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Limbo Central
168

Limbo Central

by The MoleJune 13, 2012

Make no mistake, this woodchipper of a tape is intentional and has but one single purpose: To keep you guessing, press your buttons, and lure you into overtrading – all of which easily leads to losses and psychological weakness. I’ve been glancing over the comment section and unfortunately see way too much time being spent on making sense of this furball. Don’t try to stroke your own ego – you won’t be able to figure this out – the tape always will be smarter than all of us combined. It’s almost as if some of you guys haven’t been reading my posts, so let’s try this one more time:

If you haven’t seen my weekend post on market weather pattern then now may be a good time to take a look. May I in particular recommend the part describing limbo periods? Anyway, I have said it before and I’ll say it again: Unless we breach either 1270 or 1330 there is zero edge here. Welcome to Chopfest 2012 – bring a raincoat. Since some of you seem to learn the hard way let me serve up a platter of additional evidence:

JNK:TLT seems to be in sync – no divergences means we have no additional information suggesting that credit knows anything more than equity. NEUTRAL.

Copper continues to point down. Has been a pretty good guide this far so this one ranks BEARISH.

AUD/JPY – long term. That one is pushing ahead slightly of equities. BULLISH.

Not confused enough? I hate to say it but I’ve got more – please step into my lair:

[amprotect=nonmember]
More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
[/amprotect]
[amprotect=1,13,9,12,5]

VIX is now dancing at the 20-day SMA – putting us into NEUTRAL territory.

NYSE Volume ratio – advancing vs. declining. Looks like we are pushing up  strong which would be bullish. BUT we are also right at the 3.00 mark which recently has been a reversal zone – and that’s bearish. So let’s call this one NEUTRA to be fair.

NYSE Issues ratio however is pointing up – I call this BULLISH.

And here we are looking at NYSE stocks above their 50-day SMA vs. the ones above their 200-day SMA. Bullish as it has pointed up but bearish as we are stuck at a major resistance line. Another one putting us into the NEUTRAL zone. Scotty – beam me up now!!

Bottom Line:

These are the kind of times financial bloggers hate the most. I would love to serve up  heaping platter of setups but I am not able to confidently recommend much I would put my own coin on. The exception being two small plays that may keep you busy for now:

EUR/USD – we are right at the 25-day SMA. It doesn’t matter where this puppy swings – I would take it either way. Use that 25-day SMA as your delineator and put your stop on the opposite side once we see it either reverse or breach.

Then there’s Natgas – actually not a bad setup – we all love an inside day coupled with an NR4. You know what to do – if not then please check the cheat sheet.

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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 various social media waterholes below.
  • neowave

    Possible you can’t zoom in again?

  • ronebadger

    “the tape always will be smarter than all of us …”

    (but surely not “… all of us COMBINED”?!?!)

  • amokta

    The BORG collective has been defeated before?

  • amokta

    Where is everybody – are people watching Germany v Holland (or is that Netherlands)

  • http://evilspeculator.com molecool

    Sigh – somebody kick me… alright it’s fixed. Sorry guys.

  • http://practicalt.blogspot.com/ Darth_Gerb
  • http://practicalt.blogspot.com/ Darth_Gerb

    didn’t you hear?
    MOle is glancing at the comments!
    my L*rd!

  • StrikeFirst

    If we close at around these levels(on the /es), would today count as an inside day?

    It’s awfully close.

  • captainboom

    I have today’s high at 1321.25, above yesterday’s high of 1320.50

  • captainboom

    Nice post Mole.  Short and to the point.

  • amokta

    Unfortunately (or fortunately?) i have to report Germany have scored a goal :-)

    Anyway, market moving to downside, but still wood chipping territory

  • tradem4alpha

    for those of you who have very reliable TICK data, what is the minimum that you see? stockcharts shows around -1250; would like to see -1300 or -1400 for real capitulation.

  • AMCabrera

    If I may. The markets are not smarter or dumber its just a market always fluctuating correcting itself. However, what vexes me is since we were all pretty much in agreement that the chop chop was going to happen WHY not play the chop chop for those who play the S&P. I say no the market is not smarter it just doesn’t feel anything unlike most traders who feel fear and greed.

  • amokta

    Ok, whats happening, why is my hair on fire ?!?
    If we take out yesterdays low, then is it Naughty Nightie moment?

    Still, Moles Prelude de Limbo must be respected

  • captainboom

    I’ve got about -1350 on IB.

