My New Best Friend

And that is why we always always and always rely in price – the ultimate denominator. Repeat after me – I will never argue with price – I will never argue with price! Quite frankly half a lifetime ago when I was a lesser trader my ego may have led me into taking out short positions yesterday. But like so many of you I had to learn certain lessons the hard way – meaning I had to pay the price for stroking my own ego and thinking that the market would ever care about my silly little charts. Strangely enough, since I adopted a position of acquiescence to the dicate of price my charts over time started to pay off.

So let’s say hello to our new best friend – Mr. Diagonal which has been serving as a perfecto jumping board for the past two weeks. To repeat yesterday’s sentiment: “Still looking supportive and as long as this diagonal holds take anything below with consideration.”

Well, there still is the matter of this. And it’s the reason I would be extremely interested in taking in short position if price would show any signs of weakness. Alas we have to wait and that may be a good thing. I would love to buy some vega with the VIX trading below the 13 mark. Hey, it was on my Christmas list after all!

Cotton update: Not sure how many of you used the ST panel to get positioned on the 11th. Since then it’s been going gangbusters and if you followed me into this abyss I would suggest you take profits now.

I hate to quote myself again (not really) but here it is from yesterday’s update: “Copper looking bearish – today’s drop through the 100-day would usually put me into a short position. But considering the weekly panel I would wait for a drop below the 25-week SMA.” And that, ladies and leeches, is why I correlate different time frames ;-)

Natgas – didn’t see this coming but my sleepy early morning entry turned gangbusters a short while after. Take profits now unless you want to hold this one all the way on the daily.

Bonds update – yesterday’s entry at the diagonal. It was speculative but sometimes it’s better to be lucky then good, right?

Some very juicy setups lurking below – please follow me into my winter lair:

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 Thursday, January 17th, 2013 at 2:20 pm. Both comments and pings are currently closed.



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

    I am a Leech.
    I am a meat popsicle.
     I will never argue with price

    http://1.bp.blogspot.com/-pXBwU54UbWg/UHFoPLw3IBI/AAAAAAAAcq8/WfNgeAovmt8/s1600/FifthElement_411Pyxurz.jpg

    I will never say never.
    I will buy low, and sell high.

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

    looking at the Monster candle today,
    boring tomorrow? with 3 day weekend looming.

  • itslance

    Unless we get a dump in the last hour.  I can’t fathom anyone wanting to hold a long position overnight.

  • Joe_Jones

    Alright since today is a sit back and observe day, I wish to share some laughs with my fellow rats:
    Two Cows…updated and enhanced:

    SOCIALISM
    You have 2 cows.
    You give one to your neighbour

    COMMUNISM
    You have 2 cows.
    The State takes both and gives you some milk

    FASCISM
    You have 2 cows.
    The State takes both and sells you some milk

    NAZISM
    You have 2 cows.
    The State takes both and shoots you

    BUREAUCRATISM
    You have 2 cows.
    The State takes both, shoots one, milks the other, and then
    throws the milk away

    TRADITIONAL CAPITALISM
    You have two cows.
    You sell one and buy a bull.
    Your herd multiplies, and the economy
    grows. You sell them and retire on the income

    ROYAL BANK OF SCOTLAND (VENTURE) CAPITALISM
    You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States , leaving you with nine cows. No balance sheet provided with the release. The public then buys your bull.

    SURREALISM
    You have two giraffes.
    The government requires you to take harmonica lessons.

    AN AMERICAN CORPORATION
    You have two cows.
    You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyse why the cow has dropped dead.

    A GREEK CORPORATION
    You have two cows. You borrow lots of euros to build barns, milking sheds, hay stores, feed sheds, dairies, cold stores, abattoir, cheese unit and packing sheds. You still only have two cows.

    A FRENCH CORPORATION
    You have two cows.
    You go on strike, organise a riot, and block the roads, because you want three cows.

    A JAPANESE CORPORATION
    You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called a Cowkimona and market it worldwide.

    AN ITALIAN CORPORATION
    You have two cows, but you don’t know where they are. You decide to have lunch.

    A SWISS CORPORATION
    You have 5000 cows. None of them belong to you.
    You charge the owners for storing them.

