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Slowly Catching Up
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Slowly Catching Up

by The MoleAugust 31, 2009

1:36pm EDT: I’m slowly starting to catch up with my reading and my charts – trying to get back into the groove. Meanwhile equities seem to be in the process of picking a direction at this point:

We are basically in the middle of nowhere right now. The channel I drew is more or less hypothetical – not a lot of touch points. Participation on the Zero Lite is basically non-existent. This is the kind of tape that is either getting ready for a sell off – or the boys are slowly building positions for yet another rally up. Really tough to say right now and we are not anywhere close to picking a direction. Which is fine – as I keep drilling into your tiny rodent brains – the short term gyrations do not matter at this point and there will be plenty of head fakes before we fall off the cliff. Whatever the bulltarts throw your way – use it.

My game plan at this point remains the same – I am using every spike up as another ‘sell the rip’ opportunity. Volatility is low right now – Mr. VIX is hovering around the 26 mark and thus bestowing us with low option premiums. You will not see low volatility like that again for at least a year – perhaps even two – mark my words.

In my mind the risk here is not lower but higher volatility and remember that the premium on your puts (and calls) can increase significantly without the underlying moving even one single tick when vega starts popping higher.

In short – this is shopping season for the bears.

2:04pm EDT: Seems like equities are not the only ones locked in a trading range:

Annamall keeps reporting on the ole’ buck and she’s right that the Dollar ‘should’ move inverse to equities and that a rally here would favor the bears. However, as I pointed out on several occasions – do not take correlations for granted – they do have a tendency to detach or at least suspend for periods of time.

Right now the action in currencies are comparatively muted – I really need to see the buck break out here in a pretty short order (i.e. in the next few days) otherwise we could see one last slide to the downside, similarly to what we got beginning of July.

3:08pm EDT: As you know I have been following the NYSE New Highs New Lows chart intently:

I wanted to figure out when we registered such high readings the very last time. And – yes, you guessed it – the last time we did was at the very height of the market in early October 2007. So, you need to ask yourself – after a six month 58% rally in equities – what are the odds we are going to exceed October 2007 readings on this chart (for an extended amount of time)?

3:13pm EDT: Tyler over at ZH just commented on the stilfed break out attempt at the beginning of the hour – check it out.

3:45pm EDT: I just updated my BAA-TYX spread chart:

We actually dropped in the last week by a little again – which worries me. As I said – we might have to sit through some pain before this thing breaks for good.

Many thanks again to Hui, Kevin, and Graham for keeping me updated on the latest BAA feed.


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.
  • bdf72

    the conflict with disqus is probably running different blogs with different versions of disqus. logging into disqus does not solve the problem.

  • Iguanadon

    Springhill, thanks for your efforts over on SOH, but you really shouldn't like about me being a good poster….

  • rhae

    Thought I would check to see what CNBC was saying about today… weren't they saying the same thing last Sept.? Just a correction… Well I guess in a way they were correct, lol

    But the prevailing sentiment seems to be that even if a correction does come along, it will be healthy for the markets. Now is not the time, market bulls say, to be taking money off the table.

  • rhae

    Now I have to long in to post, I have a hunch they are getting a lot of flack and are working diligently to get problems sorted out

  • annamall

    The action of the tape is very telling to me. We are going to get a decent correction soon, will it be today, probably not, but who knows, but the tape has told me since last week, that we are close to that bigger correction. Then last retail dummy piles in before the rug is pulled out! I said it a few weeks ago Commerical realestate foreclosure will be brutal! yippee!

  • bdf72

    Kinda feels like all is left is the retail trader at this point.

  • http://zstock7.com/ zstock

    ENER buy alert-ENER doing just what I said it would–I think the most against you is 2% or 11.1
    11.7 –12 exit, short term–
    for you buy and holders–this is easily a $35 stock again!–one year or less time frame!

  • http://zstock7.com/ zstock

    CHG has 3 huge buy signals–2% below lower bb band, 30/50 set-up with 48 target, and 45 is the 200 day!
    nat gas utility w/ 20% growth –at least keep watching , but don't wait around for 44–you'll lose it!

