The Honeypot

The modus operandi in equities seems to be set to maximum shake out today. Although I see only minimal participation on the Zero indicator the E-Mini has produced some wild swings and leaves everyone guessing as to where things will proceed next. Not an unusual occurrence given that we are curling around an important inflection point.

Compared with yesterday’s signal range we are practically flatlining today. But we have seen that in the past: A spike in activity followed by a resting period which either sends stocks tumbling or via sideways gyrations positions large buyers for another leg up. You may recall my earlier post on market weather which would qualify the current period as a honeypot. We are not in technical limbo but a shake out now separates weak hands from the real playaz. Maybe it’ll breath renewed hope into bears who were losing on a way up and may now feel tempted to double down.

If you look at the overall picture then it couldn’t be clearer. The volume profile chart shows us plenty of available volume near 1405 and the 100-day SMA breach is what separates us from another glorious Santa Rally. On the very short term panel we are also enjoying the aid of the 25-hour SMA, thus affording us a possible early alert system should things break down here. As long as this SMA holds and keeps on rising the bulls continue to be in good shape, little shake outs notwithstanding.

In the end however price speaks clearly and is never wrong. Yesterday’s inside day following an outside period (or you could call it an outside day) suggests that the bears do have a fighting chance here, even if it’s just for a quick shake out back to the 1377 NLSL. But the official daily short trigger does not take over until 1395 has been relinquished.

As you probably have learned the hard way – when it comes to trading there are never any guarantees. However there are times when the picture is rather clear (again I invite you to catch up on my market weather post) and this happens to be one of those times. Don’t let the tape fool you – we are at an important inflection point and all the pain incurred now will most likely pay off handsomely once this thing turns into a rocket (in either direction it decides to break).

Now this morning I suggested an entry in natgas, which I got after some obligatory whipsaw. If you are a sub then you may be holding a few long contracts yourself and probably know it’s not been an easy trade. The pain may pay off – the basic idea here was that the daily NLSL and the daily SMA would serve as additional support. This is a good example of how a short term trade may turn into a medium term setup. But if you missed this entry then don’t dispair – it just happens that we are getting another technical setup on the nutty stuff today:

More charts and non-biased 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.

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Cheers,

This entry was posted on Tuesday, November 27th, 2012 at 1:48 pm. Both comments and pings are currently closed.



  • Joe_Jones

    One thing is clear: next trend move is gonna be a biggy.

  • ronebadger

    I’m “guessing” Fearless is still sticking with … UP

  • badflightrisk

     $FSLR on the move above 26

  • AmazingLarry

    FSLR train pulling away.

    Watching a multi-week coil up in SWHC. Four inside periods in a row. Earnings next week. It’s counterpart, RGR is a few handles from all time highs. If the swarm around the gun counter at Cabela’s on BF was any indication of future performance, the fireworks could well worth the admission.

  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

    Wonders if there will be a contradiction – Long ES and short Gold – since both are linked to usd, I am seeing them jumping around in opposites – i.e. profits for ES goes up, gold goes down and vice verse :O

  • Schwerepunkt

    $TICK just fell off the plate.

  • amokta

     I thought Fearless had cancelled his new-high call?

  • bdoone

    And huge ES volume spike. 

  • http://profile.yahoo.com/ZSFIZYIMIRUV3BUXT77JQOHQII greg4

    Sold calls on NG, Can’t seem to break above $4.05.  Chickens way to bring some cash into my account.  It is “nutty gas”.

  • Schwerepunkt

    I thought he was a bit . . . evasive and “conditional” rather than prescriptive. BWDIK?

  • itslance

    So did equities.  They aren’t even trying to hide the manipulation anymore.

  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

    Alright, nice shake out.

  • Joe_Jones

    Lovely!

  • Skynard

    Shaking the tree:) Full long now the /ES

  • bdoone

    Shook it pretty damn hard: 100K ES in 10 mins:)

  • Joe_Jones

    Am I the only one short the market here? Certainly feels so…

  • Schwerepunkt

    I’m long USD.CAD, which is the same as being short the market. :)

  • amokta

    True :-)
    Fearless last week: “It’s looking pretty good for a significant low around Thanksgiving
    Day again for the sixth straight year. Too bad I will be on the road for
    one month.

    Have we seen “the” top already? It’s a possibility. The final market
    top of a cyclical bull market usually occurs approximately one year from
    the third golden cross (daily), and we were three months short of that
    time. Hence, I am open to that possibility, but I still have my eyes set
    on a new high some time in 2013

  • Joe_Jones

    Yeah!!! A drinking partner for after the close ;-)

  • itslance

    Maybe.  A 7 handle straight down drop in a few seconds doesn’t seem like a sustainable move to me.

  • Joe_Jones

    Really? Rocket moves come after honeypots, and I would not fight the trend once it sets

  • Schwerepunkt

    ‘Twas an Harry Reid fart that spooked the spoos. “Little progress” on the fiscal cliff talks, he tooted.

