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Only The Paranoid Survive
98

Only The Paranoid Survive

by The MoleNovember 8, 2011

Which is of course the famous quote (and book title) by Andy Grove, the founder of INTC. Well, if you are a sub you probably recall last night’s warning I posted after the inside candle mini break out:

UPDATE @ the closing bell: Those fuckers – okay, now the game is a bit more difficult as they may shake out folks taking the prior single inside day signal.

So it’s fine to go long here – but only play it in the spoos – do not buy SPY or DIA, or IWM here and sit on them overnight. Those cats may turn a fast one on us and you want to be able to hedge yourself overnight as soon as today’s highs are being taken out again during AH monkey business tape.

Also do not use 1240 as your stop – stay nearby. I don’t like the timing of this breach and we need to err on the cautious side. Okay, you have 10 more minutes to play the spoos – have fun.

And of course the night shift dropped the spoos after hours to 1249 only to ramp them up a few hours later to produce a five handle gap at the NYSE open. After a spike higher (which the Zero Lite didn’t believe for a second) it’s been downhill from there and the result of all that mayhem is what I would call the retail trader woodchipper from hell. Now, I’m elated that I issued this warning and I hope that you guys hedged any long positions you may have taken on at yesterday’s close. But even if you did – unless you are vampire and don’t sleep at night you probably missed the late night ramp up following into the open. If you did nothing you woke up to some nice profits and hopefully closed them out as soon as the Zero was going flat at the ramp higher.

All this goes to show that we always need to be paranoid about falling for obvious market maker bait aimed at reeling us into overnight traps, stop runs, and early morning gap squeezes. All of them result in overtrading and most likely in losses and psychological damage over time. The former can be remedied with proper position sizing, discipline, a trading system with a proven edge – the latter may lead you into short sighted (and emotional) trading decisions you will regret in the long term.

In summary: The way to play an inside candle breach should preferably be during trading hours – unless of course you live in Asia and AH tape on the spoos happens while you’re awake. Or if you are a vampire or werewolf – which from a trading psychology perspective may very well work in your favor.

However, running like a hare left the spoos with new technical information that we may benefit from. When I took this snapshot half an hour ago the spoos were pushing toward a cluster of NLSLs and I was about to point them out to you. However, since then there was another one of those surprise! ramps higher (I think the timing was similar as yesterday’s) and we now find ourselves near two hourly NLBLs around the 1268 mark. I think we have a decent chance of pushing above those but frankly I’m not sure if I want to take this if it happens near the end of the session – those bitches have been having way too much fun lately.

What’s a lot more interesting in my mind is the AUD/JPY as that’s where the real action is. I also have two more FX setups for my intrepid subs. Please step into my badly ventilated lair:
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Charts and 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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Again, quite a bit of movement in the past 30 minutes and I had to take a second snapshot. After testing support the hourly is now pushing into a cluster of buy net-lines around 80.6. A push higher from here is possible but there’s also that 100-hour SMA which yet needs to be cleared.

Those Euro traders have been very busy bees as well – similar setup and we have a wonderful net-lines box between 107.15 and 107.54 on the hourly. The daily NLSL at 106.87 was refused – funny how those net-lines pay off over and over again 😉

Also had to take a second snapshot of the EURCHF. You recall our long entry and the ramp higher. Since then there has been a shake out attempt and it came all the way down to where I would expected temporary support in the form of the lower 25-hour BB line to kick in and hold the barbarians storming the gate.

We now have an hourly NLSL at 1.2366 and a breach of that would be defcon 3 – a push lower into and below 1.2342 (i.e. that very lower BB line) is where things get very uncomfortable and I would probably take my money and run. Of course a push above 1.2396 (i.e. the 25-hour SMA) followed by a push above the upper daily BB line (i.e. 1.247) would most likely be good for a trip all the way into 1.2823.

In other words – the current hourly NLSL is a good reload opportunity with a stop just a few pips away.