  • springheel_jack

    Everyone's horsing round today.One more exaggeration isn't anything to worry about! 🙂

  • Stainless_Steel_Hamster

    This looks like a iv triangle (or flat)… 2 was a zig zag

    – – – 1037.81 1037.81
    1 – – 1028.78 -9.03
    2 – – 1032.26 3.48 -0.39
    3 i – 1023.62 -8.64
    3 ii – 1030.25 0.00
    3 iii (1) 1014.60 -15.65
    3 iii (2) 1020.60 6.00 -0.38
    3 iii (3) 994.46 -26.14 1.67
    3 iii (4) 1017.99 23.52 -0.90
    3 iii (5) 992.66 -25.32

    If this is it… 1011 here we go (and then probably 955)

    with a lot of returns to 1020's

    best regards

  • annamall

    sure does, 🙂

  • springheel_jack

    rhae, I had the same problem until I logged in directly at Disqus. Try that, it should sort the problem out.

  • shortcover

    UNG taking out lows again…and trading at 20% premium to NAV…what a dud that one is…

  • ColonelKurtz

    any minute now this triangle is gonna end. Which way? Don't know, but either way i smell vitory. All be it a small one compared to when the S&P goes to 400

  • shortcover

    correction…we aren't even off 100 pts on the Dow…3 pm will be the real test…unless the big boys come back after Labor Day next week…?

  • molecool

    LOL – wouldn't it be easier to just post a chart? 😉

  • molecool

    What's going on? Can you explain please?

  • cramar

    It is interesting that gold is coiling for a MAJOR move. I believe Prechter says it is down and McHugh (and James Sinclair) says it is up. Wonder if there is going to be some r-e-a-l-l-y bad news soon that will send gold flying up and the stock market flying down?

  • rhae

    really getting hard to stay awake, Centerline was correct, so far… Dog was up half the night chasing racoons around the house, I better not catch that little shit napping today…

  • springheel_jack

    Some people are having to log in every time they post.

    It was happening to me and I solved it by logging in at Disqus directly.

  • CaptainAnarchy

    “We are basically in the middle of nowhere right now.”

    Reminds me about what we used to say when I lived in the boonies –

    “This is *not* the middle of nowhere….

    But ya can see that from here.”

  • NewTrader3391

    silver is on sugar high last two days; while gold is down. anyone know why silver is rallying

  • CaptainAnarchy

    That sounds right. I haven't had any problems and I don't visit any other sites which use disqus.

  • bdf72

    Mole…just a good case of “commenting” blue balls. This thing keeps logging you out. You have to log back in to post a comment irregularly. It also happens during a commenting session. The only thing that might make sense is if you are running another blog in the background that has a previous version of disqus running that might explain the problem.

  • anthem

    hmm, have been shorting this at 116 to 116.5 and did this 4 or so times and catching a 1 to 1.5 ES points all day. Getting a bit concerned though as the upshoots back to 116 have been getting stronger and stronger. The last moved was very quick, so it this might be my last one playing this one down.

    I think that direction has to happen soon, but there will be some major headfakes coming.

  • ds2

    Big story in the SF chron today about Comm Forclosures on the rise.

    http://www.sfgate.com/cgi-bin/article.cgi?file=

    “In San Francisco alone, 75 percent of the city's top-end downtown office buildings traded hands in the past four years.”

    Not a good sign.

  • http://trading-to-win.com/ DavidDT

    is this dumb dam going to break?

  • bdf72

    Looks like we either sit until bond traders are done in 35 mins and if they decide to play for a fast buck or drop after 2pm. Retail trader might try to antcipate this but after this mornings red candle I doubt it.

  • jhnewman

    Jeff Cooper on Minyanville pointed out a possible pattern that might be playing out here for the top: Three Peaks and a Domed House (love these funny names). We had the 3 peaks last week, MAYBE the domed house this week or next.

    Check out the idealized pattern on this Web site (the yellow chart). This pattern can appear in any time frame: http://marketbear.blogspot.com/2008/05/may-7th-

  • springheel_jack

    Which triangle?

