Double Top Increases In Probability

This rally in equities is running out of steam, but we do not have enough evidence to get short yet. Technically we are still retesting the old highs, but as we rally it is attracting early bears getting short and bulls scaling out of positions. This is consistent with a market trying to form a trading range. A double top (which is actually quite rare) is now the highest probability)

tuesday1

tuesday2

Both of these setups I like for today, essentially USD reversal setups following on from the thesis of yesterday’s post, which gathers evidence as being the highest probability

tuesday3

tuesday4

Scott Phillips

 

 

 

 

Terminal Phase

This is Scott Phillips, I’m taking over this week while Mole takes a well deserved break. After the Federal Reserve fuckery last week I urge extreme caution when trading currencies this week. Ordinarily I trade strictly with the prevailing trend, however the increase in volatility is a classic canary in the coal mine for trend changing price action. With this I particularly mean the long running EURUSD trend, which echoes across everything.

Looking at the SP500 first, it is clear that we will probably test the old highs. In my view if you are long you should remain long, but bank at least some profits at the old highs (I am long). If you are not currently long there is not an attractive place to put a stop with a decent risk/reward ratio so you should stand aside.

post2

 

We can see this increase in volatility more clearly in the US Dollar Index, where we have gone from lots of very small candles to lots of very big candles. Stated another way, volatility has increased. Ergo, market type has CHANGED. This is NOT the same market we had two weeks ago, and to trade it the same way is to invite disaster! I am extremely suspicious of further upside in USD without a meaningful pullback.

post1

 

 

I have a nice setup for you, short USDCHF (anytime from the open, with a stop as shown on the chart). This is a textbook beautiful gap fill, and the odds are strong we see a real trend change here.

post3

 

Same basic turd rolled in a different colored glitter is USDJPY. If you play this one note that it is a high volatility trade so you should be aggressive about banking profits.

post4

In conclusion I repeat. Market type is changing. This is a time to be very cautious, aggressive about banking partial profits and not too tight with the initial stops on new trades. If you are not a genuinely expert trader I counsel you to take the week off :-)

Scott Phillips

Trading The House Down

It’s been an extremely pleasant day here at my make shift West Coast lair. It’s the first day of spring and of course the weather once again is awesome in Los Angeles with temperatures in the mid 70s only interrupted by a few fluffy clouds here and there. Meanwhile it’s been super cold over in Spain and of course I don’t miss any opportunity to rub it in when sending vacation pics to my buddies in Valencia.

2015-03-20_NQ_update

But not only that – while I have been busy shopping and running errands all over Los Angeles I somehow managed to trade the house down this week. The NQ campaign I posted yesterday morning alone booked full 8R at this point – it’s 16 but I only took 1/2% position size so it’s a bit over 8% thus far. I am advancing my stop to 4448 and just let it run all through next week. May I point out that this was one juicy entry as I pinned the very low of yesterday’s session.

2015-03-20_CL_update

Crude – I was almost about to pull this one today but luckily was too busy packing. Exited now with a juicy 2R profit.

2015-03-20_ZS_update

Soybeans – also exited this one with a 2R profit. If you are in this one you may want to hold it as I think it has legs. The Mole however is going to be enjoying some much needed R&R in Mexico, thus holding a ton of positions during vacations is generally not a good idea.

2015-03-20_EURCAD_update

EUR/CAD – just exited for 1R.

2015-03-20_AUDUSD

AUD/USD has banked me 2R as well I’m holding this one with a trailing stop.

2015-03-20_EURUSD_update

And finally EUR/USD – also banked 2R here and I’m advancing my stop to 1.075.

2015-03-20_CrazyIvan_PL

In related news CrazyIvan has now breached the 100R mark as it now stands at a total of 105 – accomplished in 15 months with around 2500 campaigns. That’s a heck of a lot of trades but even given the crappiest b/a spreads and/or commissions it amounts to about a 150% gain considering compounding. I am very much looking forward to auto-trading CrazyIvan with a small select group of investors later this year. FYI – this is a closed group of people I know, so please do not contact me about participating. But you are always free to sign up for the signal if you can commit to three roll-overs each day (7:am/15:00pm/11:00pm Eastern).

2015-03-20_CrazyIvan_PL

And that’s it for the Mole for the next 10 days as I’m heading to Puerto Vallarta, Mexico tomorrow afternoon. The pic above shows my view from the little casa we rented all the way on top of the hills. If I can’t forget about trading in that place then there’s no hope for me. Not only am I in desperate need for a real vacation but given today’s profits alone I think I more than earned it – I really hope you caught some of those juicy entries as well. In my absence Scott ‘The Convict’ Phillips has generously offered to take over here at the lair, so I trust you are in experienced hands. In case you are wondering, during my absence all subscription services will continue to run as usual. If you need help with anything feel free to shoot me an email but please allow a bit more time than usual for a response.

maxresdefault

¡Hasta Luego!

El Topo




    Zero Indicator


    Darth Mole Alerts

  1. poll

    • How many discretionary trades to you place per month?



      view results

      Loading ... Loading ...


  2. NinjaTrader
    Kinetick

    search warrant



  3. recent misdeeds

    1. Must Play Monday
    2. Trend or Range
    3. Mexican Murpy
    4. Double Top Increases In Probability
    5. Terminal Phase
    6. Trading The House Down
    7. Easy Prey
    8. Everything Must GO!
    9. Sons Of The Lair
    10. Bounce It



  4. links