl1.png

  • Julie

    Yes Welcome back Scott !
    JULIE

  • Mark Shinnick

    Are they coming back on line? Your inflammation getting resolved?

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    It was actually a close run thing for a while. I’ve never experienced real sickness before, it’s not very nice.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    I’m back to 14% function (from 4%) so yeah, but its slooow

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Smells like its ready to at least try and rally

  • Mark Shinnick

    Yeah, great news there. Lets email a bit about what’s down the road.

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    I posted a video of me trading from hospital, its on my youtube.

  • BobbyLow

    Wow! That’s some serious stuff Scott. I’m glad you’re OK. Wishing you the best for a full and speedy recovery.

  • http://evilspeculator.com Sir Mole III

    Scott – sorry but you are asking for it:

    https://www.youtube.com/watch?v=unkIVvjZc9Y

    Just walk it off you pussy.

    Seriously now, let me know if you need anything.

  • Ronebadger

    Excellent…making sure all the trading goes properly is of equal importance as NOT CROAKING. I’ll be praying for your recovery.

  • http://evilspeculator.com Sir Mole III

    Working on special post – just taking me a little longer.

  • OJuice

    Probably some more of those highfalutin charts ;0)

  • Mark Shinnick

    So far seems little more like continuation from yesterday.

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

    Gartman Stakes His Reputation That “The Bull Market Has Come To An End”.

    (GG goes long, Sooo long.)

  • Mark Shinnick

    Imagine that…a entire reputation staked…..its all happened before. Maybe that happens when someone is running too much $.

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

    I think he’s a covert shill for the other side.

    {sigh}
    BTFD..
    http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=0&dy=0&id=p75799563787

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

    Which candlestick patterns have evidence of an actual edge?