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Make Or Break
97

Make Or Break

by The MoleOctober 26, 2009

We are now close or at the eight month support line that the bears were unable to get near of, let alone breach:

Come to think of it we bears are now actually in a very fortuitous situation – the very top of this market is not that far away, I mean we’ve rallied hundreds of SPX points and we’re 30 away from the very peak. VIX is very low still and we are now starting to get wedged inside various resistance and support lines. The bulltards have been running like hell but we’re getting very close to the point where they’ll have to show their cards. What’s it gonna be? 1120 and higher? Or is this the end of the line?

As you know I went into cash on that first spike up on Thursday – yes, in some ways I’m kicking myself but then again, looking at today’s rip up a lot of doubts could have happened in between, nerves were already running thin this morning. So, I’m not going to rush this – let those fuckers either rip it up or buy into a retest of an actual support line breach. Let’s analyze the tape a bit more before we make any big moves and let’s make sure that this is not yet another massive bear trap. As GWB put it so aptly:

Right, something like that – back in the box with you, Dubya…


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.
  • PRSGuitars

    Repost from last thread:

    DX out of channel to downside but approaching 20 sma daily so, might drop back a bit…

    money flows divergence on the daily, too. Might this really be it?

    ES @ monthly vwap right now (1066) and, oddly enough, divergently oversold on RSI hourly. Holding my long /es hedge (1063 entry, SWEET!) against a large put position I'm delicately trimming on the way down… if nothing else, I can hang on for teh incredible disappearing selloff later today (aka, afternoon ramp towards 1075 again).

    SPX holding TL from a few days back, too, still, so wait for a small bounce before getting gutsy chasing things here — I see 1072-1075 /es before this is all over unless they just choose to quickly liquidate the bulls before they know what hit 'em.

    Really quite frustrated I didn't hang onto my 1087.75 shorts from this morning but what can you do. I realize I am not quite a great position trader, trying to hang on for the large ride — but still, ARRGGHHH. K, got that out of the way.

    These are the days that frustrate everyone. Few bulls saw it coming and believe me, fewer bears. Those of us who stuck it out are happy but paying the price every day we DON'T get a huge catastrophe like this. What chaos. Vix @ 24 again, phew.

    TICK about to go oversold divergently for a push lower here — I suspect a lunch flat-to-rally between 1066 and 1070. Might get crushed again 1-130 pm EST but we'll see what the boys do when back from lunch.

  • tradejane

    What a wonderful day for daytrading, it's starting to feel like old times. :)

    DAX broke the 5.700 and broke it good. 5.640 on after-hours. That 5.500 target is starting to look pretty tangible. Commerzback at 7.80!

    PS. Hey, Dreadwin, I answered your question a few posts back. So glad I waited with UYG.

  • http://www.hotoptionbabe.com annamall

    Hey gang I am back and so happy I put on my pink bear costume this morning…hehehe

    100% short

  • gmak

    I don't know if it got posted earlier or if it is old news but the Obama admin has been signalling that they would likely extend the $8K home buyers credit. However there are rumours going around that it will be cancelled. I'm not sure if that rumour would push SPX down like it did – but there it is for what it's worth.

  • Bart7

    what is 100% short for you, short your entire freakin account?

  • http://www.hotoptionbabe.com annamall

    No no all my positions are short hehehe I am always in about 50% cash :)

  • tradejane

    That better be a rumor. Germans used to have a 16K home buyers credit, home prices took a big hit once that got canceled.

  • http://www.hotoptionbabe.com annamall

    Because of all the fraud! they had some crazy number of fraudulent cases, there was a 4 year old that got the credit Huh? LOL

  • gregn

    Am I the only one that sees a bull flag in SPX?

  • Eva S

    I'll wait till end of day to confirm that the US dollar is going higher. I'm staying in cash till then.

  • gmak

    Probably. lol.

    On what time scale.

  • PRSGuitars

    And a separate comment: Mole you have done excellent work despite being rather frustrated this past week. You deserve more from us, too, and I promise to deliver today after the close.

    I have been AWOL too long and was even (gasp) trying to have a real life this weekend for once. That is all over now and it is evident the timing couldn't have been better.

    Goldman-Sachs branded rubber phallus? Check
    Handcuffs? Check
    Rammstein? Du hast. (no, i know you don't hate)

    I would also like to point out to everyone that the daily chart wicks on any of the indices are VERY foreboding:

    http://screencast.com/t/ywye77Sbm

  • gregn
  • raised_by_wolves

    If the line holds and the market goes up, I wouldn't call it a “massive” bear trap, Mole. I would only call it a mild bear trap. To be massive, a bear trap has to defy gravity.

