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Shake N’ Bake!
151

Shake N’ Bake!

by The MoleJune 7, 2012

Not much to report today – we’ve got a typical ramp and yawn in the works here. Highlight of the day so far was the cattle prod up the bears’ consolidated rectums at the open followed by a quick gap fill to shake out whoever was masochistic enough to chase that candle up. Of course, if you paid attention in evil 101 class yesterday then you went short at the touch of the 1329 mark with a stop only a few ticks away. The rest, as they say, is history. That volume hole truly is the gift that keeps on giving. Shake ‘N Bake!

Anyway, I’ll be brief today as I don’t see many setups of note – too much noise in the tape right now:

A quick revisit of our volume profile chart – rather obvious that the bulls got stopped in their track right at the volume hole today. But that does not mean it’s all over – usually the first attempt fails and I don’t expect this to be the last time we’ll see them pounce at it.

If you are a sub then you probably remember my P&F chart. Last week, while we were still scraping the floor, I was suggesting that we would need a push above SPX 1295 for a low pole reversal. Once we got that plus a bonafide VIX buy signal the die for a push higher was pretty much cast (Iacta alea est – for you Latin lovers – no not those, the language). What matters now is a breach or failure of SPX 1330. Even if we see a quick washout afterward I would propose that the bulls are running the tape again.

It’s time to take profits on CAD/JPY – that was a nice inside day candle and it did us the courtesy of proceeding straight to target. Why can’t other FX pairs be so well behaved?

It’s possible that it’ll pull a EUR/JPY on us and just keep on pushing yes but I would still take partial profits here and only go in if we see a close above that NLBL. Also note that we’re also right at the 25-day SMA here, thus increasing the chances that we’ll hit a bit of resistance here. So maybe the smart trade is to wait for a breach and a re-test of new established support.

Similar story actually on ZB – the 30-year treasury futures – but in the inverse. We are at the daily NLSL but that 25-day SMA is rapidly pushing higher and will catch up with prices in a day or two. So again the smart trader may wait for a breach below followed by a bounce at the 25-day SMA and then a last kiss goodbye back at the NLSL. Of course it may just run away from us but when it comes to trading the tape there are never any guarantees. And you’ll see that letting good trades come to you instead of chasing them pays off over the long term. After all – we do know an easy trade when we see them – don’t we? 😉

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.
  • http://evilspeculator.com molecool

    Do I need a neon light up front or something?

  • Rightside_ot_trade

    /SI hourly double inside period

  • Skynard

    Moved stop to B/E @ 1320

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     working on a third…  not sure how those pan out generally. you?

  • captainboom
  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/789d1ca6-063b-4081-906e-ffb94380314c/2012-06-07_1430.png
    found my first setup. top is a buy and bottom is a sell. the stops will be either below buy order or above sell order.

  • Joe_Jones

    Jeez, it’s like watching the paint dry

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Pretty much sums up today’s “action”…
    http://www.youtube.com/watch?v=ur5fGSBsfq8

    a classic if you have just under 4mins.

  • Joe_Jones

    hahaha. 4 min well spent

  • Schwerepunkt

    Thank for that — made my day.

  • Skynard

    OMG!

  • Joe_Jones

    ???

  • Joe_Jones

    whilst we are at it…

  • Joe_Jones

    We broke down from the wedge on 5 min ES

  • Skynard

    Falling asleep. ZZZZZZZZZZZZZZZZZZZ

  • Schwerepunkt

    Yeah, I went and did some chores. Either that or I’d have to take a nap.

  • amokta

    Spanish bonds raised $2 bill.
    Did Mole say he was nipping out for some shopping earlier? :-)

  • Skynard

    Ya, kinda glad that /ES was stopped out. Probly try for a VWAP close to keep us guesing.

  • Joe_Jones

    must be the steak 😉

  • AMCabrera

    screw that setup for the AUD/USD that i posted. I need to chill out.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Oil leaking

  • Joe_Jones

    sell off looks engineered

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     I was just thinking that. don’t want to get caught here.

  • Joe_Jones

    Yep. Closing shorts now. Don’t want to get caught either.

  • StrikeFirst

    What makes you say that?

    I’m very curious.

  • Joe_Jones

    the weak ZL signal

  • amokta

    Perhaps a double bottome beckons. The Russian bear is fighting back
    Oil/copper as Peter says remains unswayed by the irrational exuberance
    Nat Gas deflating

  • StrikeFirst

    Ah! 

    Ok, got it. Thanks.

    (I’m a cheap leech, and not a sub.)

