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One Good Trend
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One Good Trend

by The MoleFebruary 16, 2017

Frankly this relentless rally is getting ridiculous. But who are we to complain? We didn’t just happen to nail what I would deem a picture perfect entry but thus far have managed to ride this advance like Jess Lockwood on steroids. Yeeeehaaaaa!!! These are the types of campaigns dreams (and fortunes) are made of and I hope you were wise enough to hop on the bull two weeks ago when I posted this entry.

 2017-02-16_spoos_update

If that happens to be you then pad yourself on the shoulder and perhaps devote a special toast to your favorite market megalomaniac, which of course ought to be yours truly. While overpaid fat cat hedge fund managers are cowering below their desks after being unable to recognize what was nothing but a good old fashioned trend trading opportunity, we here at Evil Speculator do what we always do: Focus on our charts and bank coin by the book.

Ed-Seykota

And talking about which. This is a snapshot of Ed Seykota, commodity trend trader extraordinaire, with his lovely daughter. He must have had quite a lot of time to prick his banjo as trend trading has been almost dead for the past few years, mostly due volatility producing too much standard deviation during the early entry phases of campaigns. However I remember having a conversation with Scott a few months ago during which we agreed that conditions in the coming year may just favor a return of the mean old trend trading dogs. Thus far it’s starting to look promising!

2017-02-16_gold

Gold of course is bound to be launching higher now that it managed to stop me out by a single tick yesterday. I’ve added my pertinent sentiments to the chart.

2017-02-16_corn

Fortunately I was a bit luckier on corn – missed that stop run by merely two ticks.

2017-02-16_USDJPY

USD/JPY also still survives and there’s currently nothing to be done but wait.

I leave with this:

The Whipsaw Song

You get a whip and I get a saw, honey
You get a whip and I get a saw, babe
You get a whip and I get a saw
One good trend pays for ’em all.
Honey, trader, ba-by mine.

Banjo (Ride Your Winners):
What do we do when we catch a trend, honey … etc.
We ride that trend right to the end.

Mandolin (Cut Your Losses):
What do we do when we show a loss, honey … etc.
We give that dag-gone loss a toss.

Fiddle (Manage Your Risk):
How do we know when our risk is right, honey … etc.
We make a lot of money and we sleep at night.

Guitar (Use Stops):
What do we do when the price breaks through, honey … etc.
Our stops are in so there?s nothing to do.

Bass (Stick to the System):
What do we do when a draw down comes, honey
What do we do when it gets real big, babe
What do we do when it’s even bigger …
We stick to the plan and pull the trigger.

Banjo (File the News):
What do we do with a hot news flash, honey … etc.
We stash that flash right in the trash.


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.
  • Mark Shinnick

    Looks like whatever backwardation was in vol instruments is getting made up. Still long tvix.

  • Tomcat

    Covered Copper, holding a small short in Gold.

  • Mark Shinnick

    Ok, standing aside the vol for the time being…see what happens…but I think we are on some kind of notice.

  • ridingwaves

    jumped back into AVXL 1/2 R

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

    for those math nerds – What is 10 sigma?
    http://www.aleph.se/andart/archives/2009/09/ten_sigma_numerics_and_finance.html

    “Whenever a model predicts that something will fail with a negligible chance, the probability that the model can fail becomes important. Quite often that probability overshadows the predicted risk by many orders of magnitude. Making models robust is much more important than most people expect. ”

    hint: ten sigmas occur with probability 1.5265*10^-23
    or 1-in-152650000000000000000000

  • ridingwaves

    opex shenanigans…CL is acting like widowmaker’s long lost cousin

  • Mark Shinnick

    The preponderance remains that equities have yet to reach a measuring objective for this move.

  • Mark Shinnick

    …..with predators lurking around every corner.

  • ridingwaves

    lots of fake outs today and its early

  • Tomcat

    will try to catch a falling knife here, wish me luck

  • Mark Shinnick

    Returned to long tvix.

  • StockTalker

    Rut Roe

  • ridingwaves

    FED speaker blues, March is live meeting per Lockhart for rate hike discussion…

    my question, what the heck were the other meetings, why have them if not live

    chumps

  • Tomcat

    Whoever prescribes to Elliot waves, 2350 was the target (two years ago). Congrats!!!

