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Let’s Talk About SKEW
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Let’s Talk About SKEW

by The MoleFebruary 24, 2016

I’m as surprised as you may be seeing equities head straight lower overnight. As you know I was actually positioned both long (ES) and short (NQ) expecting a break out after obvious signs of distribution. Things are clearly very confusing right now – yes, I phrased it this way intentionally. So let me explain what I mean, starting by talking about SKEW.

2016-02-24_SKEW

A lot of noobs here so let’s cover the basics real quick – I lifted this right off of the CBOE’s page:

The CBOE SKEW Index (“SKEW”) is an index derived from the price of S&P 500 tail risk. Similar to VIX, the price of S&P 500 tail risk is calculated from the prices of S&P 500 out-of-the-money options. SKEW typically ranges from 100 to 150. A SKEW value of 100 means that the perceived distribution of S&P 500 log-returns is normal, and the probability of outlier returns is therefore negligible. As SKEW rises above 100, the left tail of the S&P 500 distribution acquires more weight, and the probabilities of outlier returns become more significant. One can estimate these probabilities from the value of SKEW. Since an increase in perceived tail risk increases the relative demand for low strike puts, increases in SKEW also correspond to an overall steepening of the curve of implied volatilities, familiar to option traders as the “skew”.

2016-02-24_SKEW_spiders

That last part is pretty important. So let’s take a quick look at the option smile right now today for the Spiders. I have marked two different concepts on that chart. One is called intra-month SKEW and the other is called inter-month SKEW.

Intra-Month Skew

Observing only intra-month SKEW you typically see the lowest implied volatility (IV) on the at-the-money (ATM) strike or near it. You can see that IV slopes away from the ATM strike and upward, and that is pretty typical for stock and stock-index options like the Spiders. The left slope which shows the IV for OTM puts is also usually steeper than that for OTM calls. After all almost everyone defines risk in the context of loss, in particular as bearish participants are usually a small minority (of course that varies).

Still with me? Good. So that’s the main reason why you see OTM calls being priced a lot lower than OTM puts located the same number of strikes away from ATM (e.g. five strikes below ATM compared with five strikes above ATM). That’s pretty normal – especially stock and stock index options usually don a crooked smile that’s pulling hard up to the left.

Inter-Month Skew

With inter-month SKEW, the same is also true. If the March expiration shows a higher IV than for instance the June expiration (as we’re seeing right now above), then market makers expect larger price changes during the contract showing the higher curve (i.e. March). There is one caveat however with interpreting intra-month skew when contracts are nearing their expiration. An option’s vega expresses the change in the price of the option for every 1% change in underlying volatility. Read that one again. Vega however isn’t always the same during an option’s lifetime. It starts out high  (as there’s a ton of time left, which means uncertainty about the future) and then slowly decreases to nothing at expiration day when they start resembling little futures contracts. Falling vega in turn can rise IV and thus steepen the skew. That doesn’t mean the market is seeing large price changes at expiration, although it’s possible, but rather it’s due to a confluence of expiration and low vega.

Putting It Into Practice

Anyway, now that you understand the concept of SKEW and option smiles let’s revisit those two charts. The first shows us that we’ve been in a pretty solid range for the past year or so. And actually right now SKEW is historically low in comparison to where it was a month ago. Which means market makers are not expecting a big drop right here right now. Of course it’s fair to point out that they didn’t expect one last August either 😉

The option smile curve on the Spiders (our second chart) doesn’t really look very unusual although I would say that it’s a bit steeper than what we’ve been seeing over the past few years. I tried to use the TOS thinkBack feature to show you the smile back when but couldn’t figure it out – they’ve ‘improved’ their interface to the point where nobody really can sort through the kitchen sink of features they’ve thrown at it.

Let’s Summarize

So summarizing all that: The current drop could easily just be a bear trap or it may just catch everyone by surprise and catch momentum. I don’t have a crystal ball but seeing a possible inflection point yesterday I decided to get positioned both ways, knowing that a break out would probably:

  • Happen when I least expected.
  • Happen to either the up or down side.

I had no control over the timing or the direction. But I knew one thing – namely that the tape behaved like it was near an important inflection point. And that is usually the best time to strike the iron.

What Happens Next?

Your guess is as good as mine and I don’t get paid to predict the future. My job is to ride the tape’s coat tails as best I can and that is exactly what we do here at Evil Speculator. Leave it up to the muppets and bubble heads in the financial media to serve up mutually contradictory interpretations and predictions about what may lie ahead. Here we fade the noise and simply trade the tape that’s ahead of us.

