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Lost A Few Pounds

by The MoleAugust 21, 2017

It seems like we were subjected to an enforced trading diet late Friday, and apparently it’s working since as you can see my abs are starting to show. By the way, sorry if you just lost your breakfast. Obviously this isn’t a big surprise to anyone as fast drops/advances *ahead of medium or long term inflection points* usually are quickly followed by a shake out. Pay attention now as this is important: Especially on the sell side the dynamics shift considerably once those inflection points have been breached, as violent selling usually tapers out more slowly before a bounce.

Meaning you see one or two shallow corrections which are followed by more downside as volume participation slowly abates and then eventually allows buyers to step in and defend a prior or new support zone. On the upside things evolve similarly but are usually not as violent for extended amount of times (i.e. usually only for one session or two). And there you have it, your weekly lesson in tape reading. I wanted to share these key observations as many younger/newer participants may have rarely witnessed highly volatile sell-offs. And although we are a long way from a new bear market it’s good to not get mentally locked in ever repeating patterns expecting the same in perpetuity.

2017-08-21_spoos_update

Alright as many of you are on vacation I was planning to keep things brief for the day as I actually have a mountain of work to attend to on the coding front (yes, new toys and systems are in the works). So let’s review which of the campaigns are still alive and kicking. Fortunately the E-Mini short campaign is one of them as it magically survived the quick stab higher last Friday. I got extremely lucky there it seems as my ask near 2440 didn’t get filled and I hope that you were as fortunate given that the futures have continued to point down overnight.

2017-08-21_spoos_LT

The daily panel isn’t giving us much to work with in terms of projecting a possible flow as the 100-day SMA hasn’t been tested since the second Boer war. But the 25-week SMA near 2400 seems to line up nicely with two weekly NLSLs at 2405 and 2410, which is where I would expect the bulls set up defenses.

2017-08-21_TF_update

The TF campaign wasn’t as lucky and I’m out at ~1R in profits. Heck, these days being able to profit from any downside correction in equities seems to require a PhD in quantum physics, so I’m not too unhappy as this one seems to be the laggard of the bunch anyway.

2017-08-21_gold_update

Gold also got taken to the woodshed and fortunately it was at break/even. In retrospect I may have advanced my stop a wee bit too early but then again, intra-day volatility has really punched holes into any traditional campaign management rules. Usually when I see a hard advance higher I don’t expect it to turn on a dime right away for a revisit. When it does there usually is a second entry opportunity, which is what I am going to look for today and possibly tomorrow.

2017-08-18_silver_update

As you may have guessed, silver is also out at break/even. This is very unfortunate as I’m pretty convinced it’s going to keep pushing higher now. Pretty miffed about this stop out as I’m already seeing it push toward the 18 mark. Grrrr….

2017-08-21_copper_update

Fortunately the copper campaign survived a pretty nasty retest and thus far we seem to be in good shape here. I’m advancing my trail now to below 2.943 in order to lick in a teeny weeny bit of profits but give it space to run.

2017-08-21_bonds_revisit

Since we’re on the subject of stop outs as well as tape reading: Remember that bond campaign from earlier last week which got taken out at break/even? Well, there was a dip lower which then was followed by a punch higher and then a revisit of our entry zone. This would actually have been a brilliant re-entry spot but I somehow missed it, probably because it happened mid-session (remember I am in Europe with different hours).

It’s a shame because these types of formations which feature an unsuccessful attempt to breach major prior spike lows do have a higher probability of succeeding. Yes, sometimes this devolves into a sideways mess but we deal in probabilities here and not in absolutes. I encourage you to often revisit some of your prior campaigns and then review how prior entry levels often serve as support or resistance zones.

2017-08-21_Dollar

So let’s talk Dollars, people. Old bucky is starting to droop lower, just as I feared. Thus far the bulls have a very good chance of painting a meaningful floor pattern here but if it drops through 92.7ish (typo in the chart, sorry) then things will get ugly for the greenback.

2017-08-21_EURUSD_update

Which is why I’m pretty happy that I hedged myself accordingly last week. I have now moved my stop to break/even as it is starting to look like that NLSL and the 25-day SMA are going to hold.

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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.
  • OzarkHillBilly

    Just wanted to be the first to say “nice post Mole.”

  • bravenewworld2011

    What about oil Mole? USO looking like a last kiss goodbye (I know it’s an ETN, but I think fund flows make this the tail that wags the dog)

  • StockTalker

    /NQ sliding

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

    …all seems to be happening in relatively slow motion so far but still seems out character to prior recent correction.

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

    Just an FYI: :) USO is an ETF and not an ETN. USO actually holds Oil in its portfolio.

  • StockTalker

    Another tech bubble

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

    Really is dramatic looking charting

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

    ..I would have to be by the sunny window.
    Solar parties. ARGH, can’t get (real) work. done.

    USD.
    https://uploads.disquscdn.com/images/71229526dd49c6512c11972521f0e8d48e23bb5244c7dae31f269e66349e1813.png

  • OJuice

    Complete /CL face plant. Friday was so promising. And today… not so hot to say the least.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    I choose my crude entries very wisely just for that reason. And then there’s the constant roll-over – tough market reserved for the pros.

