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Monday Morning Briefing
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Monday Morning Briefing

by The MoleDecember 30, 2013

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

Obviously we’ve had little activity post Christmas and the 25-hour BBs are pretty compressed as would be expected around this time of the year. However I do like that 100-hour creeping higher and on the TF I’m going to risk a long here with a stop below the SMA.

Similar configuration on the NQ – here we are wedged between two converging SMAs plus there’s a NLBL sitting right on top of the 25. So I’m waiting for a breach to the outside – up or down.

A few more FX goodies for my intrepid subs:

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Heisenberg Update: Last night in the comment section I posted a EUR/CAD 60min long entry as it was triggering. Here’s what happened since:

As you can see the system took profits at 1.2R and immediately re-entered for 75% of the units. That’s a little work around since Ninja7 has an internal bug that prevents us from simply dropping 25% of the units. On the upside it does make logging a little bit easier. Since then price swung back down but did not touch its original stop. Then it continued higher again – and that is almost textbook behavior and I touched on that in my little write up I posted yesterday (now copied to the Heisenberg page – still work in progress). We reached the 2R spot where we advanced our stop to the break/even point. Let’s see if this one takes off now 😉

UPDATE 12:30pm EST: Campaign came to an abrupt end two hours ago:

Fortunately our stop was advanced to the b/e point as we briefly exceeded the 2R mark. So we basically ended this campaign with a profit of 0.25R. Better than a kick in the shin 😉

If you missed it – you still can sign up for the free Heisenberg beta.

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.
  • Dyellowflash

    Hey mole, the 0fx is down..

  • http://evilspeculator.com molecool

    Oh f…k today is not my day it seems…

  • Dyellowflash

    Back on! Cool, thanks! The 0fx is really useful as its forms the basis of half of my trading signals for those two pairs :)

  • http://evilspeculator.com molecool

    Thanks for letting me know – I was about to hit the gym 😉

  • Skynard

    /NQ leading the way:)

  • Skynard

    Move coming, nowhere tape. Hum, EOY profit taking.

  • Darkthirty

    Layover DJI / DAX. Is this what you’re looking for?

  • Skynard

    Printed doji, now ID/NR7 today. Would rather see a nice red candle here:) Volume much to low, hugging the 25 hourly. Loose 420 and down she goes.

  • http://dartht.blogspot.com/ Heisen_Gerb

    EOY. you said a mouthful.

  • Skynard

    Could be, shall have to see. Would have expected more movement although the day is early:)

  • Skynard

    Yen & T Bonds on the move:)

  • Skynard

    Mwahahahaha:)

  • CorporalCarrot

    Hi all, hope everyone had a great holiday and at least some of you managed to participate in the magnificent rally we had off the Fed Announcement or at least weren’t short all the way (although somehow I think not). I have just unwound the remainder of the trading longs I took on that glorious day. Here’s how I see the current state of play.

    Essentially the last several days have been a low volume meltup and some of those days had all the hallmarks of computers trading against each other with perfect ranges and channels you could have drawn with a ruler.

    As such, I think there has been little true price discovery since approx Dow 16150 which needs to be re-tested. The question is when.

    Obviously I don’t know the answer to that but the tape for the last several days has shown all the hallmarks of big money being very happy to end the year where we are. As such, I’d be surprised if we corrected before 2nd January, and there are no technical signs I can see at present that justify a short position.

    This year is also missing a lot of the requirements for normal things like tax loss selling (as pretty much everything went up this year) and from speaking with some people in the industry, this is also causing people to hold off on portfolio repositioning until January.

    Therefore, IMO the odds favour an early January correction to test the breakout and as people reposition for their 2014 theses before we continue the bull market.

    I will trade what I see, but if we hold these levels or particularly if we can print another two range bound/inside days or rally on nothing tomorrow into the close, I will be putting on short Dow positions as close to the end of trading as I can.

    I would expect any correction to find new support circa 16100, and my medium term expectation is for 17k by end March as people start to believe in the recovery.

    I won’t be checking in for a few days as I think this is gonna be a snoozefest until the 2nd.