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     The market depth looked phony.  Not sure how to explain, or if it’s even worth offering into evidence.  What I saw was persistent sellside imbalance being met with just enough bids then carrying on for far longer than you’d see. “Managed down” is what I’d say, but again, no real clue here.

  • Joe_Jones

    You should give it a try, man. Makes trading a breeze during non-trend days like today. A strong ZL signal indicates participation from the bigger players and essentially gives you insight whether it is worth chasing a move or go fishing. You’ll pay for the subscription cost in a few minutes if you can read the zero correctly.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     Funny, I didn’t see a strong ZL signal at all today, except at open…

  • Joe_Jones

    Little participation today. I went short right at the volume hole as it was an easy play with little risk. Out of the trade now and going to have a mini steak. Tomorrow is another day. Next week is OPEX so I expect a lot of Monkey Business.

  • captainboom

    If you played that blue light special correctly at the open, you could have banked 10 points out of ES pretty easily.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    See that, certainly.  Didn’t do it of course, cuz I was screwing around with copper stops. But am I correct in saying that ZL didn’t volunteer much at all throughout the day?

  • Joe_Jones

    Ok one politically incorrect to finish the day:

    A guy goes in an Adult Store in Western Sydney and asks for an inflatable doll.
    Guy behind the counter says, ‘Male or female?’
    Customer says, ‘Female.’ 
    Counter guy asks, ‘Black or white?’ Customer says, ‘White.’
    Counter guy asks, ‘Christian or Muslim?’
    Customer says, ‘What the hell does religion have to do with it?’ 
    Counter guy says, ‘The Muslim one blows itself up.’

    ;o)

  • Joe_Jones

    you are correct re ZL

  • captainboom

    Agreed.  Might have been able to go long on the tiny inverse head and shoulders in the zero signal early in the day.

  • mrmik3

    its all good baby!

  • Ben Dutton

    Can anyone answer a couple questions regarding the set ups on the cheat sheet.
    1.  Net-Lines-does “three consecutive bars down” mean 3 down closes or 3 lower lows?
    2.  How do you manage the trade off the inside bar set up?  How do you determine profit target?

    Thanks in advance

  • newbfxtrader

    “It’s time to take profits on CAD/JPY – that was a nice inside day candle and it did us the courtesy of proceeding straight to target.” I look for lines like these! Very simple!

  • MrMargin

    re 1. three consecutive lower lows/higher highs
    re 2. Mole usually uses the resistance/support lines (BBs, SMAs and NLs) as targets, but your mileage may vary. Scott mentioned that the distributions of returns look differently for different asset classes (commodities have a lower edge for the ID but higher chance for 2R winners). You could orient yourself using this data and take profits according to the mathematical expectation of returns (e.g. get out of a comm. trade after reaching 2R or at least take half your position off)

  • AMCabrera

    I will try a long in the AUD/USD no tolerance no more 20 pips loss. My focus is still EUR/USD USD/NOK.

  • Rightside_ot_trade

    Should continue down, Not sure about a triple, likely some other pattern or in this case just consolidation after such a relatively large drop

  • StrikeFirst

    Osama bin Laden explicitly denied involvement in 9/11.

    It’s all a big lie.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    spus takin it in seat here

  • AMCabrera

    Oh well, going short USD/NOK and going long EUR/USD both normal 50 pip stop loss.. AUD/USD stopped out very quickly.

  • Schwerepunkt

    Well, first he denied involvement, then he praised the attacks, then his spokesmen acknowledged Al Qaeda was behind it. Take your pick.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    ZN breached its inside day to the upside. Bonds usually know what’s up, imo.

  • MrMargin

    ES daily candle looks bad, but be careful. We could see a retest of the bottom (high on bonds) and build a base before an extended move higher. IMO that’s the higher probability scenario at the moment.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    roger that. just happy to have found a tradeable signal on my own!  it’s not too too long an inside candle on /ZN (in fact it’s an NR4) , so i took it.  i am indeed cautious of the “global cb intervention” rip that is likely to occur at any moment.  such an intervention may boost bonds even…

  • Skynard

    /CL retraced nearly 78.6 and decided to take a long.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     I scraped enough shekels together to buy a silver contract at 28.07.  Already tossed it.  Last time they took a false break out to the cleaners the results weren’t pretty.

  • Skynard

    It retraced to 61.8 and should play out nicely for you. What do you mean “stopped out”?

  • Skynard

    /HG also at 61.8

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     Sold it here at 28.24. I trade those like hot potatoes.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     Roger. Bought that.

  • Skynard

    Ha, it is a hot potato isn’t it?

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     Big denomination. For me anyway:)

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

    http://refriedscreens.com/wp-content/uploads/2007/07/bertosama.jpg
    Osama was a puppet.  Bert is the true mastermind.
    😉

  • omelette

    there is also the mini silver future (/yi) if you want to limit your risk. Though the spread makes it somewhat worthless for shorter timeframes.

