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Reversal Wednesday Wrap Up
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Reversal Wednesday Wrap Up

by The MoleMay 12, 2011

I have already commented on the spoos’ bipolar disposition as of late, which made me a bit cautious regarding the odds at this juncture. This leaves us with today’s tape run in fast forward:

As I said – not a lot of participation today but solidly bullish and the little drop in the morning was clearly engineered to suck in a few more cuddly plush teddies.

Geronimo continues to kick ass and take numbers – one good long, one good short, and then a final short which lost 1.5 handles. Still a good day and nicely executed.

The fact that nobody has been commenting on ZeroFX in the past few days has been puzzling to me. In particular the setups on cable have been super sweet – see the annotated screen grab above.

In case you missed it – let me break it down for you: In typical Zero fashion we are always looking for divergences – yes. But in the process of fiddling with the various feeds that go into ZeroFX I presciently decided to plot one input separately and it’s what you see as the blue histogram right now. It seems that selling and buying exhaustions on various time frames are preceded by those long blue spikes, as clearly evidenced in the chart above. The timing is sometimes a bit too early and my recommendation on the very short term (the 1kT chart) would be to have a tight stop and be done with it as the good trades do not seem to swing much lower before they resolve.

The 4kT chart seems to require a bit more finesse but the pay off can be tremendous. For instance – watch that long +6.0 signal which thwarted the entire signal panel. We ramped up 40 more pips before it turned – but then got bestowed with a 200 pip drop. On the longer term chart anything above +/-1.0 also seems to be good for a quick swing but depending on your system it may pay to wait for the big ones, i.e. +/-2.0 and above.

I’m going to keep this thing free for a bit longer as I’m still playing with various incarnations, settings, and time periods for ZeroFX. As already announced I am also planning on eventually introducing an email alert system (or perhaps SMS for a premium) as part of a subscriber service that lets you guys know when a signal sigma event occurs.

See you on the other side!

Cheers,

Mole


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.
  • http://profiles.google.com/acabrera768 andres cabrera

    I love the setup damn good stuff. Past few days I have been looking at it and I noticed the same +/-2.0 seems to be the almost sure swing.

  • http://evilspeculator.com molecool

    Ah, somebody is paying attention! Are you using it in the context of your own system?

  • http://profiles.google.com/acabrera768 andres cabrera

    Yea. I normally wait for larger spikes in the larger time fame, makes me feel better, avoiding being wore out with stops.

  • OldChicago

    Is that +/- BB?

  • http://profiles.google.com/acabrera768 andres cabrera

    I assume SD

  • kbmck

    Friday the 13th …my favorite day

  • kbmck

    That was posted on May 10th …”For
    anyone wondering, we are currently at 81 calendar days since the 2/18 top.
    If the pattern were to hold, the 87th day is Monday the 16th (although Friday
    the 13th has a nice ring to it.)” http://pebblewriter.blogspot.c

  • http://evilspeculator.com molecool

    NO – I'm talking about the signal spikes on the indicator panels.

  • Joe_Jones

    I'll have a bite of that tiny H&S pattern on the bottom picture.

    😉

  • http://profiles.google.com/acabrera768 andres cabrera

    Yea, matter of fact because of the spot on spikes in the sterling I've traded more of it lately. I just set a tab on reload every 5 seconds and go with it. Now I read you mentioning sending timestamps for alerts for this. I do not use ninjatrader or use a broker that offers it.

  • jimallega

    god i want one!!!!!!!!!!!!!!!!!!!!!!!!!

  • bisq

    Well as expected we gapped lower today , retraced it to fill but then surprisingly put a cherry on top with a 50bp upday.  I think those 50bps get scrubbed tomorrow by the close although cautionary for bears was that Wed was a 90% down day and as such statistically speaking its usual for a rally lasting 2 to 7 days. Im looking for short set ups in energy and financials into the weekend and another entry point into increasing long gold.

  • http://evilspeculator.com molecool

    Longer time frames – the 10kT chart for instance seems to be great for divergences.

  • http://practicalt.blogspot.com/ Gold_Gerb

    yes, yes.
    keep the weasel down low.

    I was expecting volatility today.  and we got it.

  • Joe_Jones

    Emini watch comes to the same conclusions. http://emini-watch.com/

    Some big moves expected soon.

  • raised_by_wolves

    Then the LORD God said, “It is not good that the man should be alone; I will make him a [woman].”

  • gsavli

    Looks like retest of Osama bin Laden globex highs is in works.