  • Mark Shinnick

    Ok, objective mostly met, standing aside vols for time being.

  • Yoda

    LOL, good one. Let us have a guess game as to where the tape will be 2 years from now.
    I start: SPX 1500
    😉

  • Tomcat

    Mole, any specific reason why the “trend” emails have stopped?

  • Tomcat

    I am sensing a bit of sarcasm…no???

  • StockTalker

    SPX 1800 2 months

  • http://evilspeculator.com Sir Mole III

    Let me look into that…

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

    {faceplam}

  • Yoda

    NG’s gap is almost closed

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

    Just a tad bit 😉

  • Yoda

    Please. It still has some use.

  • Tomcat

    Should have quantified it. I meant one knife not 5.

  • Yoda

    Had to look up “plam”:
    http://www.urbandictionary.com/define.php?term=Plam

    That’s one twisted mind you have. 😉

  • Tomcat

    Is today the day that we will get the 1% drop???

  • Ronebadger

    That won’t happen anymore…as we’ve seen

  • AcoBrasil

    Well played Mark.

  • Yoda

    just got myself some UNG

  • Yoda

    Didn’t you get the memo that markets only go up? 😉

  • Mark Shinnick

    Yeah…closest thing to a gunfight most of us can still live with.

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

    no. Gartman needs to open his mouth again.
    😉

  • Mark Shinnick

    Short miners. Tight stop.

  • Mark Shinnick

    Yeah, slope shallowing…and can stay in range a long time ;/

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

    ..energy bears are baaaack.

  • Mark Shinnick

    Standing aside.

  • Mark Shinnick

    Long tvix

  • Yoda

    Good. Just when I went long NG

  • Mark Shinnick

    …always keep this business in mind..

    https://youtu.be/whlzFWwVv98

  • http://greenlander1.blogspot.com/ Greenlander

    thinking ahead RW, if we do get that equities pullback, I am hoping for a shallow angle pullback in XBI to go long for that potential monster move up. this whole thing has the look of a rounded bottom https://uploads.disquscdn.com/images/ee6f35f705ecf12554ed4594bcc88a56de0b2b47f519c4b6f8c345a87eabcbd2.png

  • Mark Shinnick

    …standing aside for time being.

  • AcoBrasil

    Wise move giving it some breathing space. I bought BZQ at 12.35 this morning. EWZ was overbought on both the daily and weekly charts, and the USD/BRL fall had moved too quickly. The Bovespa fundamentals are strong, but the index is overripe for a correction.

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

    what can I say? ‘it’ a gift’.

    let’s see if Permalink works:
    http://stockcharts.com/h-sc/ui?s=ERY&p=D&yr=0&mn=3&dy=0&id=p94237518359

  • saltwaterdog

    Maybe I’m the last to know this, but I just had lunch with a guy in Chicago who told me that the algo shops are buying market data from the exchanges that is fed nearly real-time, and contains order information as well as clearing broker, and he was pretty sure acct # was part of the metadata. The point being those willing to pay for this are then compiling the trading patterns of systematic approaches and able to define the path of greatest pain for the most participants with precision.

    If true, in whole or part, it is hard to believe it is legal. Then again, DMV clerks tasked with policing these things have a tough job competing with the brainpower of those paid to create and profit from them.

  • Mark Shinnick

    Well, this vol thing thing still is on a short term precipice so watch out.

  • AcoBrasil

    What vol thing?

  • BobbyLow

    LMAO!

  • Mark Shinnick

    Times like this I’m into the 2x vol instruments like uvxy and tvix.

  • BobbyLow

    Money can buy almost anything. And “It’s a big club and you ain’t in it.”

    https://www.youtube.com/watch?v=i5dBZDSSky0

  • Mark Shinnick

    Yes, their private data feeds are right there at the exchanges.

  • Mark Shinnick

    Flipping over to long bias miners.

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

    Muwahaha.

  • Tomcat

    I keep playing that video every quarter. Its a good reminder.

  • Mark Shinnick

    This guy lived about 40ft away from me until the world lost him; quite a private person, a national teasure to be sure.