    The one I was looking at on the SPX morphed into a bull wedge and then expired into slight twitches with an upward bias that could only just be detected with the naked eye.

  • http://trading-to-win.com/ DavidDT

    w4 down printed on 5min – we might see some selling now
    target adjusted to 1007 SPX

  • http://dreadwinaard.livejournal.com dreadwin

    I don't know, but … as mole says above, “do not take correlations for granted – they do have a tendency to detach or at least suspend for periods of time”.

    My theory is that Chinese investors are looking for a safe haven. Historically, China was on a silver (not gold) standard.

  • Joe8888

    Intraday 10 min SPY chart…..Breakout of breakdown….?

  • http://trading-to-win.com/ DavidDT

    check your cookies

  • ablebonus

    It is playing catch-up. EWI doesn't think much of silver, but it is near a decision point, huge triangle on the 3 year chart nearing termination: http://screencast.com/t/dGQ00FVLRgHy

  • shortcover

    The 3 peaks I believe were June/July's head and shoulders…or at least I have seen an incarnation as such. The same formation took place on a yearly time scale with the dome just prior to the 2008 melt-down. Ususally if a 3-peak & dome occurs, it 're-sets' and will play out again, with damaging consequences. If this is the rounding top of the dome, I think pt 23? or so, then we would start to sell off in mid-late Sept at the earliest…not holding breath as it could take a while longer to build itself out and confirm or be negated…

  • bist

    Closed my short position and bought a few spy 102 calls and aig $45 call. I'm looking for more longs right now

  • annamall

    Just added more SPY Oct 98 puts.

  • TheMacroEconomist

    SInce 2:30 PM Eastern the institutional “chop up the big order” algos have been buying again. This is their time of day but not their day of week. So some money managers must find this price level attractive.

    They'll stop if the index futures pop, either way, then restart until they are done, or it's 3:30. If they really are done it will be interesting to see if the price sinks back down a bit – or if the slight up momentum caught the short term traders fancies.

  • annamall

    now I hope! 🙂

  • http://trading-to-win.com/ DavidDT

    did you say what I thoguth you said? “hope”? oh-ho

  • BigHouse(Aka Mr Vix)

    Joe Granville on CNBC.He is super bullish lol

  • molecool

    I think we might see a pop here shortly – be patient…

  • TheMacroEconomist

    I got a present for you Anna. 🙂

    http://bloomberg.econoday.com/byshoweventfull.a

  • springheel_jack

    We're going to have to move up sharply from here to get another doji today. I wonder if we will.

  • Iguanadon

    Oh no, I'm on the flip side of an Anna trade… what are the odds that I'm in the right. I peg it at 1 in a 100.

  • wex

    which time frames work best for you?

  • http://trading-to-win.com/ DavidDT

    on fractals best fit is daily-hourly-15/10min
    weekly versus lower timeframe has to be selected every time based on speed of move

  • http://trading-to-win.com/ DavidDT

    unless he mentioned “13 ghosts” – it means nothing
    Jeff and Kevin are often right…like 10% of the time

  • PRSGuitars

    Here's my $UVOL (green) with a comparison to $DVOL (red, same chart) and $SPX (below, cyan line).

    http://screencast.com/t/q8l6mdjfae1

    What's the deal? Can $DVOL move in a parabolic fashion like this normally? If this were a simple market — two participants actually buying (one) and selling (one) amidst the rest of the market — then I could understand the seller needing to fill his sell book (hence the rapid selling followed by continuous, but at a decreasing rate, selling), however, how does the entire market follow selling patterns like this?

    Is it simply that the aggregate sellers (in my example, the 'one' big seller) are wearing out of their bearish bias for the day when SPX goes flat as the increasing sell volume (again, but at a decreasing RATE over the course of the day) fails to push SPX lower?

  • fuw

    Dollar in the move again it seems….