  • itslance

    Looking like you were right, Joe

  • newbfxtrader

    nope. I have a bunch of aussie kiwi shorts.

  • Joe_Jones

    Jump on board. Ain’t too late

  • Joe_Jones

    I have zero clue on how this pair works. Good luck.

  • http://ibergamot.blogspot.com/ iBergamot

     Now every Tom, Dick and Harry will be jumping in front of mic to get their 2 minutes of fame. A walking, talking excuse for oversize moves

  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

    Going to have some fun playing the shakers. Went long with a bloody 2-points stops. Nice enough since its 2-3 points above 1395.

  • bdoone

    ES 100hr SMA back in play: 1396.25

  • Skynard

    Bought the dip:)

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

    yeah, but was it the Fucking dip? ;-)

  • Schwerepunkt

    Yep, we’ve entered the twilight zone of a dysfunctional two-party political system. And the market will rise or fall based on the smallest butterfly wings.

  • Schwerepunkt

    Just foreplay.

  • Skynard

    Can’t go short right now, Seasonality would kill me:)

  • http://www.facebook.com/profile.php?id=100001131611045 Exar Kun

     Doesn’t matter after u bank a few hundred bucks and when ur stops is now at break evens for the rest :)

  • http://evilspeculator.com molecool

    4.05? What contract are you trading?

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

    today would  be a great day for a wide swinging Market video?

    I have just the song. with a Spanish flavor.
    http://www.youtube.com/watch?v=MOjMB7vA4MI

  • Joe_Jones

    My problem with the long side is that too many expect a Santa Rally right now. 

  • Tronacate

    S GC……and liking it

  • newbfxtrader

    Yeah but dont overthink it. Sell in May and go away would have worked wonders for you this year also last year. It just works. As for BTFD I need a bigger dip!

  • Tronacate

    Still s GC…..might add a contract if 100hr is breached……

  • Rightside_ot_trade

    Yep no touch just a bounce, holding of shorting /ES and because/TF no new intrady low

  • newbfxtrader

    Kind of risk on pairs. They go up when markets are on fire and go down when markets go down. So its almost like being short markets.

  • Joe_Jones

    It works…until it doesn’t. Right now, I’ll be happy if we could revisit the volume hole at ES 1388

  • Joe_Jones

    I see. Thanks for the explanation.

  • Skynard

    Yep:)

  • Joe_Jones

    nice play

  • MrMargin

    According to the latest CoT report hedgers are covering their shorts and shifting to almost net long. Whenever that has happened in the last couple of years, it was at or near a significant bottom. I wouldn’t bet against the smart money in this and expect the rallye to kick off soon. We also have positive seasonality, overall positive price action and internal strength and positive Fed action for the rest of the week. I really don’t see any reason to expect anything bearish of consequence for the next couple of weeks.

  • newbfxtrader

    Exactly my plan!

  • BobbyLow

    Don’t we go through this same crap every year with the US Budget? 
    And Greece?  The ole Greece card.  It’s all Bull Shit!

    This week, I’ve been experimenting with not opening any currency pair positions until after the 8:00 AM EST Hourly Candle has completed.  My Stops are adjusted if necessary after each hourly candle closes.  Any and all open positions will be closed out Win, Lose or Draw on or before the close of the 4:00 PM EST Hourly Candle of the same day.   And I’ll end each day in 100% Forex Cash.  

    Perhaps I’m crazy because this will prevent me from hitting home runs.  But fuck it.  I’ll just plan to hit bunt singles and work 9 to 5.   

    Right after last night’s close I cringed a little when Ivan commented about the 20 Pip Gap on the 5:00 PM EST Open of the EUR/USD.  This was right after I had closed my long position out at 4:59 PM.  But as it turns out by 9:00 AM this morning that 20 PIP Gap was gone along with another 20 PIPs.

    So far so good over the last two days and we’ll see what happens for the rest of the week.    :)

     

  • bdoone

    This couldn’t be scripted any better to screw both bulls & bears:
    ES above 25hr SMA as Reid goes cliff diving and ES drops 9pts to 100hr SMA (1396.25) just as White House denies breakdown and ES pops 5pts and bounces around now at ES 25wk SMA (1399.50ish).

  • amokta

    AT least one more hoorah, then :-)

  • Joe_Jones

    I don’t want no effing blue arrow messing with my dinner &#%$$!

  • Schwerepunkt

    You should change your handle to Effing Blue Arrow. LOL

  • newbfxtrader

    Dont worry. Your steak is safe!

  • Joe_Jones

    ;)

  • http://ibergamot.blogspot.com/ iBergamot

    yep

  • AmazingLarry

    The pile of bullshit is far deeper than anyone can fathom. Hate to talk about this nonsense on ES, but I was thinking “game over” in 2010.

    Are you still playing crude, Bobby?

  • bdoone

    Picture perfect!

  • Rightside_ot_trade

    Yeah I thought that “trap” comment interesting last night.
    I had added to my € shorts at 1.3004

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

    1396.245 – alert 100MA.

