Only The Paranoid Survive

You all know my motto: Just because you’re paranoid doesn’t mean they’re not out to get you. We are at an interesting junction here and I am seeing signs that point toward possible short term shenanigans on the horizon. Let me show you what I mean:

This is the setup – after a two week short squeeze the E-Mini has bumped into another volume hole and apparently is in the process of gathering strength to overcome it. After all we are heading right into the annual EOY Santa Rally, right?

Except that the VIX has been creeping upward all day. And the rate of ascent does not match the sideways action we are seeing in the spoos, so something is definitely up.

Also noteworthy is my VIX:VXO chart – the latter is a measure of implied volatility calculated using 30-day S&P 100 index at-the-money options. So basically ATM vol is on the rise in comparison with vol across the option chain. In plain English this means we may be seeing a short term shake out next week.

That puts me in a bit of a bind as I’m long the E-Mini right now with a stop below the 100-day SMA. For now I will keep that trade in place but my I will advance my stop below the 100-hour SMA now.

Meanwhile our GOOG trade is still looking pretty good – we got a great entry near the SMA and my stop is still below. If we get a shake out next week that one may be retested, so be prepared for that.

Here’s a little freebie to appease the leeches: AMZN has been riding up hard and is now painting an inside period two days after an outside period. You know what to do and I think both directions are good to go come Monday. If you are confused about the rules then please check our cheat sheet.

A few more goodies before we’ll call it a week:
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.

Silver has been scaring the children and fortunately we didn’t take that ST long position this morning as we dropped quite a bit lower. We are now near a daily NLSL which has already been tested. I want to be long here with a stop below today’s lows. Easy setup and if she goes then I’ll flip it for a short.

Sugar looking good thus far but I sure wish it would get out of the gate. The 100-hour seems where things keep failing and we need to see a breach here sometime soon.

Cotton is also looking very attractive as it just popped over its 100-day SMA and is painting an inside period at the same time. Great setup and if you want ST support look no further than the 25-hour SMA.

The old greenback stopped out my tentative ST long this morning and we’re even back below the 25-hour. This thing couldn’t get a bid in a Siberian prison holding a fistful of pardons. But at least it’s painting an inside day setup today and you better hope it’ll breach the upside or I’m going to charge you guys in Euros! 😉

USD/JPY has apparently been in shake out mode and now finds itself at a daily NLBL. The first stap higher has been punched back below and today’s close determines our trading direction – at least for now, the NLBL is good for another two sessions.

The GBP/USD is proving to be a handful – I got sand in my face when my original long setup got stopped out this morning. But as I’m tenacious I would be willing to try another one if it manages to pop above that 25-hour SMA. Depending on how we close I may however also look at some puts starting Sunday night. So keep an eye on this sucker – that diagonal resistance line should be good for some ill-gotten gains.


Before I let you go another friendly reminder that you can now also follow my posts on Google+, so please add me to your circle if you haven’t already. That’s it – now it’s Hefeweizen time! Have a great weekend everyone – I’ll see you Sunday.


This entry was posted on Friday, November 30th, 2012 at 2:24 pm. Both comments and pings are currently closed.

  • Darth_Gerb

    short term shake out next week.
    I’m good with that.  due diligence of course.

    S&P100 T development..

  • ridingwaves

    why not shake out in next hour and ramp on mutfunmonday?

  • Skynard

    Spec of div 5 min

  • Rightside_ot_trade

    Thanks for those softs mole, been very patient withe them this week
    just taking short term trades.

  • Schwerepunkt

    I’ve got a Hacker-Pschorr ready to go . . . 

  • ridingwaves

    fed released next months temp operations and Monday is sale day only…but any effect could be mooted by mutual fund monday…

  • BobbyLow

    From the “Never Say Never” Department – Again.

    I thought my Day Trading Days were over.  Then on Monday Morning, I began to Day Trade Currency Pairs.  I wound up with 21 Round Trips for the week and made a decent Profit in terms of R.  

    It has gotten to the point to where I don’t want to hold anything overnight because of the way the game is played.  It was actually kind of nice putting the “Closed” sign out at 5 PM EST everyday.    I left some money on the table a couple of nights but I also saved some money on a couple of nights. – So Whateva.

    The only exception to the above is Oil Positions especially when the position is long.  There’s also a feel that comes with trading the slippery stuff.

    Anyhow, this has been a different kind of week for me and one that I might get used to.

    Forex is back to Cash and I’m still Long Oil.

    Have a great weekend everyone.   :)

  • AmazingLarry

    Good week. Thanks, Boss. 

    What’s “muni fund Monday”? Fundo’s reload positions on the first day of trading each month or is it a seasonal deal?

  • molecool

    Ah, slinging the short term now. Then make sure you catch my early morning briefings.

  • molecool

    You BASTARD!! I can’t get those here… love them.

  • Joe_Jones

    LoL @ the close

  • BobbyLow

    Will do Boss.  

    Thanks for all that you do.

  • Joe_Jones

    That is one gang-raped tired stock

    Do I see an island reversal pattern?

  • Skynard

    well, dumped the 146 calls 80%. Till next week. Good weekend all:)

  • captainboom

    I would think you would need a gap down in order to call it an island reversal.  i.e. Too early to call in my book.

  • Skynard

    Lol, that was nuts. Monday ramp, will be looking for ST short set-ups:)

  • badflightrisk

    If you want action you need to try JRCC.  It went from up 11% to down 13% and finished up 3%……all today

  • Darth_Gerb

    that wasn’t nuts, that was month end.
    as we covered this today, Basta!

  • Skynard

    Well, would have expected more juice. Like some Nitro:)

  • Schwerepunkt

    It’s a big bottle with the ceramic stopper.  :)

  • Joe_Jones

    Thanks Boom

  • AMCabrera

    Im watching the aud/jpy it is moving a good bit still. Also aud/usd and gbp/chf have moved in my favor after hours very good signs.

  • AmazingLarry

    That thing is full of gaps and holes on the daily. The bears are going to have to keep the pressure up. It moved 100 points in Nov and the best they could do was the first major volume gap at $505. Below that, there’s like no iVolume until $425 and there are still no shorts. Can you imagine a 75 handle rip in a few hours?

  • Joe_Jones

    Congrats Sky. Very well played.

  • Microwave_Prince

    JRCC is going to $0.50.

  • Joe_Jones
  • Darth_Gerb

    meh, longs locking in profits gained so far.
    if price goes higher, yeah puts will lose value but longs get more longer in compensation.
    until this chart shows some sign of reversal, I’m not going there.

  • molecool

    “so instead of guessing, I’m going to wait and see which way it topples.”

    Smart move.

  • molecool

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