    Happy new year all.

  • Darkthirty

    Not sure where this “recovery” is, but my industrial customers are all on hold, ie not investing in squat. Retail clients are holding the line also with a massive amount of empty space. Another 150 K fall off extended benefits…..

  • Skynard

    Just around the corner, we are a part time nation of squat! Careful with those long John’s:)

  • Sean

    What’s actually happening on the ground is irrelevant… the market only cares about headlines and hope… right now PMI’s are solid around the world, and US GDP and unemployment is “improving”, and corporate profit margins are still good, which is all coupled with tons and tons of hope that we are starting to see a recovery… it is going to take at least a few quarters of eroding margins and poor economic data to eat away at the hope that is floating this market, and that hasn’t started yet… I’m not saying things are actually good nor do I expect them to get better, but the market doesn’t really care about that. The market is Keynes’ newspaper beauty contest, so it doesn’t matter what you think, the only thing that matters is what the majority of the participants think everyone else thinks, and for now it seems everyone thinks that everyone thinks we go higher from here… I’ve spent the last few days looking at a lot of different market metrics and we have a lot more room to get even more irrational, and 2100+ on the S&P 500 by the end of 2014 would not be an outlier (of course neither would sub-1200)… I’m not levering up and banking on either outcome, but it shouldn’t surprise anyone if either actually happens. Also, I don’t think we get a spectacular crash here either (the 50% – 70% a lot of bears are expecting), the one good thing about this ridiculous monetary policy the world has implemented is that it should slow things down enough for anyone that is following the data to get properly positioned for a change in long term trends… but the great thing about the skills we try to hone on this blog is that it doesn’t matter what I, the Corporal or Keynes thinks will happen, we just look at price and price doesn’t predict, it just is. It doesn’t tell you if it is going to 17k or 10k, or if it will find support at 16.1k, it only tells you those things after the fact. We can look at recent price action and make a guess as to which direction it might go in the near term, but the edge isn’t based on our special ability to correctly guess direction or to “know” something about where price “should” go… 90% of the edge is derived from smart campaign management rules that cut losers early, let winners run and protect profits, and then doing that consistently day in and day out… thinking you “know” something about what the market “should” do over any period of time is a good way to eventually lose most if not all of your money (unless you actually do have some special ability, but that is not 99.9% of the people out there).

  • Skynard

    Looks like volatility want’s some action:)

  • newbfxtrader

    Amen brother. Better to trade the charts than running after fundamentals. Never did me any good.

  • Darkthirty

    I don’t trade long term, so I don’t look long term. The market can run wherever it cares to, in the real world, things are getting uglier…..still stocking barterable commodities with unlimited shelf life.

  • http://dartht.blogspot.com/ Heisen_Gerb

    I agree with most of your comments.
    (frightening)

    ya’know – the S&P100 hasn’t hit a new high …yet.
    http://s11.postimg.org/xl4zj5zxd/the_danger.png

  • bdoone

    VIX +8.2% with an unchanged market

  • Skynard

    Lol, what does that tell ya:)

  • Ronebadger

    It tells me that either the VIX is going to go back down, or stocks will go down soon.

  • Skynard

    Protection from the sharks:)

  • bdoone

    Creeping a few % higher is one thing but +8% with the Big 4 all green?..Cheap protection I guess since big boys can’t dump volume into such a thin market

  • Skynard

    Surprised crude did not make 100 daily:))

  • Cravenmorehead2

    How about that phuckin GC crazy Ivan……gorgeous

  • http://evilspeculator.com molecool

    On the 30? It’s doing pretty well over here – did it fuck anything up on your end?

  • Cravenmorehead2

    On the 30…..that’s what I was talking about……several very nice opportunities to grab that big move….

  • Cravenmorehead2

    About ready to pee my pants over the heisenberg……CAN’T WAIT for the e-mail alerts……is the beta going to run 60 and 240 min alerts?

  • http://evilspeculator.com molecool

    Yes, 60 and 240 – but we’ll rotate the charts as we see trending symbols.

  • Cravenmorehead2

    Nice. Is this going to be a blend of Crazy Ivan and Ken Long’s RLCO techniques??