  • http://dreadwinaard.livejournal.com dreadwin

    Good thing you didn't pull the trigger on that trade! Looks like XLF has a weak bounce off of the 50 MA. I'm amazed at the strength in IYR. SPX is down .9% and IYR still up .4%! Every dip is *still* getting fiercely bought in real estate.

  • PRSGuitars

    And that last low was still within TICK trending up — watch if EUR makes this push a divergent lower low near 1.4875 and then rips higher (DX bbreaking 76 but weakly, we'll see — creeping its 1.0 std dev from VWAP band to the outside, ie, upper…)

  • http://www.hotoptionbabe.com annamall

    Very Short Gold via 103 puts :) yea

  • gmak

    FYI: The daily SPX is sitting on the edge of the mid-Bollinger I wrote about earlier today (Pre-market). SPX didn't fall through, so it is support for now. There is a thin line between support and diving board, but also between support and spring board.

    I think after all we have seen since March, it would be anti-climactic (but profitable) if this were “it”.

  • goldfishka

    Anna, great call on market to drop in the mid of rally. i followed you and now doing my happy dance :)

  • standard_and_poor

    Repost from this Saturday:”Waiting for one more furious drop, fair chance that elliot abc will be contained by the 1067 to 1071 I mentioned last Sunday. If that area holds I'll be buying back some longs and going to 75%-85% long.”

    I'll crap in my pants and yours if today's 1066.31 SPX holds. Possibility of one more drop to about 1066, if it holds I'll buy back a few longs.
    I'll also crap if it doesn't hold but won't close longs just yet.

  • gmak

    Russian banks are accepting pigs and lingerie as collateral. Can pigs IN lingerie be far behind. lol

    http://www.bloomberg.com/apps/news?pid=20601109

  • gregn

    I picked up a few calls. I think we will get a bounce to fill that gap between 1082 and 1085.

  • molecool

    Evil Speculator now acccepts hot Easter European super models as collateral.

  • http://www.hotoptionbabe.com annamall

    That girl on the runway up top looks like s concentration camp victim YIKES that's horrible Mole :)

  • tradejane

    I actually expected a $dji drop to 9850 first and *then* a bounce to 10080 area. When it happened the other way around I just switched sides. Closed all shorts as I expect a nasty retrace. If not, I can always re-open them. :)

  • gannsecret

    Dollar participants all leaning short
    Stock marker participants mostly leaning long=

    panic into dollars
    Panic out of stocks
    998 next stop

  • http://www.genxantihero.blogspot.com LostIllini

    +1 for showing face.

  • Bart7

    I'm watching a downtrend line on UUP that is putting up resistance so far. Does look like the dollar bottom is in, but could chop around a bit before breaking out is my best guess.

  • gmak

    That SPX=1066 is a support pivot, and the daily mid-Bollinger. I wouldn't be surprised if it holds.

    I have overhead price exhaustion at SPX=1074.30 and the pivot above that (which was support but tore like wet kleenex) is at 1079.72. (all this on a 5 min SPX chart).

  • CorporalCarrot

    I suppose from the bulls perspective, it gives them the hope they can whip the 10k hats out again.

  • upld2

    As GW put it so aptly! ROFL

  • raised_by_wolves

    Like a crouching tiger, I'm watching and waiting and ready to pounce. If AMZN touches my imaginary line, I will short the hell out of it via a put spread.

  • upld2

    Too thin is better than too fat.

  • evilpossum

    So….. where is your imaginary line?

  • http://www.hotoptionbabe.com annamall

    both are nasty on men as well as women!

  • raised_by_wolves

    Oh, you want to see that?

    http://screencast.com/t/sxHqMdacV3

  • gsavli

    Nah, it's going straight to 150.

  • http://www.hotoptionbabe.com annamall

    I am on the same page Raised, this bitach is going to roll over and when it does whacko!

  • http://www.bigmovingstock.com bigmovingstock

    That is my all time favorite Dumbya vid, lol – check out the VIX today – it's really popping. VIX Jumping, UUP jumping, Financials Falling, not really bullish events

  • http://www.hotoptionbabe.com annamall

    Loving short Bidu perfect topping scenario today :)

  • Blind_Squirrel

    http://www.bloomberg.com/apps/news?pid=20601087

    Home tax credit extension possible

  • Eva S

    I agree with some analysts that AMZN is like WMT of the early days, or even better. I would not dare short it.