    A CHINESE CORPORATION
    You have two cows.
    You have 300 people milking them.
    You claim that you have full employment, and high bovine productivity.
    You arrest the newsman who reported the real situation.

    AN INDIAN CORPORATION
    You have two cows.
    You worship them.

    A BRITISH CORPORATION
    You have two cows.
    Both are mad.

    AN IRAQI CORPORATION
    Everyone thinks you have lots of cows.
    You tell them that you have none.
    No-one believes you, so they bomb the ** out of you and invade your country.
    You still have no cows, but at least you are now a Democracy.

    AN AUSTRALIAN CORPORATION
    You have two cows.
    Business seems pretty good.
    You close the office and go for a few beers to celebrate.

    A NEW ZEALAND CORPORATION
    You have two cows. The one on the left looks very attractive… ;-)

  • Skynard

    Time to sell the greed me thinks, UNREAL!

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

    AN IRANIAN CORPORATION
    You have plenty of Cows
    You want to develop chocolate milk
    Other countries don’t want you to have chocolate Milk.
    The state department says you will have chocolate milk in 6 months.
    End result, radioactive dead cows.

  • Darkthirty

    already in

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

    I wish I could find the MOle post talking about when there are no more sellers and a vacuum develops.
    it was years ago.

  • http://evilspeculator.com molecool

    You got National Socialism wrong. Let me correct it:

    You have 2 cows.The State takes both and interrogates you about how you knew the cows and who sold them to you.

  • http://dartht.blogspot.com/ Darth_Gerb
  • dma0

    A CANADIAN CORPORATION
    You have two cows. When trying to milk them they confess to you they mortgaged themselves to the horns to invest in condominiums. Now all the milk has to go to the Bank.
    It is cold.

  • Curiousmind3861

    I guess AUDJPY played out like the chart you posted few days ago, made higher high after the dip, is it finally time to plunge like history repeats itself?? Look at USDJPY 90+ today, unreal, I think it had to do with me opening my mouth last night about Yen strength…

  • Joe_Jones

    :)

  • Joe_Jones

    :D and then shoot you…

  • Skynard

    Hehe, had to cover till now and put /ES back to work.

  • Joe_Jones

    Wow, check out VIX

  • Skynard

    Hehe! Wait till next week:)

  • bdoone

    VXO +2.55%

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

    $Vix, A/D, tick … all soooo boring.
    Check out SCTY.
    Nothing boring about Ilon Musk

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

    AUD/JPY
    these parabolic moves don’t go down easy, I was saying Thursday this could go on a few days.
    the reality that 92.33 wasn’t touched twice, was clue.  
    ah ha!
    http://s9.postimage.org/kslk27t8d/keep_swinging.png

    so Gerb, is it going to reverse?  
    dunno, all I can say is I didn’t fight it at 89 or 90 or 91 or 92.
    ok,  goofed at 90, but corrected toot suite.

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

    I’d like to say yes.  it’s the little bear in me.  I mean, LOOK AT MARCH 2012!
    but cold water reality, look at 2011 – April through July.it slowly zigzag’d downward over months.

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

    *Market Closed*

  • Darkthirty

    ahem

  • BobbyLow

    Hey DG,

    I’m a relatively new student of Forex but one of the reasons that I’ve been so quiet over the past 4 or 5 Days is that I’ve been busy re-grinding numbers and doing serious back testing yet again.

    This latest action in the Yen has really made me look at Charting Pairs in a whole new light.  

    If you just want to scalp a few Pips then what I found does not apply.  But seriously though, it is probably no big secret that when a Base Currency goes on a run, tools like MACD, RSI and Bollinger Bands among others  go out the window.  

    The bottom line for me is rather than call a Top or a Bottom, I would rather stair step the directional moves until there is what appears to be change in direction based on a one or two simple guidelines.  This can also mean losing on the last couple of trades in the Parabolic direction.  The guide line that could be used is whatever makes the most amount of sense for each individual.

    Also during these types of price actions, I believe that any news that attempts to explain what is happening is more irrelevant than ever. 

    JMNSHO      :)

     

  • Darkthirty

    are front month es options dead  @0815 or EOD?

