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Scaring The Children?
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Scaring The Children?

by The MoleAugust 10, 2011

Volatility strikes again and we find ourselves at the edge of the abyss yet once more. Perhaps the spike up was the extent of the fourth wave up or perhaps this is only an attempt to scare the children before we bust higher.

Fortunately we fade emotion and instead employ our charts when assessing the odds:
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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 subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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I drew a fib retracement on yesterday’s spike up and thus far we almost exactly dropped 61.8%, which is really the maximum I would allow if we are to continue higher. So, what this means for us is that each handle below 1125.34 decreases the odds for a push higher. If we get to the 78.6% mark at 1117 it’s pretty much game over for the longs.

On the spoos we now see a cluster of buy net-lines starting at 1153 – remember that fair value is between -2.75 and -3.00 right now. We need to get there and start breaching them – a lackluster session today or tomorrow will solidly hand the momentum back over to the bears. I do see a bit of support at today’s lows – which also happens to be the lower boundary of my 25-hour BB. Further below is the 100-hour standard deviation at 1093, but frankly if we get there we most likely will see panic selling and nothing is going to matter.

That’s pretty much it – I’ll parse around and will chime in again if I see any charts of interest.

Cheers,

Mole

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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://practicalt.blogspot.com/ Gold_Gerb

    Another Post!

    you are a machine

    FYI some treasury nonsense in 10minutes or so (2pm EST)

    http://finviz.com/calendar.ashx

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

    Another Post!

    you are a machine

    FYI some treasury nonsense in 10minutes or so (2pm EST)

    http://finviz.com/calendar.ashx

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

    my T post was off (dang it)

    if we rally, it could go to 3am, but who knows!?
    maybe it will roll over after this news…

    http://i52.tinypic.com/15gq93l.png

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

    my T post was off (dang it)

    if we rally, it could go to 3am, but who knows!?
    maybe it will roll over after this news…

    http://i52.tinypic.com/15gq93l.png

  • Fearless

    The polar bear’s blackbox trading system is about to fire a major “BTFD” signal via the VIX today. So far 1120 is holding and the selling pressure seemed to have abated. The polar bear might enter a 10% long position near the EOD if the market holds up.

    Yesterday’s short squeeze was so relentlessly strong that the daily chart would sport a positive divergence even if the SPX is another 100 points lower, that’s why it’s a risk to take long positions now even if that major “BTFD” signal is fired today. A prudent speculator waits for a break of the acceleration line (1175 today) for a trend reversal trade. Like I have been saying for the past year, 1173 is the all-important level.

    A close above 1148.3 would be trouble for shorts.

  • Fearless

    The polar bear’s blackbox trading system is about to fire a major “BTFD” signal via the VIX today. So far 1120 is holding and the selling pressure seemed to have abated. The polar bear might enter a 10% long position near the EOD if the market holds up.

    Yesterday’s short squeeze was so relentlessly strong that the daily chart would sport a positive divergence even if the SPX is another 100 points lower, that’s why it’s a risk to take long positions now even if that major “BTFD” signal is fired today. A prudent speculator waits for a break of the acceleration line (1175 today) for a trend reversal trade. Like I have been saying for the past year, 1173 is the all-important level.

    A close above 1148.3 would be trouble for shorts.

  • Anonymous

    Hehehehehe! They want the children to sell at the low:)

  • Anonymous

    Hehehehehe! They want the children to sell at the low:)

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

    DOW -199

    if the bears were getting tired of (waiting for) lower than 10,800
    maybe they will spook and take some off the table.  ?

  • Anonymous

    On a side note – if you have been waiting to refi your mortgage, rates are looking pretty good.  I’m looking at saving about 17% on my monthly payment.

  • Anonymous

    OK, went long again on the backtest of the mini IHS pattern with tight stop. Higher high/higher low in place.

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

    Bollinger pinch on the SPX hourly.

  • bshah

    why can’t we have boom blast like y’day… what the fuck is stopping it…everything is kool…

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

    20,000 burned bulls holding the bag.
    not sure they like waking up at a lower price.
    😉

  • http://evilspeculator.com molecool

    Amazing how we reversed exactly below our 1153.5 buy net-line.