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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.
  • Anonymous
  • http://evilspeculator.com molecool

    BTW, those EUR/USD signals on the ZeroFX are pretty awesome if I may say so…. :-)

  • Anonymous

    mole never looked at the zerofx….i would guess they are signalling weakness in usd?

  • http://evilspeculator.com molecool

    If you’re a Zero sub then head over and take a peek!

  • Anonymous

    ok

  • Anonymous

    Mole I look at it as euro spiked now ready 2 roll over?   Really never worked w currencies

  • Anonymous
  • Anonymous

    lol
    129.44 next

  • Anonymous

    new all time highs baked now?

  • Anonymous

    Mole I think I spotted that positive divergence earlier in the day and commented on it….can you reveiw and see if I was correct? Lower right panel….thanks

  • Anonymous

    My new best friend Copper says the buying is all done here, move along…. (at least for now).  I’m all flat and moving along as well.  Fun day for zero lovers.  Made a few shekels short in the am and now twice long and I think we’re right about where the market opened this morning.  Yeah – buy and hold is the way to go!

  • Fibz

    I figure may as well maintain a bullish sentiment as long as “officials” are talking about crisis, etc.

  • http://evilspeculator.com molecool

    Isn’t that what we mused about yesterday? 😉

  • Anonymous

    Mole – possibly dumb question but:  I’m sitting here looking at 5 min mole (at 2:50pm eastern) below the zero line while zero lite is above and pointing upwards.  I have noticed that once in a while.  Other than “inconclusive” is there anything I should see in that?

  • http://evilspeculator.com molecool

    Happens every so often – sometimes it’s a harbinger of a quick shake out looming ahead.

  • Anonymous

    We are basically exactly at the 200 Day SMA and the 50 Week MA which are both at 1271/1271.  I remarked on this a few days ago.  I’d like to see us clear this area before Santa can take his costume out from the wardrobe.

  • Anonymous

    lol
    sure looks like he wants to put it on and model it for everyone

  • Anonymous
  • Anonymous

    Lets see if they try to push it towards 1280 into close, or try a pullback, with resumption of rally tomorrow or after hours.
    Santä Klauss is coming to DOW-n

  • Anonymous

    I know most of you are keen on hearing what Steve Hochberg has to say these days (lol!)
    http://marketwrapwithmoe.com/
    –let me summarise…WaveP2 ending, about to drop into P3…
    A good test that you are not biased is to listen to him, and NOT be influenced by what he says :-)

  • Anonymous

    good for another 200 points up in spx then…nice lol

  • Anonymous

    Copper actually looking pretty strong here heading towards the close.  Perhaps we may get a green push after all.  Small position for s**ts and giggles.

  • Anonymous

    Apparently ewi-prechter is the most widelely susbcribed newsletter – thats a joke (wth!!!)

  • http://evilspeculator.com molecool

    Really? Who’s tracking those subscription numbers? And is anyone really reporting them properly?

  • Anonymous

    well anyhow. that was cool. 

  • tradingmom

    Mole — on the SPX hourly, can you please extend the red line?

  • Anonymous

    Sadly i was long a bit too early with UPRO, got stopped out, then went long dow-chem (feel safer with that, as can hold as stock, bu less explosive up-move)
    NOw if only Mole gave me a free zero, i may have been able to time entries better

  • Anonymous

    AUD/JPY is not at its hourly 100 SMA. If it can be broken, this might be a good opportunity to buy, but I wouldn’t bet on an immediate break since there’s an RSI divergence forming on the 15m and the move looks kind of exhausted for the moment.
    EUR/CHF is lacking upside enthusiasm, it seems. In addition this looks like a rejection at the upper daily Bollinger, so  I’d think that a new low on the hourly might be more likely right here.
    Soybeans BTW look interesting on the daily and weekly chart. The move looks corrective and thus like a possible retest of the October low with the possibility of a long entry in case that holds.

  • http://evilspeculator.com molecool

    You asking for a freebie again and I WILL ban you – grrrr….