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

    Cyclical-to-Trend is my greatest challenge.  I don’t know if there is an indicator for that.

  • BobbyLow

    Probably not.

    In any event, I’ve always had difficulty trading at what appears to be resistance and support points – Not because it’s wrong but because it just does not fit my personality.  

    I’m much happier trading Mo Mo even when I miss the first chunk of the move.  Soooooo, I guess it’s different strokes for different folks and all that rot.  :)

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

    Yes, different strokes.

    I’ve become better at the lines.
    I ask where are the stops at?, and then put my buy under it.

  • itslance

    Just a friendly reminder, please don’t forget to post those two scripts. :)

  • Skynard

     Here you go, net lines:

    input method = {default CloseToClose, OpenToClose};
    input price = ohlc4;
    def upClose = if method == method.CloseToClose then price > price[1] else price > open;
    def downClose =  if method == method.CloseToClose then price < price[1] else price < open;
    input timeOut = 5;

    def netSellLine = if sum(upClose,3)[1] == 3 then low[3] else double.nan;
    rec nslCounter = if !isNan(netSellLine) then 1 else nslCounter[1]+1;
    rec netSellLineHistory = if (nslCounter==1 and !isNan(netSellLine[1])) then max(netSellLine, netSellLine[1]) else if nslCounter==1 then netSellLine else if nslCounter netSellLineHistory) then 0 else if low < netSellLineHistory then 1 else nslViolation[1];

    def netBuyLine = if sum(downClose,3)[1] == 3 then high[3] else double.nan;
    rec nblCounter = if !isNan(netBuyLine) then 1 else nblCounter[1]+1;
    rec netBuyLineHistory = if (nblCounter==1 and !isNan(netBuyLine[1])) then min(netBuyLine, netBuyLine[1]) else if nblCounter==1 then netBuyLine else if nblCounter<=timeOut then netBuyLineHistory[1] else double.nan;
    rec nblViolation = if (nblCounter==1 and high netBuyLineHistory then 1 else nblViolation[1];

    plot NSL = netSellLineHistory;
    NSL.setPaintingStrategy(paintingStrategy.HORIZONTAL);
    NSL.setDefaultColor(color.pink);
    NSL.setLineWeight(2);

    plot NBL = netBuyLineHistory;
    NBL.setPaintingStrategy(paintingStrategy.HORIZONTAL);
    NBL.setDefaultColor(color.lime);
    NBL.setLineWeight(2);

    plot nblBuy = if nblViolation==1 and nblViolation[1]==0 then NBL else double.nan;
    nblBuy.setPaintingStrategy(paintingStrategy.ARROW_UP);
    nblBuy.setDefaultColor(color.white);
    nblBuy.setLineWeight(3);

    plot nblSell = if nslViolation==1 and nslViolation[1]==0 then NSL else double.nan;
    nblSell.setPaintingStrategy(paintingStrategy.ARROW_DOWN);
    nblSell.setDefaultColor(color.white);
    nblSell.setLineWeight(3);

  • Skynard

    NR7:

    def range = high – low;
    def na=double.nan;
    def plotter=high+range*0.3;
    def isnr7 = (range <= range[1] and range <= range[2] and range <= range[3] and range <= range[4] and range <= range[5] and range <= range[6]);
    plot nr7 = if isnr7 then plotter else na;
    nr7.SetDefaultColor(Color.yellow);
    nr7.setstyle(curve.points);
    nr7.setlineWeight(3);

  • mrmik3

    .. Mole has a pretty nice setup going on for currencies… dual time frames with dual bollingers on both works  great for me and my setup is different than his of course but very similar… RSI or CCI are great to spot divergences and i would never throw them out the window.. one thing i have learned from the mole man is patience and not guessing or thinking where i think the tape will go and just sit and watch the tape!!.. the Daily and an hourly paired works great as for timeframes, as does the 4hr and 15 min.. the latter which really tends to show trend… anyway thats my 2 pennies!