NQ

Speaking of which – my NQ campaign is now at 2.5R but I’m sure there will be a counter swing today. Which is fine as my stop has been advanced to the break/even mark. Keeping this one looser than loose for now.

2016-02-24_NQ

Here’s the hourly panel which looks promising – unless that lower 100-hour Bollinger can be regained in the next few hours we may be looking at a slide today. Again I would be very surprised but as timing appears to be premature.

2016-02-24_NQ_LT

Long term the NQ is really what we should be following right now. It’s barely holding above that diagonal I painted on the weekly and note that we’re also still below that 100-week SMA. Similar story on the monthly which has us near two monthly NLSLs and below the 25-month SMA. Should we close February below it then I expect nasty things to happen over in the woodshed.

GC*

Yesterday’s gold campain. We traded this one last week and now we caught a perfect entry to the upside (yes, subs only). However the damn thing managed to snag my lazy trail overnight. I must have lost out on 2R here. Insolence!!!

CL

Crude – steady as she goes. That was a picture perfect RTV entry – now it’s in the hands of Mrs. Market to line the Mole’s pockets with plenty of ill-gotten gains. If you’re haven’t already – consider joining out little community of market megalomaniacs – if you have a penchant for taking candy from hapless babies or have felt tempted to challenge innocent passerbies arm wrestling matches then you may just fit right in.

 

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

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  • BKXtoZERO

    Mole nice CL entry, Late yesterday any bull case was looking rather unlikely. I am wary of overnight gaps but looking for intraday shot at seat on the bus now,

  • http://evilspeculator.com Sir Mole III

    Everything looks unlikely in hindsight. But thanks – good entries there yesterday.

  • CandleStickEmUpper

    Thanks Mole for sharing the knowledge of SKEW indications, great post

  • CandleStickEmUpper

    Long nq here at 93

  • Kato33

    Covered half my short position in ES on the touch of the 25d. If the Bulls can engineer a bounce I’d consider adding to shorts around the 25h

  • ridingwaves

    Joined you here….

  • ridingwaves

    stick the the plan RW…..now long…

    ridingwaves OzarkHillBilly 6 days ago

    pullback to 1890 might be better for bulls here to go higher…..

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

    Trying to take care of loose ends this AM because we have some severe weather (for real) coming into NC today and I’ll probably lose power again.

    On the trading front, I’m glad I forced myself to take some partial profit on what I could at the close yesterday. I’m also glad that my Crude position is hedged. That fucking rollover spike up really screwed up my chart this time and I came close to taking my hedge off but didn’t.

    My EUR/USD Short is progressing fine and is in the money while my GBP/JPY Short is up by 768 Pips at this moment with a hard stop set at about +1.75 R.

    So even though yesterday was a ball buster there were some things that turned out OK. BTW, someone recently commented that I was a pretty humble trader. Yesterday was a perfect reminder of why I try to remain humble. Over the years, I’ve gone through many periods where I thought I had this game down. This would lead to over confidence and cockyness which in turn would lead to a real ass kicking by the markets. One of the best things that I’ve ever learned here is that each and every trade is only one of the next thousand. This helps to keep my head the right size win, lose or draw. 🙂

  • BKXtoZERO

    Looking hard at CL this morning, Interesting point inflection point. It looks to be above the declining tops trendline while looking dangerous to the downside. We have a series of higher highs and higher lows. I don’t know whether to short it or take it home to meet mom.

  • CandleStickEmUpper

    This tape is not falling off the plate today. The bear is just moving around in his nap. Go back to sleep for now bear. We got long points to scalp

  • BKXtoZERO

    long UWTI from 1.36

  • BKXtoZERO

    MEAT: It’s what’s for dinner………..

  • Time Bandit

    🙂

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

    one of the trickiest spots, the elbow of a possible turn.
    perhaps that’s why I ‘like’ trends instead.

  • ridingwaves

    no worries and I have lose stop in case of overthrow to 1885….
    the trade of last 2 months has been miners…the HUI could go to 240 area but might hit some resistance at 186…miners should continue to be bullish near term

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

    horse meat
    (chuckle)

  • BKXtoZERO

    Classic tea cup pinky pattern. That little spot on the handle where you rest your pinky if you want to look British. Saw it a mile away.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://greenlander1.blogspot.com/ Greenlander

    Just grabbed SPY long on gap fill. Will unload it if we get close to closing today’s gap. Stop right below the gap level

  • BKXtoZERO

    Thanks for wisdom and good luck w/ storm. I don’t miss Philly winters. You would think you were cold getting into your car at 2AM after the bar closed, UNTIL you saw a bum sleeping on cardboard over a street vent

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

    Cold, what is that?
    ;-D

  • Yoda

    Drop in ES looks like a bear trap to me. Same with CL.