  • http://evilspeculator.com Sir Mole III

    And the only one apparently!

  • http://evilspeculator.com Sir Mole III

    If I don’t mention it then I usually do not see an entry. See above – I choose my crude/oil related entries very wisely, which probably extends to the rest of the energy sector. Highly volatile complex markets.

  • BobbyLow

    Crude was one of my best trades for years and was a perfect fit for whatever system and or time frame I used. But not anymore. I might have missed a couple of good trades on crude over the past few months but I also missed out on a lot false signals as well.

  • OJuice

    Still have 1/2 my position from $47.30. Half got taken out earlier this morning on a trailing stop. If it can’t retake $48 today I’m sure the rest of my position will be stopped out. Not a disaster, just disappointing.

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

    looking at USO, it’s the critical part of a turn.
    if median supports fails, watch out.
    if median support holds, watch out.
    😉

    https://uploads.disquscdn.com/images/9d840e34584bf0809407cf6a887f48bd87192b22421f9e9ca84460e0e1ffde19.png

  • bravenewworld2011
  • Tomcat

    I napped through the entire eclipse. Very proud of myself!!!

  • BobbyLow

    I was going to wait for the one in the year 2047 but my daughter brought me over a pair of glasses and I was able to see this one instead. :)

    We weren’t able to get a full eclipse where I live but got about 97% of it. Pretty cool actually.

  • OzarkHillBilly

    You didn’t miss much unless you were very close to the exact path. I was at approximately 90%, and I bet most people would not have even noticed. No viewing devices, but I could certainly see a distinct difference in the ambient light, especially looking around the horizon. Out here in the woods, it became very quiet, and the usual animals and insects settled down and stayed unusually still. The lone exception was a single bat that flew over my head.

  • Tomcat

    I like suns that don’t get blocked.

  • http://evilspeculator.com Sir Mole III

    Damn, looks like this was the last time in what I expect to be the remainder of my life (unless those life extending super drugs come on the market soon):

    https://uploads.disquscdn.com/images/8106defef3c8721528f2ef1a90054a5474165b1358e48804d7eeeec6abb5666f.png

  • BobbyLow

    I would really like to catch the one in 2099. Perhaps someone in my extended family could put a pair of viewing glasses on my urn and point it toward the sun. :)

  • Ronebadger

    70% here in NY…non-event…just got a little spooky…was a bright day to start with, then just got slightly less bright…back to work…

  • OzarkHillBilly

    For all of you former EWT followers out there, what was it that Prechter used to write all of the time ……….. “The strongest declines often occur in already oversold conditions?”

    Anyway, that comes to mind today. I’m not saying that happens just yet, but I’m thinking it as I look at some short term vs long term charts. No positions currently. If I was a long term investor, however, I’d be selling some rips when they came my way.

  • saltwaterdog

    I trade it and am testing the hypothesis that my returns would be far greater if I skipped the week of the roll.

  • http://evilspeculator.com Sir Mole III

    Ha – but at least we’ll get a total lunar eclipse next year – wohoo:

    https://www.timeanddate.com/eclipse/in/spain/valencia?iso=20180727

  • OzarkHillBilly

    What about April 8th, 2024?

  • http://evilspeculator.com Sir Mole III

    jejej – we’ll just freeze you and then thaw you right before.

  • http://evilspeculator.com Sir Mole III

    Only a partial one, right?

  • saltwaterdog

    We are in the totality path in Charleston SC and it was a pretty cool event to witness. It is quick but at the precise moment the total coverage occurs you can take off the glasses and the ring around the moon is refracting in an amazing ROY-G-BIV way for about 45seconds. Was worth the wait but I’m glad I didn’t travel for it.

  • http://evilspeculator.com Sir Mole III

    You lucky bastard – I never saw one in my life – sniff…. :-(

  • OzarkHillBilly
  • Ronebadger

    When I’m 126 in 2079, I’ll have the best view on Long Island…but, I will have probably moved underground by then

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

    that reminds me.
    has anybody looked at potential ribbon turnover?

    http://i.investopedia.com/inv/dictionary/terms/Avg_Ribbon_050906.gif

  • http://evilspeculator.com Sir Mole III

    Doesn’t show me anything a regular pair of SMAs wouldn’t, but hey whatever works for you.

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

    because it’s 2/3’rd Evil.
    😉

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

    NYC had about 72% eclipse. It did get a bit dark here and the sky looked like the way it looks when its about to thunderstorm, then it turned sunny again. Moving on.

  • bravenewworld2011

    Today is evil-free. Horus has vanquished Set and we’re good to go until December 22.

    My USO trade however is not good – being as I never took it.

    XIV is the gift that keeps on giving though. Mole, I still think there is value on analyzing price movement of the VIX contracts the day before, of, and after expiration. Might find a statistical anomaly worth exploiting.

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

    It’s awfully pretty. Personally I just pick a decent pair of EMAs do the same thing.

  • sutluc

    July 2 2019, central coast, Chile.

  • StockTalker

    /HG has run into resistance.

  • http://evilspeculator.com Sir Mole III