  • phylum

    Happy New Year SS Rats!

    Mean while, not far from Scott’s place http://www.housosvsauthority.com.au

    Any how I’m looking for a long on EURAUD, good luck to ya all in 2014

  • http://dartht.blogspot.com/ Heisen_Gerb

    I_Berg,
    (your) T6 missed a top, but if you averaged the lows in June, not by much.
    perhaps you could customize the MACD to get it spot on?

    If I drew T8 correctly, there’s possibilities to watch ..three months out.
    if you get a ruler, SPX just keeps going up, JBTFD. (wink wink)
    http://s24.postimg.org/6zmqvyrlx/iberg_new_Year.png

  • http://ibergamot.blogspot.com/ i Bergamot

    Thanks for looking this up, mate.
    I have several concerns regarding T-Theory.
    #1. Center-post position!
    I remember how Terry (may he rip) used to move it from left low of Volume Oscillator (conservative) to right low (as Null Echo or double top). Other times he would average the lows. All looks fine in hindsight (and attracts subscribers) but doesn’t help in real-world trading. The whole point of T – is to allow to leisurely sell at the top. Small change in centerpost position can move end date by weeks!

    #2. Oscillator settings.
    This MACD is a very close alternative to T-Theory Volume Oscillator. I tried to change settings, but it doesn’t get any better. I do notice that smaller T’s (less than 3 months) have lower reliability. Also, all winning T’s had multiple touches of down-sloping trendline (3 or more). Terry plotted this oscillator himself, using WSJ numbers (I think). I hope we are getting accurate data from StockCharts…

    FWIW there is a pretty big T with end date in Summer 2014, as well as one you sketched above.
    NOTE: So there is no confusion, I name my T’s according to centerpost position. Your purple T8 is the same as my VOT12/2013 (Volume Oscillator T with December 2013 centerpost)

    PS. You don’t sleep much, do you?…;-)

  • http://ibergamot.blogspot.com/ i Bergamot

    Thanks for looking this up, mate.
    I have several concerns regarding T-Theory.
    #1. Center-post position!
    I remember how Terry (may he rip) used to move it from left low of Volume Oscillator (conservative) to right low (as Null Echo or double top). Other times he would average the lows. All looks fine in hindsight (and attracts subscribers) but doesn’t help in real-world trading. The whole point of T – is to allow to leisurely sell at the top. Small change in centerpost position can move end date by weeks!

    #2. Oscillator settings.
    This MACD is a very close alternative to T-Theory Volume Oscillator. I tried to change settings, but it doesn’t get any better. I do notice that smaller T’s (less than 3 months) have lower reliability. Also, all winning T’s had multiple touches of down-sloping trendline (3 or more). Terry plotted this oscillator himself, using WSJ numbers (I think). I hope we are getting accurate data from StockCharts…

    FWIW there is a pretty big T with end date in Summer 2014, as well as one you sketched above.
    NOTE: So there is no confusion, I name my T’s according to centerpost position. Your purple T8 is the same as my VOT12/2013 (Volume Oscillator T with December 2013 centerpost)

    PS. You don’t sleep much, do you?…;-)

  • Skynard

    Full short now on the re-test

  • http://dartht.blogspot.com/ Heisen_Gerb

    all valid concerns, of which I have no solutions.
    on this chart above…have you tried switching to weekly?

    ps. Sleep is for closers. Always be closing.

  • http://ibergamot.blogspot.com/ i Bergamot

    Darling, I thought you’d never ask…;-)
    See chart below
    more in here:
    http://ibergamot.blogspot.com/

  • Skynard

    Dollar hourly

  • http://dartht.blogspot.com/ Heisen_Gerb

    lesson learned, throw out the red T. overlapping T’s are bad form and fail more than succeed.

    ps. The red T almost points to a low. but the overlap statement still holds.

  • http://ibergamot.blogspot.com/ i Bergamot

    I thought about that.
    On one hand it make sense – if left side of T is cash build-up (selling), and right side is cash redeployment (buying), then in a perfect world they will not overlap.