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

    [author removed]

  • bshah

    i believe we can go thru that.. YES SIR WE CAN !!!!

  • Fearless

    75 minutes away from BTFD.

  • Anonymous

    Seems like allot of smoke today:)

  • http://evilspeculator.com molecool

    Careful mate – this sounds a lot like you are talking your book. Embrace the tape that is – do not hope for tape that would benefit your own outlook.

  • http://evilspeculator.com molecool

    Do you have a plan either way? I hope you do if you have open positions.

  • http://evilspeculator.com molecool
  • Anonymous

    Exactly:)

  • Anonymous

    Mole keeps his word
    I seem to be seeing extra evil-goodness with subscription 🙂

  • Anonymous

    Should hold here, as the 50 ema @ 1145.54 on the 15 min.

  • Schwerepunkt

    on 1500-tick bar chart CCI about to bear cross 

  • Schwerepunkt

    on 1500-tick bar chart CCI about to bear cross 

  • Anonymous

    Are we painting a floor, or bombproofing the ceiling?

  • Anonymous

    Are we painting a floor, or bombproofing the ceiling?

  • Anonymous

    Are we painting a floor, or bombproofing the ceiling?

  • Anonymous

    Anybody see the 12:16 (ET) LOD for FAZ at 42.77, or the HOD at 1:13 of 79.43? What the freak causes that? Has anybody been on the wrong side of one of those with a market order — or on the right side with a limit?

    I have tried entering a GTC order way above (sell) or below (buy) and never got filled, then these things don’t happen all the time. My guess is only the MMs get the good side of those, but I can always try.

    I have level 2 and if I was watching at just the right time I could probably see what I think is happening. Probably a large market order that sucks up all the bids? Note that a lot of the bids (and of course the opposite for asks) are in small increments of a hundred shares so it would be easy to blow threw them. Right now you have asks high enough to get the 79 print (top ask 83.27), but the lowest bid is 50.86 by some FBCO, whoever that is. If the level 2 could be played back like a movie one could perhaps tell what is going on. Ay, ’tis royal puzzle.

  • Anonymous

    I don’t have a clue right now.

    If this picture shows on this post, I stole this it from Mole.   🙂

  • bshah

    I just saw SPY with 116.28 print.. not sure why..?

  • bshah

    Simple question for smart folks here.. How many criss-cross of indicators can the machine work on simultaneously to adapt and change the trade…? with that how many a human being can go thru and adjust trading…?  

  • Schwerepunkt

    Real indecision here. make up your mind, peas or corn? Edit: peas it is.

  • Anonymous

     🙂
    p.s. cant see pic though
    Anyway, good comments from Fearless & Moles ‘hidden’ charts, to show us the possibilities

  • Anonymous

    Picture didn’t come out.  You had to be there.  🙂

    Michael Jordan must be running the market by the amount of Head Fakes I’ve seen today. 

  • nyse

    They are pretty impressive.
    Checkit: http://screencast.com/t/vRoeoEWT

  • Anonymous

    Lost it but needs to jump back or will be stopped out. What kind of divergence do you see?

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

    SPY 113.33

    check your SPY fibonacci fan.

  • Anonymous

    Do we have significant bull div on the 60 min ZL ?

  • Anonymous

    Thanks Mole.  Looks like that buy line was rejected for now anyway.  The long was VERY tempting today.

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

    FYI – close ~20minutes – in case you are hypnotized.

    how’s the spx:gld doing? ah….yeah.

    http://stockcharts.com/h-sc/ui?s=$SPX:GLD&p=D&yr=3&mn=0&dy=0&id=p30005162250

    oh, I will be using the spike low of yesterday for an uphill Fib-fan if the recovery continues.
    usually a run up, pull back, then the chop up begins (if there is any).

    -GG

  • bshah

    any serious news coming out today after close..? 

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

    DOW -450

    close in 13m

  • Anonymous

    Buy one get one free at RadioShack? 🙂

    Anyway, markets looking more like going down right now

  • Anonymous

    Im sure your recycling the same -450 comment for the last 5 days 🙂

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

    yes, digital bits recycle – much more green.

