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Squeeze-A-Licious
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Squeeze-A-Licious

by The MoleAugust 19, 2014

The squeeze continues on all fronts and we are either at the cusp of some major move in both forex and equities or we are at the end of a beautiful run. And if it’s the former it has to happen today before the close. No, we can’t have it both ways, so let me elaborate.

The E-Mini has made a phenomenal recovery since those 1890 lows – we’re talking nearly 90 handles in eight sessions. If you were caught short near the bottom you just got your ass handed to you. I trust none of your rats were that stupid – if you were then you didn’t pay attention.

The situation we’re facing now is an interesting one. This has massive short squeeze written all over it as we’re but handles away from the old ‘not so fast’ zone delineated by ES 1980. And if it was any other week I’d say we’ll probably paint an obligatory red candle and then take the bears to the woodshed.

However, this isn’t an ordinary week – starting tomorrow we are graced once again by this month’s FOMC minutes – the good ole’ Yeller is so reliable. But expect price volatility to (as measured by for instance ATR) come to a screeching halt as the global cabal of banksters hold their annual conference at Jackson Hole.

I actually was invited but decided to abstain for – ahem – personal reasons. Anyway, as usual the tape will most likely start freezing up starting tomorrow, which also means I won’t be doing much on the trading side. So let’s review some of our recent gems – there’s a good chance that at least one of them is going to hit their stop once things start swinging widely.

You all recall (and some hopefully enjoy) the NQ trade we’ve been holding since 3917. Fortunately I am not employing CrazyIvan campaign management as I suspected that this one may turn into a squeeze and cheated by switching to Heisenberg style campaign. Otherwise I would have technically been forced to close out yesterday as it touched 3R (almost exactly). And there is still a chance that it’ll run much higher – the ES is at 1981 as I’m typing this and we still have 90 minutes to go go go go!!

Now on the currency side you may have long forgotten about that LT campaign on the Dollar. That sucker has banked me almost 5R by now – it’s been one of the best setups of the year. As some of you may recall – that has been a Heisenberg style campaign from the get-go. There was a very low probability it would get above 80 and when it did a lot of Dollar shorts starting running for the exits. I’m holding this one and my stop has been advanced now to 25% trailing.

Now the EUR/USD is looking extremely sweet to this lowly expat – in a way I am perpetually short the EUR as I earn in Dollars and live in Europe. Which is why I hedged myself near LT support (see yesterday’s post) and was happy to be stopped out today. However, it may not last – for the same reasons outlined above. Either this thing drops now – today – or most likely the rumor mill will take over and punish the early shorts. Right now I don’t have a dog in this fight but I hope that it’ll drop a few more pips before things start slowing down.

For the reminder of the week I may mix things up a little to keep you guys entertained. I always considering to post a little series on cognitive biases – what do you think? It’s something most of you have probably come across but it bodes repeating as we humans are unfortunately so easily corruptible. Or perhaps fortunately? 😉

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

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://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    and then there’s that Ebola thing.

    COGNITIVE BIASES

    Framing

    • An unusual disease is expected to kill 600 people. Two

    alternative programs to combat the disease have been

    proposed.

    A. If Program A is adopted, 200 people will be saved.

    B. If Program B is adopted, there is a 1/3 chance that all
    600 people will be saved and a 2/3 chance that nobody
    will be saved.

    C. If Program C is adopted, 400 people will die.

    D. If Program D is adopted, there is a 1/3 chance that

    nobody will die and a 2/3 chance that all 600 people will

    die.

    • What would you do?

    {Answer Tomorrow}

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    if there is a Squeezy time, I’d like to see a day or two of it, to finish off the first T.
    remember, Time. not price

    http://s29.postimg.org/ywn18l713/squeezy.png

  • BobbyLow

    Cognitive Biases sounds good.

    BTW, I was looking for a reason, any reason to close out my NZD/USD Short. And I had mentioned all the Bankster stuff going on this week earlier and then you just mentioned it again. So after going through a 75 % retracement and then back down again it was enough. Out +2R – Love that Kiwi. :)

    I might roll the dice tonight on my Short AUD/USD as the AUD has Gov Reserve Speaker Stevens at 7:30 PM tonight. I’m also holding Long USD/JPY.

  • Billabong

    Excellent. 75% retracement? Did it come close to -1R or SL?

  • http://evilspeculator.com molecool

    I would get in the car and get the fuck out of town.

  • http://evilspeculator.com molecool

    I guess we have come as far as we’ll go this week.

  • BobbyLow

    Thanks.

    It never came close to stopping out. I went short on Sunday night at 8479 and I had a substantial gain on it from early last night down to 8425 so I set a pretty wide stop. Then between 9 PM last night and 9 AM today it climbed all the way back up to 8465. Then she fell again and I closed it at 8420.