    Since late 2011 it was an ubnormal market, as far as T-theory concerned – index is often rising during cash build-up phase. May be it means that as large-volume operators exiting and raising cash, just as new participants entering the market? Maybe its more and more leverage deployed…Reasons are not that important.

    T-theory had some questionable periods before. it may be unsuitable for crazy bull market like ours

  • Rightside_ot_trade

    /PL hourly sell line reversal, Inside period failure to continue downtrend just above the 25/100 ma convergence

  • http://dartht.blogspot.com/ Heisen_Gerb

    interesting outside candle on gold.

    last day of year, could be some short position closing.

    who knows.

    http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=1&dy=0&id=p28953746828

  • Skynard

    Buy, buy buy, yes,yes,yes. Happy New Year All! Must have an early close today.

  • CorporalCarrot

    Hi all, just checking in. Yesterday/today exactly as expected so far. Light volume melt up. Look at SPX 1 minute charts – ranges bound to the tick – computers doing most of this – no major human decisions will hit the market until the 2nd. No genuine price discovery since 400 Dow points ago. I know I said I would wait until close today but am starting to build a short position here in the Dow.

    See you on the 2nd/3rd have a great New Year all and here’s to banking serious coin in 2014, no matter how that is achieved.

  • Skynard

    We have an extreme reading on this indicator now, can hardly believe it:)

  • Skynard

    Wow, nice move on PM’s.

  • ridingwaves

    I like your March time frame listed below…if the 10 yr stays around 3+ until then I would expect a sell off to chase some people into bonds, need to push rates down for the home sales and price topping summer 2014

    Happy New Year to you and yours!.

  • http://evilspeculator.com molecool

    How’s everyone? Sorry for being quiet today but I’m kicking back a little before I’m taking off full speed starting the 2nd. By the way – past midnight the rates go up by 20%. So if you’re on the fence then today is the day to lock in those ridiculously low prices.

    Happy New Year!

  • ridingwaves

    Feliz ano nuevo to you and yours…Mole, you ment’d Heisenberg as 24/7 trading, do you think it will work with someone whom doesn’t have ability to take 50% of setups? work pays mortgage thus I can’t give it up…

  • wandering196

    zerofx not working?

  • Skynard

    Hehehehe, their they are, see if gap support holds:)

  • http://ibergamot.blogspot.com/ i Bergamot

    Santa got lost?
    Old man…

  • CorporalCarrot

    It’s only a rough road map at the back of my mind, nothing set in stone. And in actual fact, I see the risks as being to the upside and the opposite of the bond effect you mention. Funds that have been invested in bonds have suffered a lot of pain and lost opportunity in 2013. The human pressure of this hasn’t reached a peak yet, and I could easily see an exodus from bonds into stocks providing more fuel for this equity bull market that could see 17k reached much sooner (heck we are only 450 points away from it now!!) assuming the dislocation didn’t spook the markets too much with interest rates rising.

    Historically however, bull markets last for quite some time after interest rates start rising and central bank tighten (despite popular perception that the instant rates go up it all falls asunder), and I think that as the market matures it can take a 10 year up to 4% before that starts to weigh on matters. You should know that despite what they sell you on CNBC about the criticality of the 10 year, big fund managers will be looking at the shape of the curve & inversion rather than the absolute level before they start to get worried about rates.

    Anyway, I’m comfortable with short entries here between 16550-560 and looking forward to 2014.

    I’m off to a party (its 20.20pm over here) so this is definitely my last post of 2013 can I just wish you all good luck and hope you and your families have a happy new year!!!!!!!

  • http://evilspeculator.com molecool

    Quite honestly – you would have to devote yourself to being able to take the setups during your waking hours. I’m not going to sell you guys a story for another sub – if you don’t have the time to trade then why bother? There is no such thing as a free lunch – even with a kick-ass system.

  • Skynard

    Whoa!!!! Volatility rocks:)

  • http://dartht.blogspot.com/ Heisen_Gerb

    just got back from the DMV with 100 of the (finest) Untermensch of the state.

