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Last Chance For The Bears
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Last Chance For The Bears

by ScottJuly 23, 2014

If you took the equities setup I posted Β yesterday (short on a break of the daily low with a stop above the high) you didn’t get triggered so saved yourself some angst. If you got positioned early you may or may not still be in the game depending on where you out your stop.

At this stage the odds have changed. Trend continuation is now the highest probability, I make it at 55:45, but the bears have one last chance to pull a hail mary. The good news for bears is that if they pull it off here, early breakout buyers will be trapped in a false breakout. In my opinion it is too soon to buy the breakout, and the bears have one last chance to do some technical damage. That setup is a GAP OPEN SELL SETUP. Sell as usual on a break of the low, stop just above the high.

If it doesn’t happen today the bears are in big trouble. The problem with buying breakouts is that you need a wide stop to deal with potential backtests, so I advocate waiting for a better long setup. Getting long right now does not make sense on a risk/reward basis, even though the odds are high.

FX is going to be a nightmare until equities resolve – I’m following short EURUSD and long USDCHF for intraday setups, nothing else on my radar

Scott Phillips


About The Author
Scott
  • phylum

    β€˜As I think back over the years, I have been guided by four principles for decision making. First, the only certainty is that there is no certainty. Second, every decision, as a consequence, is a matter of weighing probabilities. Third, despite uncertainty, we must decide and we must act. And lastly, we need to judge decisions not only on the results, but on how they were made.

    β€˜Most people are in denial about uncertainty. They assume they’re lucky, and that the unpredictable can be reliably forecast. This keeps business brisk for palm readers, psychics, and stockbrokers, but it’s a terrible way to deal with uncertainty. If there are no absolutes, then all decisions become matters of judging the probability of different outcomes, and the costs and benefits of each. Then, on that basis, you can make a good decision.”

    – Robert Rubin, former Secretary of the US Treasury

  • http://evilspeculator.com molecool

    As usual we are in sync brother from another mother!

  • Scott Phillips

    Maybe 45% was overstating it, 40 is probably more like it

  • Billabong

    Are you still long oil?

  • Billabong

    After the decision is made, then it becomes a question of unintended consequences…

  • Scott Phillips

    The correct stop on the setup I posted in the month I posted (September) was never hit and am currently in profit.

    Like I keep telling people there are huge differences between ETF’s and plotting continuous contract data is lazy and has many problems

  • mugabe

    Another good quote (and ties in with a couple of threads back about drawdowns and the information they give):

    ‘When you’re practicing technical analysis, there will be a time when the approach you’re using doesn’t work, If you’re not flexible, you’ll self-destruct.’

    Ralph Acampora, veteran technical analyst

  • newbfxtrader

    I am long too but thats from wider stops. No thanks to TOS for messing with the charts. Its so stupid.

  • newbfxtrader

    Did you take the kiwi short? Finally fell off the cliff πŸ™‚

  • Billabong

    Doesn’t it depend on how your system works? If you have back tested what your using for weakness and strength, know how it works, and have a positive expectancy what difference does it make. Granted, ETF’s vary by how they’re constructed and what their price is measured against.

  • Billabong

    I’m still long after an FSS…

  • Scott Phillips

    If you are doing candle pattern entries the charting on ETF’s is unuseable. Maybe for other systems, but I wouldn’t know.

  • Scott Phillips

    You can do individual charts on TOS right? A specific contract

  • Billabong

    Let’s correct the last paragraph …. I wouldn’t use ETF’s in singular, I would use them in conjunction with the underlying premise for their existence. There are some ETF’s I believe are totally unusable except for speculators in the moment … A great example is SDS … the only short you can short and you will make money as it goes zero or goes through its normal share reissue.

  • Billabong

    Why would anyone trade an ETF based on the ETF’s TA?

  • Skynard

    NZD getting hammered, nice!

  • newbfxtrader

    Wheat πŸ™‚ good work!

  • newbfxtrader

    Yes. I have to search for it or type it in the box. The default one shouldn’t be expiring in just days.

  • Skynard

    Smelled a squeeze:)

  • BobbyLow

    You had me curious so yes you have to type in CLV4.

    I re-entered Short NZD/USD last night. I’m also Long USD/JPY from yesterday and Short USD/CAD. The USD/CAD has been a bitch with spikes that lead to nothing but flatlining however, I found that this is what it does before every run so patience is key here. BTW, None of these trades are etched in stone. πŸ™‚

  • Kidd Cudi

    I’ve only ever traded equities. What’s the difference (in strategy) between Forex and Stocks? Do the same techniques work on both?