  • http://profiles.google.com/acabrera768 andres cabrera

    hey mole later on i save some screenshots from zerofx I want to show and see what you think.

  • DarthTrader

    Silver short term
    Gartley Sell Pattern from Wednesday's decline to an ABC up from Thursday premarket low.  Price needs to get to 36.75 the 61.8% of the Wed thurs sell off yet the ABC resolves at 37.02 which is also where price hits the down trend line from the 4/29 highs and 5/10 highs . . . So sell silver at 37 with a wide stop up to 37.96 the 78.6%    37.02 completes the ABC that is also just above down trend line from the April Highs  Double Whammy.  If it resolves after the open I'll be buying out of the money ZSL calls way out like .05 or .10 each  in expectation of a 20 to 40 bagger by next Thursday. . . . Low investment, Hi Risk Super,  Hi Reward . . . my favorite kind of play.  Such plays you don't bet the farm on em you bet the milk money if they come in you buy a new farm.
     

    Longer term
    The point is Silver has an ABC down in Play from 49.56 and the shorter term play this Gartley on 120 min  from the 37's sets it up nicely . . . if it can break the Larger B today in the 33's should generate a lot of Volume (even on a Friday) enough to confirm the ABC down to 22.94 on the longer term play . . . So A-B should = the C-D in length BUT VERY IMPORTANT the C-D will be much higher in percentage terms thus making the move in ultra ETF's tracking Silver much  higher.  Simply Put the A to B 49.56 to 33.04 was a drop of 16.52 or 33.3%  exactly (16.52 X 3 = 49.56) . . . Now the potential C to D is 39.47 to 22.94  will be also a 16.52 drop but this time it would be 41.85% . . . Now on the first leg down in Silver lifted ZSL (2X Bear Silver)went from 12.83 to 24.49 almost a 100% move on a 33.3% selloff in underlying  the current low in ZSL for this move is 18.44 that suggests ZSL would go much higher than 37 if this next run comes to pass.  Finally I have a Silver market timer which has a cycle date next Tuesday the 17th which has an orb out to next Thursday the 19th if Silver maintains similar trajectory down as it has exhibited so far it will complete the ABC by then and I'd be placing bullish trades on as that will set up a  Bullish Gartley Signal  which has been 15 months in developing.

    No time to do charts today but you can verify all of this

    Oh did I say 40 or 50 bagger?  More like 100 plus bagger this close to Op expiration & the Greater percentage move thrown in.  I had 40+ baggers I took off to soon on the first leg down this promises to be better . . . if the probable thing happens over and over for bit ie odds are still a bit long so be careful

  • OllyVaradi

    Right. Which one of you lot pulled out the wrong plug, the one I have marked “Disqus – DO NOT SWITCH OFF.”

    I have to report back to Moley on this and I reckon he'll not be happy.

    Besides, I have been unable to post my game plan for today which was one of those days where I nailed it perfectly. LOL.

    Short DJ futures again at 12,735, stop already in at BE.

  • tradingmom

    Zero seems to be having a few glitches today — anyone else think the signal has a few blank spots and the actual zero # isn't showing up for me…

  • ronebadger

    what's BE?

  • OllyVaradi

    Break even

  • captainboom

    Break Even

  • captainboom

    Unless the reading is zero, because I see the number 0 in white. I've noticed that sometimes there are gaps in the zero signal. I figure that's either a gap in the data Mole is using, or it's a divide by zero issue that he's working around by not printing data. There are some gaps in the hourly zero a few days back as well.

  • skynard

    Amazing how much GS is sucking wind lately. According to the moving averages they are in a bear market.

  • Rightside_ot_trade

    the signal is there with some gaps, if it looks odd you can also look at the mole indicator just above ZL

  • Rightside_ot_trade

    Also near the 37 target (36.9) is the DeMark TDST Support from 3/30 (on the Daily chart)

  • tradingmom

    What is up with blogger today?  Can't access most of my other fav blogs 🙂

  • http://thefxspeculator.blogspot.com Onorio

    It`s down since Wednesday, it suppose to be 1h maintenance but something went wrong…no prevision to solve the problem.

  • fraterperdurabo

    Fantastic trading ranges and volatility. Let's see if TLT can break out and S&P break down.

  • http://profiles.google.com/acabrera768 andres cabrera

    Hey Mole I was wondering if you were thinking about adding time frames? Maybe 1hr. So far if you wait for it zerofx is working nicely.