  • evilasevildoes

    hilarious find the video mole

  • evilasevildoes

    thems is us

  • evilasevildoes

    my point and figure called it think i posted hedre try using your retracement extension fibs they will tell ya too on big picture

  • Edd

    I have been aware of this issue for sometime. I believe in the long term it will be a significant reason why retail trading will fade away. For now I view myself as an ant in a jungle over run with elephants. Somehow someway the ants continue to thrive and prosper, and so can we in trading. It is somewhat counterintuitive; the actions of the HFT algos literally leave signs of their own foot prints. I watch every tick all day everyday. It can be like staring into the Matrix. They are not superhuman My biggest obstacle to profits is still me.

  • saltwaterdog

    I get co-location and the disappearing latency arb when it comes to price, but the rub here is that the specifics of your order are not only not protected, but shared for a price with those who wake up every day to be sure you don’t succeed.

  • Mark Shinnick

    Yeah…something’s brewing with gold against a secular downtrend…and except for some indicators I’m still clueless as usual.

    https://uploads.disquscdn.com/images/1c80fb2a2bc808b384e64ad9d65c7140fd59912f9cbe409771f1bd7366362a95.jpg

  • saltwaterdog

    it makes me think that the attraction of systematic approaches, namely the repeatable process, can actually work against you due to the predictability. At least a discretionary approach moves among many markets and may have a tailored stop loss to the particular nuances of the campaign. Fact is that if I had $100mm to trade a Crude Oil system that backtested flawlessly it has next to no shot of succeeding in reality if the system can be modeled and therefore predicted

  • Mark Shinnick

    Yes, many USA systems are like that, such as the legal system. I guess there is a reason many democracys’ lifespan is not much more than 200 years or so.

  • Yoda

    NG gap closed

  • Edd

    Agreed, but 100mm means you are the market in essence. You could not and would not even dream of flip trading like my system is designed for. The market I`m in has traded 40mm shares today. I will round trip 32,000 shares today and most of that will be filled instantly within 2-3 cents of bid at worst. I`m a small retail rat and I cannot realistically increase my size in this market at my preferred small timeframe which is fine by me for now. My trade size is like a drop of pee in a swimming pool. No one even knows I`m here. They cannot focus just on my info but on everyones at once. This in turns causes patterns to develop that we can still exploit at the size we are.

  • http://evilspeculator.com Sir Mole III
  • saltwaterdog

    $100mm way too big of a #, you are right, $5mm even and I think you’d have a target on your back

  • Edd

    Ha!! 5mm on NUGT today would have been an order for 390,000 shares. I can just imagine the time of execution and price that all that would fill at on the 10min timeframe. Large target indeed.

  • http://greenlander1.blogspot.com/ Greenlander

    Partially for that reason, I think there are some traders who trade a range of individual equities and switch from sector to sector frequently to avoid leaving footprints. Would be much harder to capitalize on it.

  • http://greenlander1.blogspot.com/ Greenlander

    Yeh 5MM of NUGT. I could imagine that fills would be crap. Not that I have tried it or even could imagine trying!

  • BobbyLow

    I’m not too sure about this SWD. Take a look at a Daily Chart of Crude over the past 10 to 15 years and you should find the same repeatable patterns that began before HFT and have continued after HFT. You’ll see extended periods of monotonous price drifting to nowhere, followed by an extended trend to the upside or downside followed by extended periods of monotonous price drifting to nowhere, followed by an extended trend to the upside or downside.

    Where most of us fail is not being patient enough to either keep trying while in a state of monotonous painful trading and or not having the patience to stick with an extended trend after they begin.

  • saltwaterdog

    I’m speaking of futures, and of an account value, not a trade value…. so assuming 1% value for R you end up trading $50k / campaign

  • Edd

    Understood. In trading NUGT and DUST on a 10min timeframe I have found that on average at 75K you are reaching the upper limit of placing a market order that will be filled at the bid and almost instantly. Trading the RUT is close. Vehicles with less volume become impossible to use for me. 1 R is my max loss allowed, however it simply never happens. My exit signals have proven to close a trade before 1 r is ever hit. Last year .02% of trades exceeded a 1r drawdown. After market close I always update the average drawdown on each trade as a % R so I can monitor this.

  • http://evilspeculator.com Sir Mole III