  • Anonymous

    Well I’m not one of the smartest folks here especially the way I traded today.  As a Swing Trader, I should be taken out and given 20 lashes with a bull whip.

    It is almost impossible to adjust to every Intra Day swing at least it is for me.  Longer Term, I should have been SHORT PERIOD. But I wanted to play the Fib and all that shit.  So once again on a day I should be kicking ass, I’m trading like a chump instead and will be lucky to BE.  

    So yes “The Children are Scared but so are there Parents.  

    I’m back in with a small net short.  Catching this Fib is like catching  a Long Fucking Knife.  I did that Shorting the Bull and now I have begun to do the same thing by buying the Bear.

    This is not good trading.     

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

    My pappy use to say – if you go out in a Tornado storm son, don’t bring a box of nails.
    😉

  • bshah

    here we got.. glory days.. 500 mark again. i am sick of this…

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

    ok, it sounded really good, I have no idea what i’m saying.

  • http://evilspeculator.com molecool

    Quite frankly – that was awesome – perfect way to manage risk.

  • Schwerepunkt

    Yep, scary.

  • Anonymous

    Testing that 1119.28.

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

    margin calls?

    in 2008 it happend, but I think it was 2pm they usually came in.

  • http://evilspeculator.com molecool

    Analyze yourself – obviously those gyrations seem to make you nervous and that’s exactly the idea. Nervous traders usually are losing traders.

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

    where is Fearless?

  • Anonymous

    So THAT’S what a yo-yo feels like 😉

  • Anonymous

    Breaking down?

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

    DOW -550

  • http://evilspeculator.com molecool

    Public Service Announcement: We just sliced through new sell net-lines on the spoos which were at 1126.5 and 1121.5.

  • Anonymous

    Wish I were a better scalper.  In hindsight everything is there today.  Bollengers, RSI divergence , MACD rollover and Stochastics on the 15 min.  I gotta start taking some of these!  One other thing that kept me from goig long was the DMI + – and ADX.  Though the +- crossed, ADX was dropping.

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

    *Market Closed*

    15m more for the Casino.

  • Anonymous

    thats ES 10 mins btw

  • Anonymous

    Inside day w/ a huge range unfortunately.

  • Anonymous

    And what do you think The Children’s Parents are going to do when they see another 500 Down on the 6:30 News?  The people who haven’t already changed there 401K Allocation that is.  

  • Anonymous

    What is a spoos?

  • Anonymous

    Would you believe it!
    We gonna party like 2008?
    does this feel more like sept 2008, or April 10, or May 2011?

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

    S&P 500

  • Schwerepunkt

    Large contract on the SPX.

  • Fearless

    Got the major BTFD signal, but the SPX poked through 1120 so chances are more down side ahead. Like I said earlier, there is already a positive divergence forming but the SPX could drop another 100 points and still have that divergence. That’s why the polar bear didn’t go long.

  • Anonymous

    Well I have to tell you that I suck at scalping.  Up until today, I was having a pretty good week.  When I include today’s action, I’m now at 4 Wins and 4 Losses for a Net Minus $5.00 for the week.  So after 36 Hours work it means that I earned just under minus 14 Cents per hour.  

    But this is what happens when I try to trade out of my element.  One of these days, I’ll stick by my own rules or at least I hope so.  

  • Anonymous

    ES back above 1120 after the close. What do you guys make of it?  I think odds are higher for the retest of the lows..

  • Anonymous

    Not sure, wonder if he BTFD?
    Sent on the Sprint® Now Network from my BlackBerry®

  • Anonymous

     Originally came from the  symbol for the September contract which is SPU  but now it refers to the current most active month trading (which is September) but could be  March, June, September, or December.

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

    sell it allllll, and never come back.

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

    So the Bullish Percent lagging piece of Sh….  is a good tool?
    yes?

  • Anonymous

    Thank you GG.  So slicing thru that is bearish?

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

    come again? through what?