  • BigHouse(Aka Mr Vix)

    Come on take this down to the lows of the day..Just for once…Sellllll Selllll

  • http://trading-to-win.com/ DavidDT

    CN_BS_see just explained market move up by new Gobelment program – “toilet paper for shitters”
    [AKA toilet bowls – not to be confused with people who can only shit under themselves while bankers shit on their heads]

  • annamall

    I see that! I am looking for 1008 area today. 🙂

  • BigHouse(Aka Mr Vix)

    If we make it to the lows today i will buy all the ladies here this gift lol

    http://screencast.com/t/Z1sQyKO8QC

  • annamall

    LOL I am good, I was a point early, but no worries here! 🙂

  • http://www.mylifemytrade.com MyLifeMyTrade

    Closed 75% positions over the course of the day … in cash now..

  • annamall

    thanks Mac! 🙂

  • annamall

    just an oxymoron! LOL

  • steveo77

    Anna, I have a credit spread on WAT and it has moved in my favor. Any suggested strategy by which I could make sure this doesnt turn into a losing trade, and yet still profit from anticipated theta burn for September. Big thanks.

    i.e. can I add a third option. Thanks.
    http://screencast.com/t/kQcUw9velVMM

  • TheMacroEconomist

    No it's likely those institutional algos I was mentioning. They chop up big orders into 100 and 500 share lots and feed them in to match the order flow to get a good price. This creates a nice price dance with the HFTs (the automated market makers) resulting in those patterns you see.

    Entire market follows this because there is nothing else directional to follow for most of today. 😉

    Incidentally those buy algos wrapped it up at the stroke of 3PM – and SPY snapped back a bit.

  • BigHouse(Aka Mr Vix)

    Thats a big dump

  • http://trading-to-win.com/ DavidDT

    may be I will feel sorry for dumping 1/2 aig puts

  • http://trading-to-win.com/ DavidDT

    it is interesting – I just got an urge to get on cash (for no reason really) and go to Bermuda for few days

  • http://trading-to-win.com/ DavidDT

    hmm.. I think THESE ladies may afford the real one

  • http://www.mylifemytrade.com MyLifeMyTrade

    Short silver from 14.92

  • Keirsten

    Does that come with a Chanel bag?

  • grednfer

    Signs are looking good….SPX under 1018 barely and vix over 26.16

    This could be the start of the BIG one!
    They've been selling rallies all day

    This is so exciting! Like Chula Vista Up to bat!

  • Duuuuuude

    IMO, I will remain bearish on the dollar till we break out above the 50 week MA. Until then, I am looking for one more touch at 76. http://screencast.com/t/08Y2MCTpC5Ot

  • TheMacroEconomist

    LOL

  • http://esecfutures.com Vladz

    To protect his identity, Mole hacked slope http://screencast.com/t/b4z9YX7vSp

  • BigHouse(Aka Mr Vix)

    We need to see some more juice in the maket to get this down somemore by day end. If not, it's just going to chop around here.Grrrrrrr

  • annamall

    Here's to my instinct being right! LOL

  • onorio

    Short SPY @ 1017.5

  • springheel_jack

    Well that could have been a headfake up followed by the start of the real move down or….

    a headfake up followed by another headfake down preceding the real move up!

    Unless this is a headfake of course.

  • Anonymous

    test

  • http://trading-to-win.com/ DavidDT

    if TK posted Mole's pic without Mole's explicit content – Mole has all rights to be pissed off

  • St Deluise

    agree …psyche!

  • annamall

    ROTFLMAO… now that' s new one I haven't see yet! 😀

  • http://alphahorn.blogspot.com/ alphahorn

    just a little historical reminder. the first week of P1 amounted to roughly a 64 point pullback in the SPX, around 4%

  • annamall

    You dumped them all! Y???

  • Perak

    That's too many faking heads for me!

  • bdf72

    Anna…I am probably wrong but they maybe trying to hold the gains they have today and per Mole/ZH post bring this thing down in Sept if they are absorbing some buy's.

  • Keirsten

    Just looking for that close under 1018 and we're golden.

  • annamall

    You mean a headfake of a headfake? LOl

  • springheel_jack

    Oil tried & failed to retake $70 today. Currently at $69.57.

    If we do correct, TK is right that commodities are likely to lead the way down.