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

    opex today..could get some bleed off with bull equities ramp for lower entry…

    every metals chart looks like a cup and handle that is or almost complete

  • Yoda

    Ka-ching!!!

  • tradingmom

    Even if it isn’t a trap, It looks to me like we’re due for a decent rally back to the 1915 area minimum to make a right shoulder on the 1 hr spx.

  • Yoda

    I share your views.

  • Time Bandit

    It usually doesn’t get too cold here (like New England Cold). It’s going to be in the 70’s today. The problem is the storm that’s been raising hell all over the south. The forecast for this afternoon is for severe thunder storms, large hail, damaging winds and a possible tornado. Other than that, it should be a nice day. 🙂

  • ridingwaves

    Global warming deniers are getting their asses handed to them in that trade…

  • BKXtoZERO

    eyeing DUST. (just kidding)

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

    Did I mentioned I was stopped out under $13?
    jumped back in at 14 & 15.
    best damn whipsaw survival story, EVeeeer. (well, for me)

    like Mole says, you’ve got to pull the trigger. every. time.

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

    ROFLMAO.

    if the weekly DUST RSI, gets under 30, there will be hell to pay.
    {never know}

  • Yoda

    well done!!!

  • tradingmom

    I don’t know much about island tops, but I just want to point out that the two most recent gaps are in the same place. Sorry, this chart is a mess with lots of lines, but the two horizontal ones show the gap up from 2/22. (SPX 10 min)

  • ridingwaves

    ummmm Castaway might have you on this one….

  • tradingmom

    In the bigger picture, today’s drop stopped right at the line connecting the October 2014 low at 1820 with those other lows.

  • ridingwaves

    NRZ….16% yield and about to move to 13-14 with move above prple line…ment’d over 20 days ago at 9 and 10…just moved over ….some resistance at 11.80 also…

    http://s14.postimg.org/vxa82ktvl/NRZ_about_to_explode_to_13_14.png

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

    good eye.
    a small reason to (generally) not chase after a gap.
    (probably BS wisdom, maybe someone can deny or confirm)

    https://en.wikipedia.org/wiki/Island_reversal

  • Billabong

    Don’t want to be a party pooper, but CL is getting a strong daily MOMO sell signal that’ll be confirmed COB or tomorrow morning unless the Nigerian’s or the Iranian’s or someone else has a problem tonight.

  • CandleStickEmUpper

    Participation just went flat, according to the Zero. Fireworks are over for now

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

    if the line holds, we’re talking pennant action next several days into March begin.
    starting with some kind of doji candle tomorrow?

    if the line doesn’t hold, lower today, up tomorrow for a last kiss goodbye.

  • BKXtoZERO

    It’s not dead yet Jim…. almost, but now quite.

  • http://evilspeculator.com Sir Mole III

    The majority of daytime sessions have been flat in the past week or so. All the meaningful moves happen overnight.

  • http://evilspeculator.com Sir Mole III

    It’s usually windy up there.

  • CandleStickEmUpper

    Sold the NQ long at 4124 (from 4093 as posted earlier)

  • CandleStickEmUpper

    Sold it at 4124. Im out

  • nyse

    Good trades and good skew explanation.

  • BKXtoZERO

    GDX may be hitting resistance here at 20. I see RSI divergence on 3-6 month chart, this is 1 year

  • BKXtoZERO

    UWTI looking rather erect intra-day rt now 😉

  • ridingwaves

    G20 meets this weekend, I expect higher markets by Friday-Monday…1970’s not out of question…

  • Time Bandit

    I don’t know about strong but we were almost on the same page earlier this AM at below 31. But I need to see a close below this based on current levels.

  • BKXtoZERO

    OUT UWTI 1.54 from 1.36 Indian buffet is on someone else rest of the year……..

  • BKXtoZERO

    One of the oil ministers must have ordered croutons with his salad or something to have caused that spike. I took it.

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

    Sold it into this spike. The 5/ 10 min were pretty overcooked.

  • Objectively_Bias

    I’m really liking this push higher, if it gets to my short term overbought levels it will be a perfect short opportunity. Lots of resistance above though on the 1hr chart – 1909 (NLBL), 1911(25 SMA) & 1916 (60 EMA) ES. May not get to where I need it.