  • http://pulse.yahoo.com/_IF7HINHIP5ITYT6TDHACMWJUXQ Huisok

    man I might have to get back on the retribution train if take off….

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     belated tx

  • AMCabrera

    wham bam thank you mam. Jeez what do ya know. I waste of a Friday. I wake up and see OOh when am I going to learn Fridays are pointless to trade even if your trade does work out. That is it I will be getting in the habit of not trading Fridays.

  • Schwerepunkt

    ESU2 almost same volume as M. CNBC has switched to the Sep contract. Just sayin . . . 

  • Schwerepunkt

    It’s a twisty Friday. Fed buying long-bonds today. 

  • AMCabrera

    http://www.youtube.com/watch?v=1-W1SDA6g_c
    HOWEVER, if USD/NOK comes to 6.1200 by de jure I have to short it.

  • DarthTrader

    Yes, Fridays, especially Option Expiration Fridays used to be loads of fun with all kinds of volatility.  Not anymore, might as well trim this day off the trading week and set a few alerts on the smart phone and go fishin, read a good book or play with some sassy skirts

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     stopped out of HG. /ZN worked.

  • AMCabrera

    Yea, most certainly Fridays have been a hit or miss. Unfortunately the hits on fridays cause more bad behavior. Not anymore by Thursday all major positions will be closed.

  • amokta

    Bearzilla strikes again? Lets see what happens, a dip might be healthy for bull run
    http://1.bp.blogspot.com/-ow2OTZJHzOA/TzzN6t7I7UI/AAAAAAAABq8/ZoAxbkKL2cY/s400/godfire.jpg

  • bdoone

    Copper & Crude -2.92% with equities barely negative?  Now that is a divergence.

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

    morning rats.

    http://i48.tinypic.com/2q87s02.png 

    If AMC is correct, look for Friday blahs with price bouncing between the 50 & 200 hourly averages.

    for the bull, look for a test of the 200ma, with support and a Sunday run to a token new high.  creating a cup-n-handle pattern.

    for the bear who just can’t give it up, look for a break of the 200ma, and a tepid (50% retrace) low on Sunday.

    -DG

  • DarthTrader

     Yes, Bonds made a high volume high which is not promising for a final high . . . market would need to retest with a low volume high then it would be time for some serious selling

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    But it’s just how the Bernank wants it.  “No inflation” except in financial asset prices.  Makes you wonder.

  • amokta

    So who blinks first?
    Are commods more dominant than equities, and equities must follow?

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Wish I knew.  But clearly bonds and commods say “deflation.”  

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/0ac7b457-f2e4-4d29-b729-c28ba865efe0/2012-06-08_0928.png
    nothing fancy just extended to the right. If it cracks this oval again it becomes null and void.

  • Schwerepunkt

    At some point, equities rally on LOWER energy/commodity prices. I just don’t know what that price point is. Fundamentally, lower energy prices are good for the economy, but then again, in this upside down world of financial/trading instruments, that may not be the case for the markets.

  • Schwerepunkt

    Taking the day off to visit one of my rental properties. I have to wrestle with and retire an old drain pipe. 

  • http://practicalt.blogspot.com/ Darth_Gerb
  • amokta

    Danger is in the air, this Eurozone problem (aside from US issues) can’t be simply ‘disappeared’.
    Can deflation occur, despite ‘infaltionary’ measures. Pushing on a string c/o cheap credit vs direct money printing & giving it away to everybody (now that would be infaltionary)

  • ridingwaves

    actually lower energy helps miners and producers reign in costs

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     Yes it helps earnings. But not multiples, generally speaking.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     They’ve been trying that for years now (and not just since 2008).  That’s why we get bubble after bubble (latest being Treasuries). But ultimately, hyperinflation is the endgame of that effort.  Different from demand pull inflation, hyperinflation is when people lose confidence in the currency.  A rapidly approaching phenomenon, I wager.

  • Joe_Jones

    I am amazed by bucky’s strength today. 

  • amokta

    I wont be betting against the Tzar :-)

  • MrMargin

    Flat Zero Friday it seems…

  • Skynard

    Hehehehe, could be a three setting up my friends:)

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    ZL doing the funky chicken
     

  • Joe_Jones

    Wow, that was a strong TICK number

  • Joe_Jones

    Loading shorts for a quick play: Neg div on 5 min ZL.

  • Skynard

    Long the /ES on the signal touch:)

  • Joe_Jones

    hehehe, playing against each other again 😉

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Get a room

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Say if the green mole line forms a head and shoulders that looks like a halloween ghost costume, does that mean prices are like to go lower?