  • Anonymous

    Good point, but they keep pushing those ‘salesman’ lines :-)

  • http://evilspeculator.com molecool

    What really gets me is that this guy continues to be invited to radio and TV shows while he continues to be wrong. Nobody calls me for an interview for some reason – what gives? Oh right – I may give listeners/viewers something that may provide a real edge…. sheeeshh…

  • Tronacate

    freebies……..jesus…….less than a tank of gas…..c’mon

  • Tronacate

    Looks like a divergence building on the 5 min ZL…..

  • Tronacate

    Nevermind…….lol

  • Anonymous

    mole dont you dare go to interviews..AuTOmatic shot in arm before show and makes you brain dead Ive seen it.

  • Anonymous

    Only joking – dont expect anything for free :-)
    Just highlighting its utility for daytrading

  • Anonymous

    Tron where do u see that?

  • http://evilspeculator.com molecool

    Seriously….

  • http://evilspeculator.com molecool

    I put up a channel instead.

  • Anonymous

    Cramer’s still on the TV too and his track record must be abysmal. Has anybody ever backtested a system based on fading his recommendations? I’d love to see those numbers.

  • http://evilspeculator.com molecool

    FWIW – I do NOT like this tape – at all. No juice in the climb up here and I ‘m not convinced the bears are done yet.

  • Anonymous

    r u serious?

  • Anonymous

    That’s a biggie! 

  • http://evilspeculator.com molecool

    LOL – they should push their track record instead…

  • http://evilspeculator.com molecool

    I do not like this tape – no – Zero is not supporting this ramp right now. Signal is pretty flat and I would be more confident if we saw something more significant. Maybe we’ll get something more significant on a breach.

  • http://evilspeculator.com molecool

    But then there’s Prechter predicting a drop – how can I NOT fade that? LOL :-)

  • Anonymous

    hmmm ok
    maybe bail on calls before close…thanks for heads up

  • http://evilspeculator.com molecool

    Is ANYONE reading that HUGE note I plastered all over the chart???

  • Anonymous

    I read it
    not a strong move

  • Anonymous

    I do think ewi might end up blowig up like MF global – they seem to be getting more desparate to draw in subs, or maybe there a ewi subscriber born every day :-)

    By the way, a zero end-of-day vid might be useful for learning (hopefully such requests are not in banning territory!)

  • Anonymous

    AUD/JPY appears to be breaking out, waiting for the next hourly candle for confirmation

  • Anonymous

    Agree completely

    I’m looking at it and the bulls need to get ON with it tomorrow and prove the bullish case

  • Anonymous

    Will drop you a line within the hour if I may to discuss it;)

  • Anonymous

    yeah pretty strong today, a bit overstretched here but it’s made one lower high and one lower low past two days

  • Anonymous

    Amotka – have you got a WRITTEN DOWN, set in stone list of rules, and a complete list of stocks you trade?

    Your “free range” trading… see a trade you like and take it… was the cause of you blowing up on silver before.

    You WILL blow up again unless you stop, develop a real business plan, and work that plan.

    I would encourage you to post your rules here, I will even do a post about it :)

  • Anonymous

    Taking off the extra 50% here at 1276/12172.  100% position size now.

  • Anonymous

    His calls have been backtested many times on seekingalpha.com … he consistently and reliably gets it wrong

  • http://evilspeculator.com molecool

    ????????????????????????????????­??????????????

    D   A   I    L   Y      Z   E   R   O     H   A   S      B   E    E   N      U   P   D   A   T   E   D

    ????????????????????????????????­???????????????

  • http://evilspeculator.com molecool

    I don’t think so – there’s a sucker born every day.

  • http://evilspeculator.com molecool

    I think I was pretty clear – a signal below 1.0 is not a strong sign.

  • Anonymous

    Yeah, partially why I went short /NQ on an hourly Fakeout Sell
    jeez, I may be seeing things

  • Anonymous

    yes u were mole

  • Anonymous

    That makes me think: Why do we even bother to analyse the markets and spend countless hours in front of our charts? IF 95% percent of market participants lose money, just pick a basket of the biggest suckers and fade them. Actually this could be a great idea for a new financial product!