  • Time Bandit

    LOL

    Crude has been Nucking Futs. Another thing is that I have no idea what caused an increase in daily volume but something happened. A few weeks ago the average daily volume was 260,000 – 280,000 Contracts per day. Now it’s over 600,000 Contracts per day.

  • BKXtoZERO

    break out still possible imho. (ain’t betting though), I honestly think that the crude is money angle may play out soon if central banks go nuts. Cash is trash mem. Next big move may be that more than any supply demand thing.

  • OzarkHillBilly

    Had quite the morning so far and just catching up now. Actually got a job offer out of the blue, and it’s something else I can do from home while while waiting for trades to develop. Lots for me to consider.

    I got a trade in around 1895 but didn’t commit much since I was also on the phone and couldn’t “see” everything. From looking around the usual watering holes early this morning, it seems like the bear brigades were as bearish as they’ve ever been, talking about the elusive wave 3 down and such.

  • ridingwaves

    Maybe March brings bulls in to hurt some shorts…I believe it’s also a maintenance month for refineries …I thought I saw GS or JPM say something about $40 in march….JPM set aside 500 Million to cover oil bets/loans this week…they might push for short covering rally to help them with defaults…just musing..

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

    5 min chart. stochs/ CCI maxed out and we recovered 2/3 of the move down. I’m not quick thinking enough to use 5 min charts as signals in themselves (I only grabbed this as it coincided w one of my swing entries) but use them more as warnings.

  • BKXtoZERO

    short CL via DWTI 262

  • BKXtoZERO

    aaand for the ultimate WTF…. long DUST from 4 (lol) intraday only! (I’m up 😉 just trading what I see with a plan. I’ll trade your uncles monkey if it looks like a solid play. Not revenge etc, just a play at inflection for my lens

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

    ES 1909 proving difficult, I think we burst higher though. 1916 or 1920 are what I’m looking to short.

  • BKXtoZERO

    trailing stop hit EDIT risked .05, made .30

  • ridingwaves

    ES gets thru 1915 and it could go much higher

    there could be an ID setup on NG today and I might take a chance on long with stop at today’s low dependent on close…

  • BKXtoZERO

    I have an “errors” sheet on my records, with DUST 2-3 weeks back, I basically ignored my mental rule set that had been treating me well. I had no solid context for putting it on. It was a reversion to my old style of WTF trading that got me in trouble years ago. I wrote my rules out more recently since then. The difference today was a solid plan with a solid stop and that shall be the case for every trade going forward. Stay hungry, no fat lazy half hearted attempts at anything.

  • Objectively_Bias

    It might not get there… short term breadth is still rising but price action is not following. Buyers may give up w/o even breaking 1910.

  • http://evilspeculator.com Sir Mole III

    Looking at the Zero I think TOS fucked up the automatic scaling of the chart again. Bloody wankers…

  • Mark Shinnick

    Yeah…but also a great place to explode upwards from….just loaded with inflection. Its been a messy year and this is one good point of recurring truth.

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

    Boom goes the dynamite. Next up, 1916.

  • Objectively_Bias

    Internals at overbought levels now…waiting for a confirmed reversal signal to go short

  • CandleStickEmUpper

    Short 4179

  • Objectively_Bias

    Nice entry, I’m waiting for another signal to fire then will join 🙂

  • OzarkHillBilly

    I can only concur, strongly. I toyed with it a few days ago (seems like an eternity in this market and I didn’t mention it then because of our counseling of Kudra re: DUST) for an attempted gap-filling exercise from the 11th. I didn’t lose, per se, but the more I looked at it, the more like it seemed as if my time would be better spent on another train.

  • Yoda

    Yep it’d be nice to see a negative div on zero beforehand

  • ridingwaves

    shorts are going to get mugged if it gets thru 1922

  • Objectively_Bias

    I personally don’t think their is enough powder left in the keg but we shall see.

  • mugabe

    amazing turn around today … just lost 1R on my ongoing short SPY trade .. back to breakeven:)

  • Mark Shinnick

    Yeah…was a bit heavy TVIX overnight; it made up for most of the last 2 weeks modest net drawndown. Sure hope this rally correction can continue somehow…seeking more 8 handle or better TVIX.

  • Yoda

    It could push up to the volume gap at about ES 1970-80. If we breach the daily 50 sma on SPX (1946) and retrace more than 50% of the drop since last December (at about SPX 1962), we could see a lot of bears throwing the towel and new (weak) fresh bulls coming in. This would be the spot I would be interested to go short risk.