    Difficult to see how UNG can fall much further but it always seems to surprise to the downside somehow.

  • springheel_jack

    This is some grim tape.

  • shortcover

    well, it can't go to zero as the asset has some value?? but maybe there will be mahem if there is some lawsuit or they opt to close the ETF? that may cause some sort of disconnect on UNG…bizzaro world on that one…

  • PRSGuitars

    Absolutely — i watch the time pivots too. The algo chopping seems legit, I guess I'm just curious how the DVOL pressure increases but SPX stays flat — seems like a fade the bears signal, however, it seems like the disparity between up and down volume is so massive it's worth keeping on the bear side of the boat…

    Haha, im just confused. Thanks for the reply.

  • anthem

    Unfortunately its at 1017.50, with no real participation and 20 minutes to go. .. Probably easy to manipulate right now. .

  • springheel_jack

    or a headfake of a headfake of a headfake perhaps.

    Freaky tape today Anna.

    Did you short EURUSD from 143.50? Only went slightly above. Nice call.

  • anthem

    We need a couple Shanghai style pullbacks. Haven't they seen like 3 5%+ pullbacks in the last 3 weeks ??

  • springheel_jack

    I'll certainly be a strong buyer at zero if it gets there!

    Don't know what's going to happen with the commodity ETFs if position caps go through as discussed at the moment.

  • Keirsten

    It's looking like it right now, Anthem. Just watching for now…

  • springheel_jack

    Kind of uncertain today.

  • MJSgl

    Test

  • cramar

    I vote we go up tomorrow. Maybe big.

  • springheel_jack

    If SPX makes it past 1020, we could see a significant spike past.

    Might get that doji close yet.

  • http://www.genxantihero.blogspot.com LostIllini

    I just skipped the middleman and got honey a washing machine and a romance novel.

  • annamall

    Looks that way, I really didn't expect the big move till after holiday, the volume can be jacked either way. When September comes in then we should see the volume pick up, but I would like as Keirsten to be under 1018 today. 🙂

  • Trader_Steve

    It appears that “team manipulation” knows what you want and its implications. When this fails, in Jolly “OLD” England they'd rightly put Bernanke's and Geithner's heads on pikes!

    Steve

  • annamall

    you remembered! good memory! A little above that I thought they may shove it to 1.4370 I went in again @ 1.4358.

  • annamall

    The volume candles look @ pinheads! LOL

  • TheMacroEconomist

    I'm thinking they park SPY / SPX near the open. Right near 1020 or just over.

  • annamall

    Here comes the PPT, sumbitch!

  • grednfer

    Its tough……its being managed…..what a bunch of weinies

  • Keirsten

    Yep, they battled that line pretty hard and heavy awhile ago. I'm going to stop posting my wants and needs on here from now on.

  • isaiah64v4

    MJSgl
    I am using Fire Fox and I have had no problems at all. What kind of troubles are you having?

  • annamall

    use Google Chrome!!

  • shortcover

    laffable close…now it's just downright hilarious…

  • Iguanadon

    I want it noted that on August 31, 2009, Iggy went head to head with Anna and came out on the winning side. The reason I even bother typing this is because it's the one and only time it has happened or likely will ever again. 🙂

    Actually I'm just playing the long side based on Fuji's analysis matches up with mine for one last runup and I decided to run with it.

    You know I luv ya Princess.

  • annamall

    I am happy for you Iggy, but only because I still had an awesome day. :))))

  • http://trading-to-win.com/ DavidDT

    FF 3.5 no problems here

  • PRSGuitars

    Wow. Tagged 1021.5, now at 1018.5. 3 points in 90 seconds.

  • annamall

    Me too K! it's like they knew you and I were shopping online together and they knew that we felt comfortable the tape would go down. NOT.

  • http://trading-to-win.com/ DavidDT

    1/2 – half

  • TheMacroEconomist

    Honestly I was thinking 1020-1021 on SPX as far back as 3:30 – because this trade today was so uninspired.

    Watch ES pull back now after that silly stretch…

  • springheel_jack

    Spot on.