  • Skynard

    ID:

     plot Data = close;
    def range = high – low;
    def na=double.nan;
    def plotter=high+range*0.5;
    def ID = (high = low[1]);
    plot InsDay = if ID then plotter else na;
    InsDay.SetDefaultColor(Color.PLUM);
    InsDay.setstyle(curve.points);
    InsDay.setlineWeight(4);

  • itslance

    Awesome!  Thank you so much! :)

  • AmazingLarry

    Someone care to edumacate a n00b on how to enter those scripts into TOS?

  • BobbyLow

    I hear ya especially on the patience part.  Basically I was talking more about a parabolic moves when the Bands keep expanding and or price moves outside of both sets of bands and just keeps on doing so.  One example is the EUR/JPY that went parabolic and made a new high on Monday, then it sold off 300 Pips only to make a brand new high today.  This thing might do this a couple more times before it goes on a long extended move to the downside.  This is the nature of the beast and if you go back far enough you can see this type of price action over and over again.  

    BTW, I’ve also incorporated the 4 Hour into my tool box. 

  • mrmik3

    i would say that pair is trending my friend and that 300 pip sell off is the pair positioning itself to go higher!!… dont call tops or bottoms!! hope this helps some.. maybe someone who is a little more experienced can chime in?… but if you are not seeing an edge then step back, analyze, and find an edge!! or something that you see that makes you feel comfortable in your trade!!

  • BobbyLow

    “i would say that pair is trending my friend and that 300 pip sell off is the pair positioning itself to go higher!!… dont call tops or bottoms!! ”

    No shit.  :)

    Mr. Milk, Perhaps I didn’t make myself clear enough in my original post but here is what I said. . .

    The bottom line for me is rather than call a Top or a Bottom, I would rather stair step the directional moves until there is what appears to be change in direction based on a one or two simple guidelines.  This can also mean losing on the last couple of trades in the Parabolic direction.  The guide line that could be used is whatever makes the most amount of sense for each individual.

  • mrmik3

    my ex-girlfriend use to call me milky!! :P
    .. Bobby you say ” I would rather stair step the directional moves until there is what appears to be change in direction based “.. that sounds a lot like calling tops and bottoms?.. sorry if i’m misunderstanding ya?… like you said I guess different strokes!

  • http://twitter.com/NobodyTrader Nobody Trader

    Sat on hands most of week, op-ex nonsense. Figured today would be up with big POMO buys and S & P 1474 easily attainable. With op-ex Friday and the possibility of a resistance at those new highs, got binary lottery ticket TZA call going out tomorrow, then if we do sell off but technically still look good may get long a couple of tight call spreads (longs). That’s all I can figure.

  • Skynard

    Studies>Edit studies>New (Bottom left corner)

    Name your study and copy/paste

    Then Add study

    You can create several sets as well

     

  • http://dartht.blogspot.com/ Darth_Gerb
  • http://www.facebook.com/STOCKTRADER74 Ralph Scotti

    Went long  nzd/usa at .84011. Nothing like getting stopped out at .83750 with a wicked down candle..

  • newbfxtrader

    http://www.forexfactory.com/calendar.php

    CPI came in neg. You gotta watch these data  for such spikes.

  • newbfxtrader

    China GDP at 9pm.

  • http://www.facebook.com/STOCKTRADER74 Ralph Scotti

     Thank for the info.

  • Y KW

    A setup on the 3 hr view gave a clear picture of the potential for a ‘wicked’ candle big time.

  • Skynard

    Not trying to call a top at all here. Trying to point out something of interest. /NKD looks a perfect subject, notice the very large price movements. This is one of the things to watch for and would be cautious of longs right now. If price reverses hard then would consider it a top. JMHO

  • newbfxtrader

    Good to see more FX players around. FYI I would not be long commodity currencies at these levels. Too risky.

  • newbfxtrader

    When markets are sky high like nowtake something weak that didnt play in the rally hint GBP. Take something oversold like jpy or usd. Try short GBP/USD or short GBP/JPY. Thats probably your least risky trade.

  • newbfxtrader

    Nice volume on /6J. Could be. But need some green candles first. Still got divergence but price is still king and thats still down.

  • Skynard

    That’s gana be a biggie:)

  • AmazingLarry

    Holy crap, it worked. Awesome man, thanks! 

  • Skynard

    Those are a must have, been trying to get price coded but have not had much luck.