    I think it might have more to go and I might jump in again. Or I’ll flip – Price will decide all that. :)

    Edit: BTW price has bounced off this price level a couple of times now so this was another reason to close it out.

  • Malcolm O’Mara

    I have absolutely no idea what is going on. Since being
    stopped out of TZA, last week I’m in cash. Unless you positioned near the close on the 14
    it’s been nothing but gaps. I follow the RUT and TNA. On the daily, it’s looking like
    weak sauce. But, I have 0 confidence short or long. I don’t
    mind being wrong..excepting I require myself to have conviction. ,

  • newbfxtrader

    Getting tempted again. Just got spanked on my NQ short couple days ago!

  • Billabong

    That’s the nice thing about following a position closely you eventually have an intuitive feel for it…

  • Billabong

    This is good. Also, at the end when the mosaic of other YouTube selections comes up model Carmen Russell does a TED presentation on image vs reality … she did a nice job from a model’s perspective … 9 min 37 sec

  • Billabong

    For those looking for new reading material that addresses many of the subjects discussed here, you may want to consider Stuart McPhee’s “Trading in a Nutshell”. He is a former Aussie army officer who has a slightly different approach to trading. If you have read all the standard reading material, this is a new author to consider.

    http://www.amazon.com/Trading-Nutshell-Planning-consistently-profitable/dp/0730378152/ref=sr_1_1?s=books&ie=UTF8&qid=undefined&sr=1-1&keywords=stuart+mcPhee%2C+trading+in+a+nutshell

    He has also done a number of interviews and presentations on YouTube. Here is a sample if you want to try him out:

    Here he interviews Mark Cook

    https://www.youtube.com/watch?v=K4d6LmNDVFY

    Here he does a short presentation on emotions in trading (11 min)

    https://www.youtube.com/watch?v=IUm0jePHU50

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    tempted?!
    just look at the february/March slide higher on that 6.6 Keltner line.
    could be days..
    that, and a cold shower.
    😉

    http://stockcharts.com/h-sc/ui?s=QQQ&p=D&yr=0&mn=8&dy=0&id=p17709996887

  • newbfxtrader

    Jackson hole will make the decision.

  • Scott Phillips

    NZDUSD triggered while I was on a plane back from Sydney, missed it and was a great setup

  • Jake_38

    Are we there yet ???
    http://tos.mx/UHEWjX

  • phylum

    “–New Zealand’s economic fortunes took a bizarre turn last night. The plot was straight out of the movie series Terminator. Keep in mind about a quarter of NZ’s exports are dairy products…

    –At 10:33 New York time, news site Bloomberg released the headline ‘WHOLE MILK POWDER PRICES FALL 11.5%’. Algorithms designed to read headlines and trade them faster than humans instantly did their damage. Currency markets went bananas as the New Zealand dollar tanked.

    –Luckily for the Kiwis, there are still a few real people around in trading pits. Unlike computer algorithms, these traders have an appreciation for human error. It turned out that Bloomberg released last month’s result again instead of the new data. The human traders recognised this about the same time as the algorithms finished driving down the Kiwi dollar. And so the human traders jumped in. They cleaned up while Bloomberg corrected the headline. The algorithms had to reverse their position, making the Kiwi surge back in the opposite direction.

    –Huzzah! Man over the machine.”

  • Scott Phillips

    Agree

  • Scott Phillips

    It’s a great story but it’s not what happened. It broke short, never looked back, never reversed

  • http://www.ProfitFromPatterns.com/ Ivan K

    One simple tactic that has worked for some of my students … to break the emotional attachment to money, more specifically to the capital they intend to put at risk, is … to convert into cash one half of their intended trading capital … and to carry it around on their person … for 2 or 3 months.

    Attachment to the outcome can be achieved by creating your own RBT … and then to do, what I call ‘Warm Up Laps”, … for at least 200 campaigns … complete with all the associated paperwork … account reconciliations … Equity Charts, Distribution Charts, and various stats … plus daily and weekly self-critique of the actions.

    In the case of intra-day campaigns … where the person spends many hours a day at the helm … a simple recording of their actions at the screen /s … by way of movie screen capture software … allows them to relive what they did. Naturally the associated paperwork also needs to be attended to.

    All this is done before risking any trading capital in the markets … after all, risk taking is a serious endeavour … deserving of serious effort!

  • http://evilspeculator.com molecool

    Quiet here!

  • phylum

    When?

  • http://evilspeculator.com molecool

    I guess I just take the week off then! 😉

  • http://evilspeculator.com molecool

    “and to carry it around on their person”

    LOL – it shows that you lived on a remote island for too long. GUYS – do NOT do this if you live in any major North American city!