    Feels like a gap down tomorrow though.

  • MJSgl

    Post something and the “just a moment” message comes up and never goes away…perpetually stays there, never posts.

  • springheel_jack

    Nice.

  • MJSgl

    No way – I have my FF tricked out perfectly, just how I like it! Can't imagine going to a different browser.

  • springheel_jack

    Well, I had a good day and closed at my HOD.

    Feels like a gap down tomorrow to me.

  • BigHouse(Aka Mr Vix)

    Why is RIMM up 1.00 AH

  • shortcover

    i was thinking we tag 1020 but then close at lows of day – with a fast 5 or 6 s&P pt scoot at the close to dumbfound the dumb money. guess not…

  • AS2009

    Does anyone else see the inv H&S on SPY – neclkine 1019.75 … we broke on SPX and trading ended … tgt 1024 … and 103 on SPY ..

    Springheel – why are you thinking gap down tomm ?

    Mole – Disqus is now forcing to login to post a comment, everytime you refresh your screen – very irritating !!

  • annamall

    I knew is was wishful thinking to want 1008, but i still think we will be there very soon, and very comfortable picking up more spy puts on any bounce! :))

  • http://trading-to-win.com/ DavidDT

    great day, no plans change, looks like w2 up (of vae down) started
    welcome to correction on daily (if 1035 will not be retaken)
    http://screencast.com/t/nw0ZrAkMIARi

  • http://www.mylifemytrade.com MyLifeMyTrade

    because I *thought* of going long RIMM and DID NOT take the trade. If I took the trade, then it would be DOWN $1 – LOL

  • AS2009

    Funny – that happens to me a lot too 🙂

  • TheMacroEconomist

    Go to http://disqus.com and log in there. That should set your Disqus cookie right. Then come back here and you should stay logged in.

    Tomorrow on NYSE depends on what happens tonight in Hong Kong, IMO. 😉

  • de3600

    earnings leak worst than expected should be up 10 in the am 🙂

  • isaiah64v4

    And I thought this sort of stuff only happens to me. Go figure…

  • 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„¸

  • molecool

    Really sorry about these problems – if they persist I'll simply switch over to WordPress comments. I've had it with this crap.

  • BigHouse(Aka Mr Vix)

    I cant find any news .This is nuts

  • springheel_jack

    Just a feeling. Not enough that I'm holding shorts overnight.

    Bull side was surprisingly weak today.

  • springheel_jack

    I'm always wary of the 1 min patterns. We had a triangle today that morphed into a bull wedge and then just sort of wiggled about.

    The solution to your Disqus problem is to log in at Disqus directly. I had the same problem a few days ago & solved it that way.

  • bist

    It's definitely a possibility SPY could be bear flagging before the next drop. But I'm wondering how steep that drop will be and whether they'll be able to fill that gap on a pomo day…

  • TheCrowe

    I dug this up for you. Hope it helps.
    “Credit Suisse shuffles ratings in smartphone market
    After the market close, Credit Suisse upgraded shares of Motorola (MOT) and Research in Motion (RIMM) to Outperform from Neutral, and downgraded Qualcomm (QCOM) to Neutral from Outperform as well as Nokia (NOK) to Underperform from Outperform. The firm kept an Outperform rating on Palm (PALM). :theflyonthewall “

    That's all I got.
    Richard

  • http://colechambers.com Cole Chambers

    The new disqus theme looks great man.

  • springheel_jack

    I'm still expecting more upside before a serious correction. If it gaps lower, I'll go long I think.

  • http://colechambers.com Cole Chambers

    I'm using FF 3.5 and not having any issues, try refreshing your browser.

  • zeusmith1

    I think my next big play will be loading up on VIX Feb 2010 or March 2010 35 calls

  • http://colechambers.com cc

    The new disqus theme looks great man.

  • http://channelsandpatterns.blogspot.com/ springheel_jack

    I'm still expecting more upside before a serious correction. If it gaps lower, I'll go long I think.

  • http://colechambers.com cc

    I'm using FF 3.5 and not having any issues, try refreshing your browser.