  • Anonymous

    NO. Trade your plan. What was your plan before you traded today?

    No trader in the history of traders has been profitable by saying “I’ll watch the market today, and it will tell me what to do”

    You need a plan. If you have not got a plan for how to exit your trade, you will not get an optimal exit

  • Anonymous

    Thanks CS.
    I am definitely better than before, in that i am not rushing headlong into trades (well not like in that past), plus not getting married to trades, plus exiting at stops. My psychology is no longer trying to hit a home-run. Making consistent small profits, but then let some slip as it were..

    Nonetheless, you are right, i still havent got an overall plan of how i trade. Will work on it :-)

  • Anonymous

    I was thinking the same thing.

  • Anonymous

    OMG I’m listening to it now.

    He actually uses the line “those wall street fat cats”

    Its straight populist garbage

  • Anonymous

    GN al…..what a day….and feels good to be cash…those little devils have something up their sleeve for sure

  • http://evilspeculator.com molecool

    Don’t waste your time. BTW, I’m switching the evil lair into defcon 2 – ominous signs on the horizon.

  • Anonymous

    Thats why they have index funds.

  • Anonymous

    I dont know how i was ‘taken in’ by Prechter & Co in 2009/10 – i suppose we all have a need for a ‘Guru’ to show us the (wrong in this case) path :-)

  • Anonymous

    I dont understand how the subscribers still have money to subscribe and trade at the same time. I mean hes been short since early 2010.

  • Anonymous

    does not look updated from here

  • Anonymous

    So, just fade anything less than that value? Was thinking we had somthing else developing.

  • Anonymous

    So, just fade anything less than that value? Was thinking we had somthing else developing.

  • Anonymous

    So, just fade anything less than that value? Was thinking we had somthing else developing.

  • Anonymous

    So, just fade anything less than that value? Was thinking we had somthing else developing.

  • Anonymous

    So, just fade anything less than that value? Was thinking we had somthing else developing.

  • Anonymous
  • Anonymous
  • Anonymous
  • Anonymous
  • Anonymous
  • Anonymous

    Amotka. In the nicest possible way :)

    You said “you would work on your rules” before. But you could not help yourself. You traded without rules and BLEW UP.

    If you trade without rules you WILL BLOW UP AGAIN!

    Speaking for myself. I blew up 6 times in a row, over 5 years, before I became profitable.

    AND I was trading exactly the same patterns as I trade now.

    I would have blown up again and again until I decided to treat trading like any other business and to be a professional. 

    Many traders on evilspec have decided, in the blink of an eye, to become professionals. BobbyLow, Dudeplunger, RBW… all of them *are* professionals because they act like professionals.

    There *has* to be an area of your psyche which is blocking the idea of doing this properly. 

  • Anonymous

    Amotka. In the nicest possible way :)

    You said “you would work on your rules” before. But you could not help yourself. You traded without rules and BLEW UP.

    If you trade without rules you WILL BLOW UP AGAIN!

    Speaking for myself. I blew up 6 times in a row, over 5 years, before I became profitable.

    AND I was trading exactly the same patterns as I trade now.

    I would have blown up again and again until I decided to treat trading like any other business and to be a professional. 

    Many traders on evilspec have decided, in the blink of an eye, to become professionals. BobbyLow, Dudeplunger, RBW… all of them *are* professionals because they act like professionals.

    There *has* to be an area of your psyche which is blocking the idea of doing this properly. 

  • Anonymous

    Amotka. In the nicest possible way :)

    You said “you would work on your rules” before. But you could not help yourself. You traded without rules and BLEW UP.

    If you trade without rules you WILL BLOW UP AGAIN!

    Speaking for myself. I blew up 6 times in a row, over 5 years, before I became profitable.

    AND I was trading exactly the same patterns as I trade now.