    Market Close < 5min

  • Tronacate

    Definitely a bear flag on NQ and ES…..taking out todays low as I type

  • amokta

     Have you tried honey in your tea, or maybe the bears have got to the honeypot :-)

  • Tronacate

    Thanks JJ

  • http://dartht.blogspot.com/ Darth_Gerb
  • AmazingLarry

    Aaaaand there goes Green Mountain. Coffee is for closers?

    ID on /ZB. Likes to flirt between the 200 and 100 hr. /ZN making more of a move today. 

  • Joe_Jones

    Dunno if it works on VIX, but we got a bullish engulfing candle today.

    http://stockcharts.com/h-sc/ui?s=$VIX&p=D&b=5&g=0&id=p39098199956

  • amokta

    :-)

  • Joe_Jones
  • Divergence

    New name

  • Pervergence

    Darn….didn’t work

  • Joe_Jones

    reload

  • Pervergence

    Ah ha!!!!

  • Pervergence

    Try another

  • MrMargin

    Massive short interest. This thing could probably run for days.

  • Joe_Jones

    Now you just need an Elmo avatar ;-)

  • BobbyLow

    I’m still playing crude Larry and still holding a small Long Position which has gone absolutely nowhere.  The position is technically marginal at best.

    Because of the seasonality involved if I was short, I would be out.  But because it’s a long, I believe I can hold a little longer because of a natural market bias toward the long side. 

    But who knows?  Maybe there will be no Santa this year.    I have a stop of 85.14 as the BB’s get tighter and tighter and tighter. . .   :)

  • BobbyLow

    OK, I missed when you changed your name.  With over 5,000 comments who you be?    LOL  

  • AmazingLarry

    It would be nice. I’ve been in and out a few times, pecking away this past week with a $40 target. Sometimes the sun shines on a dog’s ass, what can I say?

  • Joe_Jones

    BTW, Full moon tomorrow

  • Schwerepunkt

    Meaning . . . ?

  • http://dartht.blogspot.com/ Darth_Gerb
  • Schwerepunkt

    Hahahaha . . . pervergence, kweverrrrrr!

  • Joe_Jones

    Some claim that it has an influence on the market. I’m sure Darthtrader would love to clarify that, however he has been MIA lately. 

  • http://dartht.blogspot.com/ Darth_Gerb
  • Joe_Jones

    ROTFLMAO! :D

  • Joe_Jones

    Great find!!!

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

    thanks, I think the Boss will let it slide.  (he does hate cross site links)

    if not, we will yank it!

  • Skynard

    Weekly AUDJPY, looks like a back test of the trend line. Target 89, that is where I’ll be shorting:)

  • mrmik3

    Mole what is it like living in Spain and being awake for the London session for FX??.. do you prefer the timezone switch for trading currencies?

  • Joe_Jones

    Interesting how CPCE dropped today:
    http://stockcharts.com/h-sc/ui?s=$CPCE&p=D&b=5&g=0&id=p10304551339

    Complacency?

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

    Spoos 1395, be on the lookout for fibfan supports tonight.

    http://s12.postimage.org/8k0c7d86j/temp1.png
    -Gerb

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

    Finally.
    someone listens. (sniff, sniff)

    http://evilspeculator.com/?p=32350#comment-717595558

  • Skynard

    Nice, uncle for my /ES trade is 1393.

  • Skynard

    Lol, should start kicking shortly:)

  • AMCabrera

    pegged leg betsy

  • newbfxtrader

    lol Yup but the rally needs a breather. Then we head for 89!

  • Skynard

    Contemplating going long here on /CL. Good volume with hourly NLSL just below.

  • Joe_Jones

    nice system you have here

  • AMCabrera

    the aussie is showing signs that a butt plug in the order book seems to be preventing at the moment from it going lower. It needs to move out of the way (1.0450). AUD/JPY will more than likely IMO go back to it use to look like in the order book.

  • itcomesupinwaves

    Lol..  Yeah it’s strange that EUR is weaker than AUD this morning considering the long/short interest.

  • http://evilspeculator.com molecool

    Subs – I just sent out an early briefing – please check your email.

  • captainboom

    Thanks for the Tweet giving the head’s up.  That is helpful.

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

    Horseshoes & Hand-grenades.
    http://s18.postimage.org/6y4fwpuxj/temp1.png

  • http://evilspeculator.com molecool
  • AmazingLarry

    Thanks for the heads up, Mole. Call me nuts, but I see a H&S on the spoos with rally back up to the neckline which corresponds with the 100.

  • AmazingLarry

    What the hell? I just watched that last night. LOL, it’s….just….I….don’t……:p

  • captainboom

    Is that H&S on the daily?  I don’t see it on the hourly.  Daily NLSL at 1388.75 could serve as support/short term target.

  • I Bergamot

     This just made my morning
    +1

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤  S H A K E   N ¤º°¨ 
    ¸„ø¤º° B A K E !“°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • http://evilspeculator.com molecool

    That’s right – I’m tracking your online activity. BTW, you really got to ease up on the girly pix ;-)




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