  • tradejane

    >I suppose from the bulls perspective, it gives them the hope they can whip the 10k hats out again.

    Imo, they'll whip those hats out just long enough to throw them to the bonfire. But *cough, cough* that's just my opinion. Not even I will be trading that without a stop.

  • Bart7

    those damn realtors etc. have so much lobbying power… let free markets do what they need to do to correct price imbalances….

  • raised_by_wolves

    What I've shown you is a 133 of a 133 extension. Hitting 150 would require a 133 of a 133 of a 133. That's only probable if the overall market breaks out.

  • CorporalCarrot

    The number of days recently where it looks like the bid just completely disappeared from the market, is screaming distribution and nervous hands. I had closed out some of my shorts at 9930 DOW and 5230 FTSE and re-added at 10,002/10,040 and 5,260 FTSE after the late day drop that got bears excited. Initially that looked a bad decision but I'm holding now. That day reminded me of Sept 23rd when the arse fell out of the market following the FOMC meeting.

    I think the turning point, the “show me” time for this market is the US GDP figure this week. I think the market is going to sell off big time following that release. An “end of recession” is already priced in. Its set up for major disappointment. Look at the UK figure. All that QE and they still couldn't manufacture positive GDP.

    The US figure will probably be positive, but not to the extent priced into the market. I think the last few days has seen the pros getting short for the next leg down. When GDP is released, no amount of spin or bullshit is going to disguise what will be apparent to everyone; when you strip out the money printing, and the effect of the rising stock market on the gdp figures, its going to be patently obvious that the recession lives on, and is heading for depression.

    All the real fundamentals are bad and worsening, and its only a matter of time until the market reflects this fact.

  • CorporalCarrot

    Incidentally, sol is trading this tape like a demon. He went short again as the market turned down again lol.

  • http://www.hotoptionbabe.com annamall

    Expect a short covering a rally in the DXY and when that happens watch out belowwwwwwwwwwwwww

  • anthem

    great trade anna. kicking myself because I missed that. .. was too busy celebrating my ES drop. .. that one looks sweet. AAPL looks pretty good as well but VIX isn't playing along. A little hurt by my amzn shorts but not a big deal. Expected some sort of retrace which didn't happen. . .

  • Niktus

    Just today the difference between FTSE and DAX is ridiculous…

  • charles_smith

    Not to get anyone's hopes up but if Mole's trendline breaks today then we could get a real waterfall. Agreed, GDP will push the market over the cliff but smart money anticipates that so why wait til Thursday to dump?

  • TheMacroEconomist

    TIPS auction went pretty well, 0.77%, with bid-to-cover ratio at 3:1. Indirect bidders took 47.8%.

    Might be go long USO again if DXY can't break thru resistance at 75.90.

    Not sure why after selling USO this morning, I didn't turn around and short it (or buy DNO, the short USO) during the ride down. I was tied up at the option screen trying to get IWM puts off, sort of lost track of oil there for a bit.

  • centerline

    FWIW, remember there is a POMO on Thursday.

  • TheMacroEconomist

    No, I disagree with that. GDP seldom provides any real surprises because it's kind of like a summary of many other reports that have already come out, like Industrial Production and so on.

    That's not to say there couldn't be “sell the news” on GDP, but I'm more interested in Consumer Sentiment tomorrow.

  • Bart7

    last one?

  • onorio

    EUR down 200pips from HOD….does this means USD bottomed?

    I was planing to cover my short arround 1.4860, but i will wait to see until we can get….this could be a hell of a squeeze!

  • centerline

    I believe so. Can anyone here confirm?

  • TheMacroEconomist

    At this point I'm not expecting anything. 😛

    Just watching the tape because there is a feedback loop in effect. Lower equities pile people into the USD as the safe haven (isn't that a bit of a laugh tho, hehe.)

  • raised_by_wolves
  • Bart7

    market starting to shrug off the dollar strength a bit….? dollar near the highs, market well off the lows….

  • BillyRayValentine

    Evil Speculators – I would like to make the leap to trading Full Time but believe I should take some formal training first. Do any of you know anything about the following Prop / Training firms or recommend anyone? Thanks!
    – Online Trading Academy
    – T3 (NYC Prop and training firm)
    – SMB (NYC Prop and training firm)

  • PRSGuitars

    Hey i (oddly enough) have been squawking about DX bottoming since last week — the DX channel is crucial and i think we're breaking out of that (though we're at the 20 sma Daily at the moment) so we have some work to do, certainly, but, I think this is the early stages.