    I would have blown up again and again until I decided to treat trading like any other business and to be a professional. 

    Many traders on evilspec have decided, in the blink of an eye, to become professionals. BobbyLow, Dudeplunger, RBW… all of them *are* professionals because they act like professionals.

    There *has* to be an area of your psyche which is blocking the idea of doing this properly. 

  • Anonymous

    Amotka. In the nicest possible way :)

    You said “you would work on your rules” before. But you could not help yourself. You traded without rules and BLEW UP.

    If you trade without rules you WILL BLOW UP AGAIN!

    Speaking for myself. I blew up 6 times in a row, over 5 years, before I became profitable.

    AND I was trading exactly the same patterns as I trade now.

    I would have blown up again and again until I decided to treat trading like any other business and to be a professional. 

    Many traders on evilspec have decided, in the blink of an eye, to become professionals. BobbyLow, Dudeplunger, RBW… all of them *are* professionals because they act like professionals.

    There *has* to be an area of your psyche which is blocking the idea of doing this properly. 

  • Anonymous

    Amotka. In the nicest possible way :)

    You said “you would work on your rules” before. But you could not help yourself. You traded without rules and BLEW UP.

    If you trade without rules you WILL BLOW UP AGAIN!

    Speaking for myself. I blew up 6 times in a row, over 5 years, before I became profitable.

    AND I was trading exactly the same patterns as I trade now.

    I would have blown up again and again until I decided to treat trading like any other business and to be a professional. 

    Many traders on evilspec have decided, in the blink of an eye, to become professionals. BobbyLow, Dudeplunger, RBW… all of them *are* professionals because they act like professionals.

    There *has* to be an area of your psyche which is blocking the idea of doing this properly. 

  • Anonymous

    Ok, im getting the message :-)
    I am going to stop trading with cash until i get a rule set sorted
    I think it has taken me this long just to get familiar with the markets & instruments till now
    Now the serious work begins for me!

  • Anonymous

    I’m not sure why everyone feels so blue about today.   I just followed the setup and it worked.  I think everyone is just so conditioned to MM fuckery that they are spooked out of good trades too easily and are scalping minor points rather than getting fat moves.  That being said, I took profits at the end, and just have normal position size into tomorrow, but its heavily ITm so I’m letting it run rather than risking a gap up tomorrow and then having to chase.

    Have a good evening dudes, cyas tomorrow.

  • Anonymous

    Maybe I see divergences where they are not.  Mole – What about the Daily Zero (since mid-October), bottom panel…..keep waiting?

  • Anonymous

    I hate to be brutal here, but I’ve tired of the constant requests for “free”, sadly following a trade that cost people many times the price of a ZL subscription.  I’m not currently a subscriber (because I don’t have the time to trend or day trade right now), so I can only imagine how frustrating these comments can be.

    To be perfectly frank, it is insulting to the creator of knowledge or information to treat it as having no value, when obviously you acknowledge value.  So I beg of you (and the other often guilty party) to stop insulting your kind host whose product you value but for which you have chosen NOT to invest.  (Gee, master of evil, did you ever think you would be called “kind” on this forum?)

  • Anonymous

    It were a joke (i forgot to add smiley!).
    I can afford it, but i need to be ok with basics of trading first, before being able to utilise its value!

  • rhae

    sometimes one just has to rely on your own stuff for a back up plan… in case something is screwy with the charts… I usually get in trouble for that… comment.

    so,  how did that trend line work that I tossed in early?  good, but it was a sucky day for bears…   http://screencast.com/t/bxnVTd…

  • http://evilspeculator.com 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„¸

    MUST READ!!!

  • http://evilspeculator.com molecool

    Next post – all explained.

  • http://evilspeculator.com molecool

    I just checked again and it does have today’s close.

  • Anonymous

    http://stockcharts.com/h-sc/ui?s=$COPPER&p=D&yr=0&mn=0&dy=10&id=p01344284713
    Copper is still in line for a downtrend but only hanging by a thread.
    Tomorrow is reckoning day.