  • Joe_Jones

    Alright, that was fun. Closing half of short position and call it a day. Got a steak to season. 
    :-) 

  • captainboom

    Bear steak for Skynard this morning, bull steak for you.  Nice work today gentlemen.  You may have some coffee 😉

  • amokta

    Me too – closed it all (overall profit with losing short yesterday, didnt want to hold any longer!)

  • newbfxtrader

    I have been. using rsi 70/30 on hourly to buy and sell aussie. so far so good.

  • amokta

    Yet again, should have held longer !?!

  • Joe_Jones

    Thanks Cpt. Boom! I’ll add some Scotch into it. 😉

  • StrikeFirst

    Shoulda listened to Mole.

    Developed a long bias.

    Was up, but gave it all back.

    I keep forgetting that cash is a position.

  • StrikeFirst

    That’s alright though.

    This is actually very exciting.

    When the market finally picks a direction I’m gonna kill it.

  • amokta

    Bias is so dangerous!

    I went long before our spx 126x bottom, and was down when market drop 30 handles!
    I suppose for (day) trading one has to roll with the punches, and stay unbiased
    Money management – i am increasingly of the view that once a trade ‘jumps’ into profit, to set stop at b/e (give or take a little) – if it stops out, then so be it – the big money was not to had in that trade at that point in time. As to when to take profits, CS said when you feel like you should let a winning trade keep on winning, thats a time to close all or half! (no doubt there is the more formal move stops up up to 1R, 2R, trailing stops approaches

    Having said that, position trading/investing requires holding on with conviction – going long at March 2009 bottom! Needless to say, the conviction needs to be backed up !

  • http://pulse.yahoo.com/_IF7HINHIP5ITYT6TDHACMWJUXQ Huisok
  • newbfxtrader

    We need a Locutis…

  • AMCabrera

    I took profit from the AUD/USD short.. Still holding that EUR/USD short and  long USD/NOK positions.

  • http://practicalt.blogspot.com/ Darth_Gerb

    what’s a CCI? and why is it at 451?
    http://stockcharts.com/h-sc/ui?s=$CCI&p=D&yr=0&mn=6&dy=0&id=p42353048925 
    (poking fun at youknowho)

  • Skynard

    Dammit! Missed /ZS again:(

  • newbfxtrader

    Crap you are right. I missed it completely.

  • supervilin

    CT inside day, gents!

  • Skynard

    Noticed it was at the 61.8 level again, was not sure about it and thought it had more legs.

  • http://iberianviews.blogspot.com/ catracho

    repetition?

  • Skynard

    AUDJPY 79 holding strong, EURUSD turn to rally today.

  • amokta

    For more than 50 years, this world-renowned index has served as the most
    widely recognized measure of global commodities markets :-)

    I get it at 509.44 close?

  • MrMargin

    I though the some (not exactly that position though) that we had seen this kind of chop before around bottoms, but I wouldn’t bet any money on it. Also, some interesting statistics once again: http://quantifiableedges.blogspot.de/2012/06/ftds-on-moderate-volume.html

  • Skynard

    Check out /6S, volume just dropped off the chart today for some reason.

  • MrMargin

    ID on ZW, doesn’t look bad for a short to 598/579.

  • Skynard

    Like the /NG setup. Looks like it triggered ever so slightly.

  • thepercolator

    ID on CCN though its got flat BB.

  • StrikeFirst

    “Money management – i am increasingly of the view that once a trade ‘jumps’ into profit, to set stop at b/e (give or take a little)”

    ————————

    Oh I agree.

    Trading is easy – just don’t lose.

    Today, I let a profit turn into a loss.

    A cardinal sin in trading.

  • Skynard

     LOL! 10 points already.

  • Joe_Jones
  • Fibz

    wow, good way to lose all their customers… lol.

  • Rightside_ot_trade

    Do you mean july cocoa?
    It will switch to the September contract eod Friday

  • thepercolator

    Yes, CCN is July Cocoa. So, if you take the long you’ll want to be out by the EOD this Friday, if you play the short side you’ve got more time to exit.  IMHO only play the short side since its hitting the 100 Day EMA which has been strong resistance the past 5 months and be aware of the flat BB which weakens the ID set-up.

  • http://evilspeculator.com molecool

    Warning customers ahead of increased volatility is a good idea. Closing up shop altogether is a bit harsh I concede – perhaps doubling margins and lowering leverage may have been a better idea. May be too difficult to execute however thus they decided to pull the plug.

  • simonn1080

    Im getting Target 1158 – 1170 area by fist of july.. give or take +3/-3 days… Lets see how this goes…

  • saints51

    Reading it now. Maybe Greece is bouncing out the EU? Its anybody’s guess why this is being sent out by Oanda.