    Instead, put it into an envelope and send it to me instead. I will make sure that it is properly ‘handled’ (ahem)…

  • Scott Phillips

    I thought exactly the same thing! That guy clutching his bag in a death grip is gonna be a magnet for people like me 😉

  • http://evilspeculator.com molecool

    Oh guys – most importantly: Whatever you do – stay the fuck out of Brisbane!

  • Scott Phillips

    HA!

  • Scott Phillips

    In my opinion there is a place for all that stuff in the early stages, backtesting a rbt to nail down the details. But paper trading can only take you so far, since mistakes are often caused by the feelings that trading brings up (or more accurately an unwillingness to feel those feelings). Especially with FX, where leverage is so large you can risk $10 on a trade without any problems, there is no reason not to fund an account with a very small amount of money and trade at microscopic size.

    When I learned Gabriel Grammatidis’s systems, I paper traded for 1 month, then started trading for $50 R value, and gradually increased size every time I went a mistake free period. This worked quite well for me, and I can recommend that approach

  • http://evilspeculator.com molecool

    Have you tried beating them with sticks? Same results and it’s entertaining…

  • phylum

    Nothin’ wrong with it … great place mate!

    https://www.youtube.com/watch?v=C9C9Q478PCQ

  • Billabong

    “… break the emotional attachment to money…” Money or better yet currency, is a powerful force. People tend to be civil until backed into a corner or you try to take their money/currency away. The casinos try to do that with some success by converting the currency into chips. As mentioned by others, not sure about the walking around with cash business … as soon as the word was out, you would be dead here.

    “risk taking is a serious endeavour … deserving of serious effort!” … a priceless quote.

  • Kidd Cudi

    c and a are the same. b and d are the same. odds* result gives each option the same expected value, but since if it was my job to make this decision, I would probably get fired if all 600 people died, I would suggest option a or c. If I was an adviser to the guy making the decision I would suggest b/d, because if it works I look like a genius, and if it fails I wasn’t the guy who made the decision.

  • Ronebadger

    Hold The Line?

  • BobbyLow

    Totally agree. I back test everything over multiple time frames and believe that this is one of the major components of a RBT.

    However, one of the issues I had was that I easily traded perfectly on paper. But when put into practice with real money, needless to say it became more challenging because of real time speed and as Ivan mentioned “the emotional attachment to money”.

    I was also afflicted with whipped dog syndrome or I should say whipped bear syndrome and was trading with scared money so I had a double whammy.

    You witnessed first hand what I went through and were an enormous help in getting me on the correct path. :)

    BTW, I’m finally able to work with increased size (and of course, size is a relative term) without fear. As you know, trading without fear does not mean being reckless. It means having enough confidence and belief in my system that the probabilities will be in my favor over time.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Copper..

  • Billabong

    nice move…

  • ridingwaves

    PTX-just acquired another drug, 10 yr exclusive..based on below, should be worth $25-30 pps valuation in bio world…of course buying it yesterday would have been better..any drawdown would be less pain of Ivan’s student posted a couple days ago…Great management…will buy on any pullbacks…

    With the addition of Treximet Pernix estimates FY 2014 revenue to be in the range of $110 million to $120 million with Adjusted EBITDA of $22 million to $24 million. Pernix estimates FY 2015 revenue will be approximately $230 million with Adjusted EBITDA of approximately $95 million.

  • http://evilspeculator.com molecool

    Useless really – a company and it stock are two completely separate entities. People have lost fortunes trying to connect the two [successfully]. Especially bio/drug company related stuff – they fly high and crash with any spurious rumor or headline. It’s a running target at best and a sucker’s game at worst. Stick with technical trading or throw your money into the lottery pool that’s fundamental ‘analysis’.

  • ridingwaves

    that picture above of Hilary is darn right scary and I too will join Mole in another country if she is elected…

  • Skynard

    Attemting full short position, WTF!

  • ridingwaves

    actually what you say is true but PTX is a small float, insider owned gem…management and product is always a defining part of bio, these guys have been successful in other endeavors…its not a day trade, it’s a valuation hold..lets make a bet-I say it will hit 20 within 12 months. If it doesn’t I will send you a bottle of wine from a really good sonoma winery…

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Word.

    I learned that with Krispy. People went nuts over them, company went bust.
    Luckily, I was too dumb, and too poor to be involved.

    http://www.coolberryyogurt.com/images/donutlg.jpeg

  • Skynard

    Nice move on /CC with a squeeze today:)

  • ridingwaves

    that’s a bad example…all hype and definitely no comparison…you can do better

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I can’t trash that. Bio will take a foothold, and profit the shrewd.

    http://www.aberdeeninvestment.com/wp-content/uploads/2012/04/Waves-of-Innovation-4-5-12.png

    I prefer Red.
    😉

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    you certainly are quick on the draw!
    perhaps waiting for 2 consecutive red candles?

    http://s23.postimg.org/6aao69jkb/quick_draw.png

  • Skynard

    Here we go RATS:)

  • http://evilspeculator.com molecool

    Jeezz – does he ever learn? LOL

  • http://evilspeculator.com molecool

    Company still exists: http://www.krispykreme.com/around-the-world

    Only location in Europe is in (drum rolls) Russia!? WTF! So the Ruskies get awesome doughnuts while I strike out here in Spain. Not fair!