    Besides, at this point, why not toss your hat into the ring and call a dollar bottom? That's what I did.

  • TheMacroEconomist

    And I mentioned before the open this morning about DX pulling into a wedge. Price wise and traded volume wise.

    Let's see if it can really sustain a break out into the 76's on DX (DXY making it to 76 too).

  • ultrabär

    BIDU 1min – still hoping to get in on this bounce – http://screencast.com/t/j7HgY3Z8I

  • skynard

    Dollar still looks strong here.

  • Bart7

    but the market is shaking it off for now…

  • TheMacroEconomist

    I know a guy at SMB, they are a very structured / disciplined day trading only firm.

    Mostly equities using multi-day support levels and Level II to get an edge.

  • skynard

    Those bulls are stubborn,yes.

  • TheMacroEconomist

    Long on USO since $40.19, we'll see…

  • Sleepynaptime

    Hmmn. Same day they release the GDP numbers, no?

  • http://www.hotoptionbabe.com annamall

    Hi Mac

    Can you believe that there is a 97% short position in the $DXY?? well there is and Gold/Oil/ commodities bubble about to burst :)

  • http://www.hotoptionbabe.com annamall

    Mac, did you see Dr Realistic this morning LOL He looked kinda cute :)

  • gregn

    I bet Mr. Soros owns that position.

  • http://www.hotoptionbabe.com annamall

    Hi Gregn, which one the $DXY long or short?

  • anthem

    Yeah, but WMT of the early days never had PE of 75. . . .

    I think AMZN is a great company and people didn't think they'd grow into its current scenario (into everything outside of books). But it'll take a massive itunes type of revenue stream (with their kindle) and then some to get them to where they are priced at now. . .

    Basically their 68% is a good thing but it was based on lowered expectations. The question is whether they can sustain that type of growth for several more consecutive years which is where I doubt. ..

  • TheMacroEconomist

    I got a feeling I'm gonna not win on this USO bet.

    BTW notice GLD finally caught up with USO today. I don't think the gold traders thought the USD would hold it.

  • gregn

    He would definitely be on the short side.

  • skynard

    Is AMZN single handedly holding this market up for now since financials are down.

  • TheMacroEconomist

    Hehehe. :)

    I switched here to Dr. Doom for the downside party. :)

  • http://www.hotoptionbabe.com annamall

    I love that guy! :)

  • http://www.hotoptionbabe.com annamall

    Well he might just get creamed on this one :)

  • http://trading-to-win.blogspot.com/ DavidDT

    “Pigs IN lingerie”?
    What country has the most obese people?

  • TheMacroEconomist

    I got the funny feeling that with the mutual funds' fiscal year ends coming up this week, many don't want to have a lot of big bad banks listed as holidings in their annual reports.

    Plus there's this government limiting the executive pay thing there. I mean that would be a great idea IF they had the execs under employment contract so they couldn't quit and go elsewhere…

  • molecool

    You can tell by the horns.

  • skynard

    and how Mole…… Still mending.

  • Hanuman

    Dear Mole, Please excuse my ignorance; but is this your actual picture or some known celebrity?

  • newbear

    I guess you missed his more then friendly picture with Tim at Slope.

  • Hanuman

    Sorry, I haven't visited Slope for many many days now. What did I really miss?

    Thanks.

  • 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„¸

  • molecool

    Peter Jones – he's another 'evil speculator' 😉

  • skynard

    Right on. Month end this week too

  • newbear
  • http://dreadwinaard.livejournal.com dreadwin

    Looks like you got your $DJI 9850 — did you go long?

  • tradejane

    Yes, I did. I started a very small position in UYG at 5.73, simply out of discipline rather than conviction. 😛

    Like you I'm very confused by this divergence in Real Estate and banks and I wonder if it has anything to do with the numbers coming up this week. If that's the case UYG could stage one heck of a rally.

  • http://dreadwinaard.livejournal.com dreadwin

    Wow. Disqus with the late notification…

    I followed my plan and got into DRN yesterday at 118.75. Currently hanging on by my fingernails. I'm expecting 1080 on the SPX Wednesday.

  • tradejane

    I kept the UYG position because I suspect we might get a bounce to 1080 as well. Hedged it with a nice dollop of SRS which I closed at the end. Will repeat the process until I know where I stand.

    Good luck to you!

  • http://twitter.com/tradejane tradejane

    I kept the UYG position because I suspect we might get a bounce to 1080 as well. Hedged it with a nice dollop of SRS which I closed at the end. Will repeat the process until I know where I stand.

    Good luck to you!