  • AMCabrera

    Yup, can you imagine though. Think about it last Sunday I was already up 100 pips before Sunday 3 pm I took profit remember. Jesus I almost feel like this is my fault blahaha!

  • AMCabrera

    I agree, it is why I always talk good about them. They really are a straight shooting company.

  • AMCabrera

    “If you do intend to maintain open positions during this period, be aware that OANDA will hold exchange rates steady during the trading halt. However, when trading resumes, rates will immediately adjust to the current market rate and it is possible that the updated rate could result in a margin closeout if the price has moved significantly against your positions.”
    That is what is amazing. Because you normally can see the movements live on weekends and place trades however with wider spreads. SO if this means not only can you not place trades but cannot see live prices either until the update at 3 pm then shit will be wild especially coming from Oanda.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/172c1889-5fde-4592-bcdc-fbfb0d3d1711/2012-06-14_0711.png
    well I’ve gone short NZD/USD and Still have the short in EUR/USD. The only two position I currently have.

  • Skynard

    Taking /ES long here at support.

  • bdoone

    Any details or reasoning? Just curious.

  • Schwerepunkt

    almost no reaction to jobs/cpi numbers. Weird. Maybe we are at a bottom? [starting to creep down now a bit. Test 1300?]

  • http://evilspeculator.com molecool

    Why do you worry so much about the news?

  • Skynard

    Possibility, 4 pt stop. Thinking we rally from here on all the downgrade and horrific data:)

  • AMCabrera

    If NZD/USD reaches 7820 I will add short the overnight low was 7720 so perhaps meets in middle of that range.

  • MrMargin

    Flipped my NG trade.

  • http://iberianviews.blogspot.com/ catracho

    EURUSD holding pretty well in face of all the “Bad” headlines…shorts may get a wake up call soon…

  • http://iberianviews.blogspot.com/ catracho

    AUDUSD 8 hr…

    which way will it go?

  • Skynard

    Yep, me too:)

  • Schwerepunkt

    You and I have a fundamental difference of opinion on this question. I’m a former newsman.There is NO DOUBT in my mind that these releases do add volatility short-term. 

    This volatility has to be considered, at the very least, for the size of stops going into a release. I don’t trade the news, but I am always aware when news is scheduled. 

    Would you go long ES with a 1 or 2-pt stop when NFP is about to come out? No, you wouldn’t. It is GUARANTEED your stop will be hit. But you might have a super-tight stop in the middle of the day when things are flat-lining and there are no news items — especially on a trend day. Even a 5-10 pt stop might not be enough held through release of NFP. 

    I don’t follow the content of the news so much as the reaction. A bad news item that the market shrugs off, is a bullish sign, and vice-versa. 

    If you go to any currency trading sites, news is a central focus. Are they all wrong and/or stupid? I doubt it. 

    If you own Google or Apple, or any stock for that matter, wouldn’t you want to know when the quarterly release is and perhaps adjust your stop, lighten up, take profits/losses, put a hedge on in advance? Or, you may still be building a position and want to use news volatility to add. Many people refuse to hold positions through a quarterly release. Anything wrong with that? Not in my mind. Does that mean you are trading the news? Not really, you just don’t want to deal with news volatility.

    I may be in the extreme minority here, but IMO saying “news does not matter, period” is not a very helpful statement. I agree with you that news should not be the basis of a trading strategy. Trading should be driven by the charts, but it is not mere  coincidence that great price volatility occurs just before and after an important news release and that the charts often reach a key support/resistance level just before a big news release.  

    I suppose you could obviate the need to be aware of news if you use gigantic stops, but even that is a trading strategy that takes into account the volatility of news. And it has real consequences for trading. large stops means you are less likely to be stopped out, but when you are, losses are greater. 

    That’s my basic argument. News volatility needs to be accounted for in how one trades. Ignoring it completely, IMO, is a mistake. 

  • MrMargin

    Needs to break the 100-hour SMA or we’re going nowhere, but at least the 25 and 50 still hold.

  • Schwerepunkt

    News debate aside, Mole, I agree with you about this woodchipper chop zone. Market needs to decide where it wants to go and the levels are clear enough. Too bad it’s a 70-pt range though.

  • Skynard

    Hourly and 5 min signal constituting a lower high.

  • Skynard

    Been waiting for a while to get long this vehicle:)

  • bdoone

    Woodchipper is right:  Just look at 1st 20 mins. Rut bid, Naz offered, SPX/DOW undecidely schizo.