  • http://evilspeculator.com molecool

    Well, you’ve been around since the 1st wave – respect!

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Ronebadger

    gonna have to roll your own

  • BobbyLow

    I have a very tight stop on my Long USD/JPY position and if it doesn’t stop out, I’ve set an alarm clock for 1:45 PM EDT so I can close it out prior to the release of the FOMC Minutes at 2 PM. I’m sitting on 1.85 R on this one and a “Bird in Hand” and all that rot. It might not do anything at 2 PM or it might go up another R or 2 or it might wipe out all existing profit and then some. I have no idea and there’s too much luck involved so I’ll be out.

    I got stopped on my Short AUD/USD for a little better than BE this morning. Still holding a short position in Gold and that will probably be it while the Banksters have their Orgy in Jackson Hole for the remainder of this week.

  • http://evilspeculator.com molecool

    A’ight – beam him right into sickbay and don’t skimp on the Klingon blood leeches.

  • http://evilspeculator.com molecool

    OR you could have just picked the ‘slow and steady’ approach and be long NQ/DX etc.. You ‘are’ a sub, right?

  • ridingwaves

    2009 Yellen-exiting prematurely would be bad…expect no change

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Bah. Put in some bids for puts, up so high only Goldman would sell them to you.
    on the (intraday) reverse down, you’re delta neutral.
    just be sure to sell those puts before the greeks fade.

  • http://www.ProfitFromPatterns.com/ Ivan K

    5 minute chart of the Kiwi below …

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    dang! I just saw a false print down to 1977 on the Spoos.

  • Skynard

    Or good timing, ZL is showing a div on both plates.

  • BobbyLow

    Delta Neutral? LMAO All delta neutral has ever done for me is to make sure that I don’t make or lose any money. And if I’m not going to make any money then why be in the markets at all?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Then go BIG gran-pa. 1.85R? – is shit on a shingle.
    You’re looking for 4R.
    Go BIG or GO HOME.
    :-)

  • BobbyLow

    LOL

    Yeah baby, put it all on Red or Black for a biiiiiig win!

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I respect the ZL.
    the GBP/JPY hasn’t been leading to the down side…..yet.
    in fact, last night looks like a front run to current level.

    http://s30.postimg.org/4t809p01t/Aug20.png

  • BobbyLow

    What slow and steady is to one person is kind of like what “beauty is in the eye of the beholder” to another. Slow and steady is trading Forex to me even though my long term in Forex is anything more than a day or two. OTOH, I now trade Gold and Oil off of the daily and a trade that lasts a few weeks would be great because it has to be making money in order for it to last that long. I guess I could also consider this to be slow and steady as well.

    I’ve traded Equity Futures before and might do it again but not right now. I love what I’m doing and have finally become reasonably consistent and don’t want to do anything to fuck that up. :)

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    don’t want to do anything to fuck that up
    human reason. The Market will fix that. or so I’ve read.
    great systems last for a run, and *Poof*.

  • BobbyLow

    I disagree. On most occasions expecting any kind of result based on what any politician might say or do, or projecting my trading results of any potential threat of war or skirmishes of any kind have been disastrous to my financial well being.

    Also with Forex, I sincerely believe as I’ve said before that these currency pairs are like my two cats who chase each other from one end of the house to the other and then reverse. Well, it’s the same with these currencies chasing each other from one value to another and then reversing.

    As to what the FOMC minutes say, I really don’t care. Whether or not a currency spikes or stays flat doesn’t matter based on computers shaking things up because in 3 or for candles, it’ll all be forgotten. I just don’t want to set a 100 Pip stop just for the sake of staying in the trade. You know the old saying that in trading there’s always another train leaving the station? Well in Forex there’s a much, much larger schedule of departures. :)

  • http://evilspeculator.com molecool

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    ¨°º¤ø„¸F R E S H „ø¤º°¨

    ¸„ø¤º°¨ M E A T“°º¤ø„¸

    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • http://evilspeculator.com molecool

    “All delta neutral has ever done for me is to make sure that I don’t make or lose any money.”

    And that would be a BAD thing in your case? 😉

  • BobbyLow

    And as Scott says, in terms of the type of volatility ” a single system is not going to work in every type of market”. However, perhaps if I know what to expect with my system under different sets of market conditions there are no surprises and I can deal with it accordingly.

  • http://evilspeculator.com molecool

    See my next post 😉

  • Billabong

    Yes. yes, yes … then you’ll know which ones to stay away from and not force a trade.