  • Skynard

    Been keeping an eye on Europe, nearly recovered from a 1% loss. Usually a good indicator as to how or what to expect:)

  • Skynard

    Watching the buy points playing out again on the 5 min. 3 for 3 right now.

  • Joe_Jones

    Blue arrows should work better today

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     yep seems tick for tick.

  • Skynard

    Keep an eye on Bucky as well! Just playing the inverse. Ya I know, correlations.

  • ds2

    Took the short here.  Can’t resist.

  • amokta

    Who is holding up the peace train – we should be spx 1330 by now.

  • Skynard

    Definately diverging.

  • supervilin

    Anybody knows what it means when the green mole and the red mole signal lines are very wide apart?

  • Skynard

    Looks like bull flag on the 5 min.

  • Skynard

    The further away from the signal line the greater the streangth.

  • Skynard

    Ya, definatetly not tick for tack:)

  • Joe_Jones

    a resistance trendline can be drawn on 5 min ZL it seems

  • amokta
  • ds2

    stopped out at BE

  • AMCabrera

    oval null and void. and just your normal Friday.

  • AMCabrera
  • Joe_Jones

    breached…

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Anybody think that divergence in ZL is worth playing short?  Or is it too skinny?

  • Joe_Jones

    Another massive TICK candle, but lower that the previous one. Buying panic from greedy CNBS’ watchers? Or real and sustained up move?

  • Joe_Jones

    I think so. Plus we filled the gap and have a blue arrow.

  • supervilin

    I think it is worth the shot too. there is also a divergence on intraday with AUD/JPY EUR/USD and copper (no new highs as of yet). just waiting for one more little push by the bulls… 

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

    short covering.
    break a level, and panic cover, then settle down.
    watch for resistance becomes support clues.

  • supervilin

    tnx Sky, it’s just peculiar, bc it seems that it would signal both, strong buying and strong selling when they go in the opposite direcions..?

  • Joe_Jones

    we are in some sort of a wedge on the 15 min chart. Let us see which way it breaks:

  • ronebadger

    what did the VIX just do?  10 mins ago    BIG jump!

  • Skynard

    Well, my take is that when signals are at equal distances from the signal it is a stalemate until price resolves.

  • Skynard

    Check out TVIX/VXX

  • Joe_Jones

    somebody knows something

  • Skynard

    Now it’s time to watch, draw a line from the 2 points below the signal line.

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

    (DG picks up a crumb, i’ve watched enough videos)
    😉

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

    ah, the kobayashi maru test.

  • Joe_Jones

    Ring a bell, somebody

  • Skynard

    Reduced half /ES, and holding for the next resistance point.

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

     That last divergence was pretty large. Perhaps the intensity of that first TICK move indicates a belated trend day. Otherwise, I would plow into this bid liberally.  As it is, just doing smalls. 

  • AMCabrera

    I went to the house of ill repute for a quickie.  They suck so good at everything dont they.

  • Joe_Jones

    LOL, truly pathetic. I found this one funny though: http://www.zerohedge.com/news/material-banknote-order-reinstated

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

    Tomorrow will be the most beautiful day of A M Cabrera’s life. His breakfast will taste better than any meal you and I have ever tasted. 

  • Skynard

    Watch the fakeout. Dashed line still above the signal.

  • AMCabrera

    I dont get it? 

  • AMCabrera

    pssh. (rolling eyes) Ok I need to call reggie n em and ask about tech stuff. Now thats funny right there.

  • Skynard

    Initiating buyback program /ES

  • Joe_Jones

    hahaha 😀

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

    you visited the house of ill repute.  you almost died participating in it. (ok, let’s pretend)  the day after will never be so bright having escaped death. you did see Fight club yes?

  • bdoone

    The House of Ill Repute?  I want to know why AMC was at Goldman Sachs?

  • Joe_Jones

    At support now both on ZL and ES

  • Joe_Jones

    JNK:TLT looks bullish 

  • http://profile.yahoo.com/X3UHQ24EPYQVH62MCJVJM4KIJI peter

    Force is strong with EUR/USD

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

    similar to May 23rd.
    could be some sideways in store.

  • ds2

    Great wedge on the ES hourly.

  • Joe_Jones

    we are coiling up for a big move IMO

  • 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„¸

  • http://evilspeculator.com molecool

    I swear – this place is turning into the Slope. Charts paleeze!!

  • AMCabrera

    Oh yes I do remember now. It has been such a long time since I’ve seen that movie.

  • AMCabrera

    Because I work for Kaiser and DGs cabal now. :)