  • Mark Shinnick

    Sure hope that can happen.

  • Mark Shinnick

    Nor really do I, so am a bit hair trigger on the TVIX.

  • mugabe

    mole said expect the unexpected, but I’m not sure what the unexpected is here:)

  • ridingwaves

    shorting at 1922 makes sense but I don’t see it pushing down much past 1915 now…gets thru this 1922-3 mess and then it gets risky to short until your 1946 area…they will have to gap it over night or weekend for 1970 but I have 1980 as ultimate screw the bears and then turn and screw the new bulls..great place to oversize a short trade…but it has to get there first

  • Time Bandit

    Well I might have been set free today. Free at last. Free at last. 🙂 I have worked my ass off trying to fit general equities via RUT, NDX and SPX into my systems for years using everything I think I know and you know what? No matter what, they just won’t fit without counting on luck and screw that. I can work my way around the Gaps in the Energy Sector and the Basic Material Sector but I just flat ass give up trying to fit the above 3 Indices into my plans. I could do it easily if I were trading futures but not ETFs and especially not Options. So for now, I have transferred more capital into my Forex Account and will stick with what works for me and that’s Forex, Energy and Basic Materials.

    And it’s back to my man Clint. “A man’s got to know his limitations. . .”

  • Yoda
  • BKXtoZERO

    Lunch time GIFT for me. I was managing 3 trades this AM and I thought I had moved my stop up on DUST 4.3 but I am still in. It was 4.15 initial management set point. Took a shower and saw it at 4.3 and figured I was out. Looks like I caught me a shooting star by happenstance.

  • BKXtoZERO

    left mine on. Looking to get TVIX license plates. Tattoo too much

  • ridingwaves

    the volume gap is ripe for distribution area….fills it for any moves up later…
    believe it or not I think we could see 1750 in March if 1980 gets hit

    screw everyone like a phillips

  • Yoda

    I generally agree with you, but I am in no rush to short it now. I let the trade come to me rather than chasing it.

  • ridingwaves

    obviously I’m not chasing, I’m long from this morning enjoying the carnage or feast…

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

    Really? Scott would be *so proud*. Let’s skype him right! now!

    words cannot, I….just….wow.

    I’m having a Mole moment. (jesuz H…)

    http://stupid.demotivationalposters.org/image/demotivational-poster/0811/stupidity-stupidity-demotivational-poster-1226826996.jpg

    I’m gonna take the day off. Drink some whiskey.

  • BKXtoZERO

    No, he would say better but still trading mistakes, records not calculated in R yet, need to define my standard position size and “normalize” all data from records to that, then figure out stats. He would have dinged me a plenty I am sure.

  • OzarkHillBilly

    I try not to add comments that don’t add value somehow …….. but wow we’ve had some fun days this year but this one might take the take cake (so far) when it comes to f-ing the bears.

  • BKXtoZERO

    no need to mess with things that don’t work well for you. I have my stable of horses that I either know well or am getting to know.

  • Time Bandit

    As Mr. Rogers should have said “It’s just another day in the hood”. 🙂

  • Yoda

    I have a CD of Kanye West for sale. I guarantee that it is an original with no other copy ever made. I’d sell it to you for the low price of 10.000 bitcoins.

  • ridingwaves

    time to drink some wine up in Sonoma…letting long plays run thru Friday just possible Monday…

  • Objectively_Bias

    Short order in for 1925.75

  • BKXtoZERO

    don’t even know who these people are. Stopped listening to radio in 1985, stopped watching TV in 1996, don’t read MS news, listen to music primarily from 40s to 70s, jazz, Brazilian, classical, soul, funk, country (some). but none of these new bone head no talent idiots

  • Billabong

    I answered the CL question from earlier today….

  • Objectively_Bias

    Filled

  • BKXtoZERO

    sounds like a bias………….

  • mugabe

    i don’t think ozarks is some sorty of permabull:) .. or bear

  • Billabong

    The market this week has been a freaking nut job … Mon net down 4 figures, Tue net up four figures (positive two days), Wed up almost five figures morning session … afternoon session net neutral. I haven’t seen this much wild swinging on a daily basis since 2008-9.

  • mugabe

    she cannae take it much longer, captian

  • mugabe

    the yen is a beacon of stability .. always up:)

  • Billabong

    To Kyle Bass’ chagrin…

  • mugabe

    didn’t know that .. used to listen to him. now don’t listen to anyone re what will happen … more interested in people talking about process … even if they keep on saying the same things (PS that is NOT aimed at Mole)

  • Time Bandit

    Did you ever look into the Red Baron B-Plane Ride?