  • http://evilspeculator.com molecool

    Wow, that’s a broad broad question. There is a KEY differences between stocks and forex:

    1) A 24×5 global market
    2) It’s really a collection of connected islands (of different sizes and sophistication) instead of one big centrally managed market (laws and regulations are regional).
    3) Leverage – you get to control quite a lot of currency (this is very tempting and we stick with the 1% R rule)
    4) Mostly better fills – volume is HUGE compared with stocks.
    5) No expiration or roll-over as in the futures.
    6) No theta burn as in options.
    7) You are dealing with pips instead of ticks – almost the same but the pip size changes slightly over time (unnoticeable during duration of campaigns – unless you trade weekly/monthly)
    8) A lot more fun and the markets flow much nicer than equities on the five majors:

    EURUSD (half of all Forex traffic)
    USDJPY
    GBPUSD (cable)
    USDCAD
    AUDUSD

    Those five account for over 80% of all Forex volume – about $5 Trillion are being traded each day. That’s not a typo.

    Facts – most retail trader lose trading forex – they get seduced by too much leverage or eaten by shitty b/a spreads (I will soon fix that for you guys). Institutional love forex – it’s the dog that wags the equity tail.

    That ought to cover it.

  • http://evilspeculator.com molecool

    Oh, check out my Forex Risk Calculator: http://evilspeculator.com/Rcalc/

  • http://evilspeculator.com molecool

    Dude, I expect double digit precision – we have a standard to maintain.

  • http://evilspeculator.com molecool

    If in doubt go with unusable πŸ˜‰

  • http://evilspeculator.com molecool

    Seriously – I wrote this sucker a year ago and it still puts a smile on a face as it’s just so fucking cool πŸ™‚

  • Skynard

    House of cards:)

  • BobbyLow

    I’m glad Mole answered the way he did because there is a lot to it.
    A simple answer would be that there are similarities in charting. But for me it was almost like learning a different language. I’ve only been trading Forex for a couple of years. My first year, I really didn’t have a clue as to what I was doing. But because you can trade such small amounts, you don’t have to worry about blowing up your account unless you do something very stupid.

    So if you are interested in trading Forex, I suggest that you read and study as much as you can about the basic language/terms etc.

    BTW, I began trading Equities in 1998 and am only trading Forex now. It is much more straight forward and as Mole said the 24 Hour per day availability is great.

  • BobbyLow

    I use it on every trade. Like I said before it is better than sliced bread. πŸ™‚

  • ridingwaves

    cards made of steel…the iron being hot money

  • Skynard

    By the looks of it a big move is comimg bra.

  • ridingwaves

    opex on metals Monday..spx hit 1900, bring out the 1900 hats…now selling off due to no one being able to afford an overpriced home….our overlords kill me sometimes…

  • Skynard

    Game on, rinse and repeat. Most do not get it. They are living a fantasy:)

  • bdoone

    Tracking GBP/JPY from Moles Tues. post: I see it near ES 1946, measly 35 handles lower.

  • newbfxtrader

    If you go to trade tab hit all then type in /cl you will get all contracts available. Its just a pain though that they keep current contract the old one just days before expiry.

  • Skynard

    /ZW /ZC scaring the children. Placed full positions

  • Skynard

    Mojo about done, let’s see some longs trapped for a change ha?

  • stovis

    /HG moving up today as gold moves down

  • ridingwaves

    based on China PMI reading last night…opex for metalson Monday…it looks like a short trade now…

  • http://evilspeculator.com molecool

    Has nothing to do with anything but this really really cracked me up today πŸ™‚

    http://www.owndoc.com/uploads/dermarolling-wrinkles1.jpg

  • ridingwaves

    don’t forget the after crack picture…

  • Skynard

    If you ask me, that is a huge bear flag on the hourly.

  • Kidd Cudi

    Wow, that’s a broad answer. πŸ™‚

    Thanks.

  • BobbyLow

    Stopped on Rangebound Hell of USD/CAD for -.40R. In the mean time NZD/USD and USD/JPY doing fine.

    Took a passing glance at the E-minis and they seem to be bound up pretty good. Probably need some more amphetamines or a laxative to get them moving one way or the other. πŸ™‚

  • bdoone

    Or both to get it moving south even faster

  • ridingwaves

    Could the best time to go short be after the mm’s get that Alibaba IPO done? Although the contrarian view would be that they are delaying IPO because of market turbulence…that thing is going to be a monster with many pigmen hands in that trough…

    The Wall Street Journal reported that Alibaba will be waiting until after Labor Day (Sept. 1) to hit the market. Previously, reports had suggested that Alibaba could make its public debut on Aug.8, which was later pushed back to mid-August. But according to The Journal, Alibaba prefers to wait until September, which it views as a busier month for initial public offerings.

    No official date has been announced, and investors should not expect to know the definite date for several more weeks

  • mugabe

    BB squeeze alert!

    http://scharts.co/1rPpehS

    Fireworks coming?

  • bdoone

    Yes. Either way. Put a Keltner Channel (20) on chart. BB’s been trading inside KC for 8 days. BB’s inside KC usually foreshadows big move.

  • http://evilspeculator.com molecool
  • Kidd Cudi

    lame. I wanted your cool ascii art.