  • volar

    lots of volume for a friday

  • http://evilspeculator.com molecool

    The 4kt chart is pretty close to a 60m on the EUR.

  • http://evilspeculator.com molecool

    Cheater!!

    See folks, you just can't trust women…

  • http://evilspeculator.com molecool

    I usually check for that – unfortunately there are other issues that can cause this in ThinkScript. As you can tell it never happens on the ZeroFX side.

  • tradingmom

    Funny thing is, my tape reading has been 10x better today w/o my list of blogs working…nice way to end the week.

  • tradingmom

    The 5 min chart has a nice bottom trendline, sort of painting out a wedge…watch for a zero divergence and a big snap back could follow…

  • http://profiles.google.com/acabrera768 andres cabrera

    Yea 30min chart. This thing is kicking ass love it.

  • http://thefxspeculator.blogspot.com Onorio

    No comments….

  • tradingmom

    Mole — question: What is the significance, if any, of the divergence between the rough and smoothed hourly zero signals — one has a lower low and one does not. 
    Thoughts…on SPX daily chart, there is a triangle forming at the top.  Looks like we bounced off the bottom trendline again today.  http://screencast.com/t/obfCis…  Also, so far, today is an inside day.  If we break below, we will break the trendline.

  • fraterperdurabo

    Banked coins on my SSO putters but still in TLT longers.

  • BobbyLow

    Good job holding on to TLT.   I stopped myself out of Long TLT yesterday.  

    However, I'm actually having a good day in spite of myself.   🙂

    UUP is kicking ass.  EWG is really tanking and my short Banks are going down the toilet.   SPY Puts are are doing good and I cut my QQQ Hedge in half.  

    I'm trying to improve my hedging strategy.  I think it's getting better but it still needs work.  

    As I write this, I can hear horses galloping in the background as the Calvary tries to come to the rescue.  This time maybe just maybe they can get lost along the way.   🙂

  • Kudos

    just sold my /zn (futures for tlt basically) because of the zero and its never bad to take some profits

  • amokta

    Great analysis as always – lets see if it plays out like last time!
    Dollar up too

    (nb disqus a pain, having to reply via disqus dashboard!)

  • fraterperdurabo

    Congrats – (almost) nothing beats the feeling of banking coins on a Friday. 🙂

  • http://evilspeculator.com molecool

    Yeah, that's a nice way to end the week.

  • Kudos

    agreed

  • http://evilspeculator.com molecool

    Difference – well, the smoothed signal is there for a reason: We are slowing the signal down in order to cut down on the noise, so it'll always be later than the raw one but it'll be a better representation of the overall trend.

  • http://evilspeculator.com molecool

    Wanted to add to this: The fact that even the smoothed signal is swinging wildly was a contributing factor of me stating that I didn't like the odds here. Another complete reversal today makes that very point I think.

  • Rightside_ot_trade

    so if it turns up on the next hour , it looks like it will be tracking price (no divergence)

  • BobbyLow

    Just sold the last of my EWG Puts and got out with only a +.3 R Gain on this batch.  I don't think I ever want to trade thinly traded Options again.  For most of the day there was about a 40 Cent Spread and this was for ITM Options with only a week left to Expiration.   Then when I wanted to get out, the computerized market kept moving the target as I tried for the middle price.  When it decides to move, EWG can move very fast which added to the problem.   

    EWG will probably tank even more now that I'm out.  But from now on, I'll try to stick with Liquid Options that have a reasonable spread and are a lot easier to manage.

  • ds2

    And TM as you said – we are wedging and it is getting tighter – hence the Up Down days.  Probably won't break till next week.

  • http://thefxspeculator.blogspot.com Onorio

    First time since last year im gonna put my money in this market…bought puts around 1340

  • OllyVaradi

    Haven't been able to post all day (you lucky, lucky, lucky b………, anyway). Is it just me? Can post from my mobie, just not lappy.

  • skynard

    Hedged my shorts with some OTM Spy calls.

  • http://evilspeculator.com molecool

    Disqus is a real PITA lately.

  • gsavli

    what strike and exp. did you choose.

    we might as well have some of that P3 now, if there will be no QE3.

  • BobbyLow

    Looks like they changed the VWAP Train Schedule to 1:55 PM.  It's been chugging along steadily since then.

  • volar

    Suprise! Jk

  • ronebadger

    Is what's her name above J Lo Hewitt?

  • BobbyLow

    Looks like the Train is taking the Scenic Route to VWAP.   Maybe it'll get derailed.   🙂

  • http://evilspeculator.com molecool

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