    My power went out and has since come back along with a Tornado Warning and it’s still sunny out. This goes right along with the craziness in the markets.

  • Billabong

    It’s always good to listen to the best of breed; see what they’re thinking. Ivan summed it up the other day when he said you have to look at the opposing view.

  • mugabe

    I think the best of breed usually don’t make bold predictions … I do read a few blogs though, and follow a select few at stocktwits, but they aren’t of that ilk (in general)

  • OzarkHillBilly

    “Best of Greed” hahaha I’m going to give you full credit for that one, even if you didn’t mean to say it.

  • mugabe

    very freudian slip:)

  • BKXtoZERO

    Loving it.

  • Billabong

    Half the battle is trying to avoid correlated trades. A small grouping of non-correlated positions would be ideal. Although, jumping on a trend and shifting from thorough bred to speculative positions as the trend progresses is sweet…

  • BKXtoZERO

    I know, just trying to keep team member grounded

  • Billabong

    They don’t call it weather forecasting because it’s a fact…

  • Billabong

    LMAO …. 🙂

  • Time Bandit

    FBOW, I put humpty dumpty back together again in my account today minus the NDX. I believe that no matter how nutty it gets, I’ve got to stay on plan. As you implied, this ain’t the first time the markets have pulled this shit nor will it be the last. If I had been on my current plan in 2008 and 2009, I would have made money. I happened to make money in 2008 because I was a Perma Bear waiting to be taken to the slaughter house in the future. 🙂

  • http://evilspeculator.com Sir Mole III

    A bear trap it was indeed!

  • http://evilspeculator.com Sir Mole III

    For some reason I seem to be the only one who’s not getting any responses in the comment section – on my own blog!

  • http://evilspeculator.com Sir Mole III

    Juicy divergence on the Zero during today’s lows on the spoos:
    .

  • BKXtoZERO

    U R Loved………..

  • http://evilspeculator.com Sir Mole III

    Not enough apparently.

  • mugabe

    Peter Brandt’s current take on the market based on charts – bearish, but not catastrophically bearish

    http://www.peterlbrandt.com/is-the-present-decline-in-sps-a-deja-vu-of-2011/

  • Time Bandit

    Shit is starting to hit the fan weathewise. Raining hard with another Tornado Warning. See ya all tomorrow unless I get sucked up and join Dorothy on a visit up to the Land of Oz. 🙂

  • captainboom

    I’m getting whacked hard with very heavy wet snow and wind in SW Michigan. Everything is closing down for tonight, roads are shit, and likely everything will be closed tomorrow.

    I heat with wood. I have a generator, and lots of fuel. I expect to be warm, dry and online if I want to be.

  • CandleStickEmUpper

    Stopped out of my nq short from 77. Still up for the week, but down for the day.

  • BKXtoZERO

    not sure if you saw my post last night but I credited you for my huge change in mindset and performance. It is most often at night when I can finally digest much of what I read here.

  • BKXtoZERO

    I didn’t see anyone chatting about the post topic today but probably same as me it is a tad dense to comprehend while managing entries if you get up 10 minutes prior to mkt open. 6:30AM for me. Thanks for the post and well…. everything.

  • phylum

    Exacery …. if you have a RBT (system) that wins only say 30% of the time … will you still be profitable?

  • phylum

    at best!

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

    Hmm so he thinks we tank from here. A possibility but I don’t get the logic of since the analog from 2011 doesn’t apply, therefore we are going down instead of up. That said, I get the sense that most bears are expecting retest of lows or something close instead of a big move down so perhaps it is still a possibility since noone is expecting it?

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

    Seems like the two scenarios most popular I see are retest of lows or testing 2000 in SPX but not just falling to new lows immediately

  • mugabe

    absolutely everything is a possibility, unfortunately
    he’s basically saying that, according to his reading of the charts, the medium term trend is down … don’t think he’s saying anything about today or tomorrow.

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

    Yeh I guess he is saying no test of 2000 . That’s what I meant by tank from here.

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

    and your thoughts on his previous analyses?

  • http://evilspeculator.com Sir Mole III
  • Time Bandit

    Good luck and stay warm Captain!

    TG for a generator. We dodged a bullet because I think there were a couple of tornados that hit about 50 miles away from us. All we got was some strong winds and rain. We lost power for a little while and I only had to run my generator for a couple of hours.