    Happy New Year!

    http://thisishardcoreshow.files.wordpress.com/2010/01/ratty.jpg

  • Skynard

    Wow, TNX going up! Broke 30 today.

  • http://evilspeculator.com molecool

    A day a the DMV – last time I went there was on Dec. 24th a few years ago. Perfect – nobody there.

  • SS_JJ

    Happy New Year Rats!
    Wishing you a cold as fuck, emotionless new trading year.

  • http://ibergamot.blogspot.com/ i Bergamot

    Happy New Year!
    Wishing all a profitable, healthy and enjoyable New Year

  • Dyellowflash

    Hey mole, just want to write a short note to thank you for making the ZL and 0FX available for subscription. I have been using it for a total of 16mths now and they had improved my entry and exit pricing by a large margin. In fact, the advantage of trading with ZL has even made me decided to move this April to UK and Spain(during winter mths) to match the WS trading hours to maximize its powers. My take is the ZL is best during the opening 1.5hrs in catching a fake early mkt move and again during the last 2 hours in catching a strong continuation or reversal move :)

    Motto for 2014 – Bulls or Bears, Time to Maul Them All 😉

  • Skynard
  • newbfxtrader

    Its a bull market ya know…. Seriously we are entering the parabolic phase. I would not be shorting this one.

  • newbfxtrader
  • http://dartht.blogspot.com/ Heisen_Gerb

    agreed. if parabolic is underway, I wonder what the (larger) Bond market will do?
    or perhaps the dog does wag the tail, Bonds are as less attractive so money is flowing to equity returns?

    http://the-moneychanger.com/images/charts/Bubbles_Chart5.jpg

  • newbfxtrader

    No need to guess. The 30 yr is breaking to new lows. So stay short until proven wrong….

  • http://dartht.blogspot.com/ Heisen_Gerb

    a snoozer for past few months, i’ll keep watchin.
    [TBT 20yr]
    http://stockcharts.com/h-sc/ui?s=TBT&p=D&yr=0&mn=9&dy=0&id=p40450865318

  • newbfxtrader

    https://www.tradingview.com/x/HwdK8F56/

    TBT is leveraged. Take a look. Nice downtrend. Pullback and back to previous low. If this consolidation doesnt hold get short.

  • http://dartht.blogspot.com/ Heisen_Gerb

    go go gadget gold.

  • Skynard

    Parabolic? This market has been on steroids and now must consider the consequences of using those drugs:) Nice call on gold re-test.

  • CorporalCarrot

    Hi all, been some fun here at the European open this morning. Took short at the opening pop on the DAX (9620), FTSE (6769), CAC (4305), IBEX( 9926), and the MIB (19056). All are working nicely particularly Spain, and excellent entries as everything hung at the pop for a few minutes (so I effectively top-ticked) except for the MIB. I need to query my fill on that thing unless the opening candle was bogus because of the FIAT crap. No matter 4 out of 5 aint bad and its still ITM although should be much more.

    Anyway on 12/31 we had the closing ramp out of nowhere that i called for a couple of days ago in the Dow which filled a bunch of orders I had left on there prior to going to my party just missing the 16600 by 4 points.

    Will be interesting to see if YM/ES follow Europes lead on the open.

  • Dyellowflash

    Way to go… fast off the blocks! Unfortunately, I have too little data to trade this week. Vix calls held around Xmas looking good so far and shld net me a few Xs if mkt can drop a few days 😉

  • CorporalCarrot

    YAY!!!!!!!! KABOOM!!!!!!

  • CorporalCarrot

    lol it helps that I’m based here in Europe. Se the alarm for 6.00am this morning. Was thinking of getting involved in the Aussie/Japan session but didn’t feel it and waited for the Euros to see if my info was good.

  • CorporalCarrot

    I’m surprised by the way noone pointed out the massive divergence at the close on the Zero (below) which showed that the closing ramp was just painting the EOY and not real at all.

    All the massive volume brought to bear to engineer that ramp still left the daily volume 36% below the 50 day moving average for the SPX.

  • CorporalCarrot

    dont know why chart didn’t attach.

  • http://evilspeculator.com molecool

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