  • http://practicalt.blogspot.com/ Darth_Gerb

    now it all makes sense.
    ;-)http://www.twilightzonemuseum.com/autographs/h-k/images/autoknight1.jpg 

  • Skynard

    Time for the squeeze again:)

  • http://practicalt.blogspot.com/ Darth_Gerb
  • AMCabrera

    EUR/USD getting close to my stop 

  • ronebadger

    Brick wall approaching…..maybe, THIS time’s the breakthru???

  • Skynard

    Staying long for a test of the most recent high. ZL says so:)

  • Joe_Jones

    I’ll reload shorts if I see a neg div on 5 min ZL 

  • http://practicalt.blogspot.com/ Darth_Gerb

    UUP 22.63, just sayin

    if it doesn’t hold. 22.50 range

  • Skynard

    Yep, Damn thing has been giving good signals as of late:)

  • Rightside_ot_trade

    /SB above 25 DMA again after holding hourly 100 MA
    early this morning

  • Joe_Jones

    Personally I don’t think so. Bulls are tired from the energy they wasted the last week trying to. The brick wall should have been breached last Monday, but wasn’t.

  • Skynard

    DXY lost 82 again, this time don’t think it crawls back:)

  • Joe_Jones

    Still no neg div with JNK:TLT too. Sitting on my hands.

  • Skynard

    Seeing more green today.
    http://finviz.com/futures.ashx

  • MrMargin

    NG, bitches!

    EDIT: And out!

  • Joe_Jones

    Well, if VWAP doesn’t hold (after obligatory retest from below) I’ll reload short. Otherwise I’ll wait for the neg div on 5 min ZL with a new high on ES

  • Skynard

    /ES stop just below VWAP to capture some gains

  • Skynard

    Last day of trading this week, will be chilling on the beach for a while but will check in occasionally next week.

  • AMCabrera

    http://www.zerohedge.com/news/fx-markets-bracing-major-event
    This is possibly the only hoe I like from the place of ill repute. His stuff actually includes data and graphs. The charts are indeed interesting. It mentions Oanda again too.

  • Skynard

    Oh Nelly!

  • ronebadger

    MOLE, nice pick on the NG, took it long yesterday, small trade, short stop…no way would I have thought it would a short looking at the chart…Kudos…keep it coming

  • Joe_Jones

    OK. I got my cue. Reloading the short cannon. 

  • AMCabrera

    lemme help with that chain ball. Yea Im shorting NZD/USD again close enough to 7820

  • bdoone

    I was listening to the only other trader that I trust (other than EvilSpec, of course).  He echoed Moles ‘Chopfest’ until resolution scenario but said he’ll key on AUD/JPY TL from March hi thru April 27 hi to approx. 79.50 now.
    What AUD/JPY does there will help determine risk/risk off for equities.

  • Skynard

    What are you seeing on the ZL?

  • MidLife

     some arrows would be nice like yesterday

  • Joe_Jones

    Classic neg div on 5 min ZL with today’s new high. Add to that the neg div on JLK:TLT and AUD/JPY

  • Joe_Jones

    Yup would be nice

  • Joe_Jones

    Hehehe.. 😉 
    Coin banking time

  • MrMargin

    I think we may soon leave the chop zone. HG is coiling up and should resolve into one direction in the next hours of trading.

  • Joe_Jones

    Ooops. Got a delayed reading on JLK:TLT. No div on this one.

  • ronebadger

    stopped out on BOIL, nice one day pop….rarely see that….

    Mole + Luck = Coin

  • Joe_Jones

    It is there now.

  • Schwerepunkt

    Isn’t tomorrow triple witch? 

  • ridingwaves

    nice trade

  • amokta

    Ok, whats happening, has Greece won the election?

  • Skynard

    Reversed /ES

  • Schwerepunkt

    they’re pushing it; getting ready to fade this 

  • Joe_Jones

    Blue arrow!!! Finally. Bitch almost stopped me. Went short too early. Oh well.. 

  • Joe_Jones

    High at Europe’s close. How convenient…

  • Skynard

    5 min wedge broke down & the dashed line got a crossover. Looking for 1315 to hold before going long again.

  • MidLife

     quad

  • beentohardknocksU

    ? not seeing any blue arrows.  

  • Joe_Jones

    It was short lived

  • ronebadger

    but one of the witches dies at close today, and/or open tomorrow….didn’t they split them up a long time ago to make the markets “less volatile”?

  • MidLife

     gone soon after

  • http://practicalt.blogspot.com/ Darth_Gerb
  • amokta

    You could be right, bell-weather SIMO is not buying the rally

  • amokta

    Can anyone tell me why SIMO is underperforming today?