  • Anonymous

    Mole wrote “Public Service Announcement: We just sliced through new sell net-lines on the spoos which were at 1126.5 and 1121.5.”Shall I take that as bearish? 

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

    I would think so.
    support becomes resistance..thinking.

  • Anonymous

    Just got the #s – actually will save 23% doing the refi.  This is a no brainer.

  • Anonymous

    Some wave 4 here?

  • http://pulse.yahoo.com/_N2BRXG3E35GXBXZTEBSXLUSDCM B

    I need a critique of my trading today if you guys help. From 11:45 to 1:45 watched as MACD, ZERO and RSI all strengthened steadily. SPY was oscillating around VWAP into a penant. About the same time the ZERO’s strengthening became a pretty clear trend (Mole marked it) SPY breaks to the upside. After another 10 minutes of pushing out of the BB it appeared to be strong enough to be tradeable. Went long BGU at 1:56. Normally I would set my target at 1% gain, but because I was sitting there the whole time and wanted to observe what I happened I waited for the first sign of weakness and sold at 2:14 for @ 2.25% gain. A good day. Today was the first trade after a long break from day trading, while I put together more tools and got familiar with them. So I’m satisfied that at least for my current experience I traded well.

    Also just after this trade the trend turned. Looking at a short entry it seemed prudent to see if the trend would continue after reaching VWAP. After some attempts to hug the line it broke decisively to the downside around 3:30. It looked to be a good trade (although I did not take it). What do you guys think? Reason I didn’t take teh trade is I have a rule: Don’t Be Greedy. I made 2.25% today and I’m happy with that. About the time you get cocky you get slapped down, so now I like to be more selective in my trades.

  • EvilTrader

    Possible McClellan oscillator divergence today.That´s a very reliable bottom signal.

  • http://pulse.yahoo.com/_N2BRXG3E35GXBXZTEBSXLUSDCM B

    How often does that get updated? Looks like once a day? I need to look at prior divergences, this seems more like an uptick from a steep drop, probably need to see more follow through before calling it a divergence?

  • Anonymous

    slicing through sell lines – it is in english which you obviously understand.  YES it is BEARISH.  Now watch – we will gap up tomorrow ; )

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

    SPX Volume was lower today than the 8th.
    maybe that’s a positive long spin.
    ES futures were not as low too.

  • Anonymous

    Exactly.  Those that bought and believed the Tech Bubble Late in 2000 got Burned.  Those that bought and believed the Housing Bubble in 2007 Got Burned.  Those that bought and believed the Free Money ZIRP Bullshit Bubble in 2011 Got Burned. 

    The DJA is now getting primed to bring out the 10,000 Hat again after 11 or 12 Years. 

    So what’s the next Bubble?  Gold?  Treasuries?   Unemployment Insurance?    

  • Anonymous

    That’s been the pattern recently

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

    ah ha. blackberry.

    see, people do sneak peek from there mobiles.
    🙂

  • Anonymous

    I’ve got to go get on my Lawn Tractor and do some mowing in 97 Degree Heat.  

    But while I’m mowing, I do have a question.  Why was it when the Bull Market was Rip Roaring Upward, we were constantly looking for places to go Short and getting Wet a lot while trying to Pee against the Wind?  

    And now that we’ve finally broken down into a Bear Market we are  trying to find places to buy the market.  Is it that we like getting sprayed going against the wind?  

    Not trying to be a wise guy here but just thinking out loud.  

  • Anonymous

    The trade you took was a good one.  I saw it but let it go – trying not to day trade.  There were opportunities to get in earlier if you saw them (RSI divergence, MACD rollover, Stochastic).  Your smart move was to get out when you did.  That’s a great exit.  I tend to hold too long on all timeframes.

  • Anonymous

    ¤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„¸

  • Anonymous

    Bobby, if your timeframe is 1-3 days then its ok. Longer timeframe the highest probability play here is to do nothing and wait for a bounce to hit resistance

  • Anonymous

    Always within striking distance!
    Sent on the Sprint® Now Network from my BlackBerry®

  • Anonymous

    Always within striking distance!
    Sent on the Sprint® Now Network from my BlackBerry®