  • newbfxtrader

    Yeah. But I dont know why. The Chinese can tell you the GDP years ahead. And they fudge the numbers to get it right anyways. Then the markets feigns surprise!

  • Skynard

    Put a long position on just in case, worst thing is getting stopped out.

  • Skynard

    Mega, Mega div now!

  • BobbyLow

    Ok.  I see where the misunderstanding is.  

    Using the EUR/JPY as an example it has had about a 1600 Pip ride up since 11/15.  It made another new high on Monday at 120.12.  If you were long during this time period, I doubt you would use 350 Pip stops.  Therefore, if you still believed in the uptrend during or after getting stopped out during the apx 350 PIP drop over Tuesday and Wednesday you might get back in long and take the next step up.  

    That is what I meant about stair stepping. 

  • Joe_Jones

    yummy!

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

    oh please, yer KILLING ME.
    ;-D

  • mrmik3

    I get you bobby! This is great cuz this is exactly what i learned from mole.. if you pull up a the Daily look how price expanded beyond both the 100 BB and the 20 BB like you said earlier.. then the 350 pip sell off bounces off the upper 100 band on tuesdays low… this is why i said i like moles set up of dual time frames dual BBs of 100 and 25.. it literally has shown me things i never even was close to seeing before.. the setup shows you the trend and where potential turn around points are or continuation patterns.. hope some of this helps and like i said i wish someone more experienced would chime in!?.. maybe you need to sit with a pair for a couple days untill you know where its been to get a better idea of where its going!

  • Skynard

    Path of least resistance, ya know. Like water:)

  • newbfxtrader

    @sky been back short lumber. I think we could see some serious downside.

  • Skynard

    Yep, keeping a eye. Could break here at gap but if it bounces off lower BB will have a sell order waiting at the 100.

  • Th3_Acist

    Really interested to see if GBP/USD is gonna hold that weekly NLSL break.

  • Skynard

    Nice move in AUD:)

  • Curiousmind3861

    The weakness in CHF is quite unbelievable. I made the mistake of switching from long USDCHF to short EURUSD. Look at today, EURUSD up, and so is USDCHF.EURCHF 500 pips in 1 week…

  • Y KW

    Text book in fact

  • Y KW

     Rule 101 … always buy the stronger and/or sell the weaker … age old truism!

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

    cool….I found it on Amazon. ;-)

    http://s1.postimage.org/iwyhicstr/audbook.png

  • Y KW

     Nothing like boredom or a misspent youth … nice … my real book is also on Amazon.

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

    I dont know what you are trying to do here. Eur/usd looks like a inverse head and shoulders trying to break up. Only short if that fails. Yen pairs have built up quite a divergence. If you are shorting you could take a bite there. The weakest of the risk on is actually GBP. Definitely you could short that.

  • Skynard

    Hehe, /SB on the move finally:)

  • BobbyLow

    TOS has them available.  

    I looked into them a while back and found that for the most part the Spread between the Bid and Ask was massive.  Then on top of that, they are still subject to the Greeks and Overnight Risk.  

    IMO, the E-Mini’s are a much safer trade then trading Options on them.  

  • Skynard

    Hehe, go Bucky GO!

  • Schwerepunkt

    Is it a turn or just a twitch? If the former, then it IS time to short equities. The latter, not so much . . . 

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

    a little twitch 79.9 bump to 80.1, back to 80 now. (/DX)

    you know him….Mr. 5 Millisecond. ;-)

  • Skynard

    Lol, would say if 80 holds sell the farm:)

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

    GBP/USD right around the 200 daily.
    any significance in that?
    (it held back in Nov, and gave a fight back in May)

  • Skynard

    Not expecting a very large correction here (SPX 1380-90), with earnings more importantly AAPL on the 23rd would expect the rally to continue through May (SPX 1600). That will be the time to back the truck:)

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤ø„¸F R E S H „ø¤º°¨ 
    ¸„ø¤º°¨ M E A T“°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • itslance

    I stick with 100 and 25 sma to go with the BBs

  • Curiousmind3861

    Thanks for the heads up. I am already short GBP which is looking good this morning. EUR has turned around and now it is looking better. SOLD some USDCAD longs this morning too.




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