  • Skynard

    F this, long now /ES

  • Joe_Jones

    because AMC is wearing white socks 😉

  • http://practicalt.blogspot.com/ Darth_Gerb

    why I’m watching the dollar (Dollar Bears)

    http://s8.postimage.org/lzmrekipv/temp3.png

  • AMCabrera

    mmm perhaps you need to view my history of comments every time I have used F word and took a position or did not take a position,

  • Tronacate

    Like politicians are going to fix this……..the people need to be recapitalized…..not the banks

  • http://practicalt.blogspot.com/ Darth_Gerb

    if the people just had good dental coverage, the riots would cease tomorrow.
    ;-D

  • Tronacate

    A good start indeed…….drill, fill, and bill!!

  • http://practicalt.blogspot.com/ Darth_Gerb

    isn’t that the oldest profession in history?
    ;-D

  • AMCabrera

    and they dont match.

  • Tronacate

    Thought the EUR/USD was a little overdone….looked like a bearish wedge……short for a toe in the water….1.26100

  • Skynard

    First support @ 1317.25 is holding with dashed line crossover.

  • http://practicalt.blogspot.com/ Darth_Gerb

    Day 6, SPX basically nowhere.
    can you say THETA BURNNNNNN?I should be selling options.  then again, no nickels in front of steam roller for me!)

  • Skynard

    Perhaps the signal is pointing north and not sold on the short side. You may want to try it some time!!!

  • Joe_Jones

    Hehehe, I see blue again

  • AMCabrera

     Im just saying you need to be careful carving up your original plans.

  • bdoone

    We didn’t get the ‘usual’ post Europe-close push today in equities but bonds via TLT headed higher since 11:30.Hmmm…maybe just overthinking out of boredom with tape so far.

  • Skynard

    Intraday trading using the signals and instincts are telling me to make these decisions. Was long this morning, then reversed short and did not like that decision and went long again. Yesterday’s action made me think about today and saved 3 points in doing so.

  • Skynard

    1330 SPX will cut-em loose:)

  • http://practicalt.blogspot.com/ Darth_Gerb
  • Skynard

    Hehehe! Could be just as fast to 1335:)

  • Joe_Jones

    This is starting to look like the last muppet has bought

  • saints51

    It is JJ. 

  • Joe_Jones

    Helmet on :-)

  • beentohardknocksU

    OK – I see what some of you have been seeing.  The blue arrows that appear “mid candle” don’t count unless you have passed the five minute marker (i.e. the candle must be fully formed).  

  • amokta

    Im just thinking, is this a good time to buy facebook? :-)

  • saints51

    hehe helmet on . chin strapped locked

  • ronebadger

    today “might” be a trendday, so take the blue arrows with a grain of salt

    should I mention “BRICK WALL” again?

  • Tronacate

    Sticking with my EURUSD short……..probably move stop to breakeven and see how it shakes out

  • MidLife

    looks that way, keeps trying to bust above 1320, but nada

  • MidLife

     exactly. The challenge is that by the time the candle closes, you miss the scalp.

  • Tronacate

    Bucky is starting to show a little heartbeat…….not breathing yet

  • Skynard

    Bulls want some recognition today:)

  • http://practicalt.blogspot.com/ Darth_Gerb

    2.5 hrs sideways…..burn baby burn.

    SPY 134 calls, 11 cents.

  • http://practicalt.blogspot.com/ Darth_Gerb
  • Skynard

    Heres the  wind up………………Strike out:(

  • MidLife

    Not seeing it Sky. Are you looking at zero touches on the ZL and then bouncing up? Thanks

  • Skynard

    LOL, was watching that sym triangle an it looked like it wanted to break to the upside but failed. Was stopped out @ 1318.

  • Skynard

    Took another long /ES @ 1315 for the last hour of trading.

  • Skynard

    Cmon little blue guy, get it up!

  • ronebadger

    ZL not playing ball with the arrows…..yet?

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤ø„¸  N E W  „ø¤º°¨ 
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • Skynard

    Damn, bear raping going on now! WTF happened?

  • Schwerepunkt

    HOLYSHIT

  • bdoone

    G20 SOURCES SAY CENTRAL BANKS PREPARING FOR COORDINATED ACTION AFTER THE GREEK ELECTIONS
    -zh

  • MidLife

    wow

  • Skynard

    Please tell me you picked up those calls!

  • amokta

    Nice, but about SIMO?

  • Skynard

    Amazing, retraced the entire move!

  • Skynard

    Added on that move:)

  • Joe_Jones

    LMAO!!! Both sides got raped with sand today. Anyway, stopped out on that spike but reloaded shorts on the way down