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Surprise!
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Surprise!

by The MoleMay 18, 2009

UPDATE 10:17am EDT: Of course we got our traditional early morning gap. I have completely dropped my caffeine habit in exchange of valium by now as this is enough of an ergogenic effect for me.

I have changed my mind a little bit on the inflection point for Soylent Green – pushing it to 905 as I should give Soylent Blue a bit more leeway.

Could this be a break of that bearish wedge? I’m not falling for that little Gold tease just yet though – let’s wait for a retest which we usually get. Going short here right after a 20 point drop is usually bad medicine.

UPDATE 11:11am EDT: Here are the hourly ES short RLs for you:

Click on the image to get to the actual calculator.

UPDATE 11:25am EDT: Call me crazy but I actually reloaded my SPY/QQQQ bear debit spreads here as there is little additional risk until we breach 905.

UPDATE 12:18pm EDT: Just returned from breakfast and am surprised to still see the tape so high frankly. Let’s remember that the Monday after OPEX is the busiest day of the cycle, so seeing so little participation in combination with a gap/spike up smells like a rat to me. Good chance those Red bull sucking GS XBox addicts are trying to paint the tape. I don’t like it how we have consolidated sideways in the past 45 minuts – I expect a test of 905 shortly.

Let’s see if this one is for real. A breach of the Friday highs would be a first precursor of higher tape to come. Breadth on the SPX is currently 3.5:1 advancing. BTW, we just touched the Friday high on the Cubes.


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.
  • annamall

    Hey Mole thanks for the update, more shorting opportunities for Blue. :-)

  • http://jadedapprentice.com JadedApprentice

    Selling long positions into this gap up – glad I sold a bit of FAZ and SRS on Friday – will be able to buy back very cheap

  • Anonymous

    gooo

  • Count_de_Monee

    Well my buddy just confirmed that GS sent out a load of bullish comments this AM (GMT) to many european banks basically stating that it's a great time to buy (lol). This may be the last pump before the dump IMO.

  • alphahorn

    looks like 904 as the turn

  • Terrapin

    The gold chart shows an inverted H&S pattern. So the question is, which is going to win out, the bearish wedge or the inverted H&S?

  • Fujisan

    I'm going to hedge my position if Friday's high of 33.82 is taken out (which is coming up). My Qs consolidation target is 34.09.

  • Squidman

    Sure came fast on no volume.

  • alphahorn

    added to my FAS scalp, also long URE at 3.41 and UNG @ 16.24

  • LostIllini

    It seems that there is a very strong connection between dollar strength and equities, although I expect this to decouple sometime in the future right now the ratio seems to be 1 to 1. UUP is the ETF that is US Dollar up, please find below the Daily chart for it (seems very Bullish which is very Bearish for equities) shorter term it doesn't look as good though.

    http://screencast.com/t/zVzGTnHnxh

  • Osso

    If HD tomorrow has something similar or even better, than LOW today…..its going to be a wonder of a short squeeze….

  • molecool

    Remember rats: you buy a M33/31C debit spread (33 is the short side, 31 the long side).

  • molecool

    You KNOW it – LOL :-)

  • BalaB

    Strange Morning.
    Very bi-polar

  • molecool

    It's been an inverse correlation lately, mate.

  • http://www.OptionsVista.com 1option

    Taking a position here in Coke. What are your guys' thoughts?
    http://www.optionsvista.com/1option/129-coca-co
    Thanks!

  • LostIllini

    meant inverse correlation, thank you for correcting me.

  • Keirsten

    Didn't I mention that last night? LOL I scalped to hedge, but done now. Something doesn't pass the smell test to me for some reason yet today.

  • rhae

    could happen or the sympathy bump today

  • Keirsten

    Indeed Count- when Dick Bove starts pushing banks it's probably a good sign to run for the hills. He was pushing them back in May '08 too, and look what happened next.

  • annamall

    Hi sistah, I finally got what you were talking about your Big Boy was carrying around! LOL

  • Squidman

    NQ setup looks sweet right now?

  • alphahorn

    personally never touch the stuff, makes too many traders too bold and daring

  • BalaB

    hmmmm….I don't think so. I see a divergence on every single chart time frame.
    Your guess is as good as mine.

    Gonna walk the dog.

  • ropey

    Also when the little bank clique start upgrading each other, something doesn't smell right either. Upgrade of BAC? C'mon….C upgrading GS suddenly….smells like they know what's coming and want out…

  • BalaB

    SPX at a plausible go short level. But since I've seen more participation at a Briss, I think I'll sit it out.

  • annamall

    Yes, the dollar goes down equities go up and vice Versa.

  • annamall

    Hi Fuji-san :-) hope you had a nice weekend in Cali!

  • Keirsten

    Agreed Sistah. I scalped to hedge my shorts this morning on oil, but I'm not playing again 'til later methinks. It's like the whole thing is in slow motion today.

  • annamall

    Adding to GS put spread.

  • annamall

    Good job! :-)

  • alphahorn

    plenty of resistance here at 898 between the trendline and the 38% fib, but something tells me it wants that 50% retracement at 904

    http://www.screencast.com/users/alphahorn/folde

  • Keirsten

    Inna if you're out there- I'm not taking the trades on those we discussed last night either. Just not feelin' it here today.

  • onorio

    I`ll take the blue pill….

    Added more shorts here, i will close all shorts on green light.

  • http://www.aggressivelyuninformed.com nepharis

    LOL

  • BalaB

    You Did…You Did Indeed! LOL

  • Keirsten

    Looks like some of the Indian stocks are about to roll over now…. TTM, INFY, etc.

  • molecool

    The brave shall inherit the earth.

  • molecool

    1. Please don't trade the news.
    2. Check out the ATR on this sucker – it's a piddly 2% – you're going to waste your money on that?

  • Fujisan

    Thanks, Anna. I had a great time but I am feeling sick. I'm going back to bed after I place my orders.

  • molecool

    American Indian or Indian Indian? 😉

  • molecool

    Let's share the love a little – how about it?

  • Keirsten

    India, you know….. Ta Ta motors, etc. 😛

  • TheHun

    All my longs are posting higher this morning. Opex fake out worked out just as I predicated. POT, XLF, AMZN and AAPL moving in the exact opposite direction of my Nemesis' trades (he will not be named). And the story goes on …

  • PRSGuitars

    Yawn — now the fake Atilla is posting on other boards. Great.

  • ZigZag

    Our buddy is saying something fishy is going on…This has to be a down week. :-)

  • Keirsten

    Thanks Ziggy- haven't check up on that this since Friday. 😉

  • C.C. Rider

    Or be vanquished and pillaged! Neely is calling for a frenetic final push over the next week or two. Target just under SPX 1000. VIX looks accomodative, no fear.

  • rhae

    S&P 500 120m for us people that are a little slow :-)

    I have no problem adding mole lines to my charts, or at least making notes.
    http://screencast.com/t/owjlUE8e

  • BalaB

    STI looks like a short. I'm not gonna take it but just watch.

  • TheHun

    I guess u aren't long like me : ) That is ok, I will buy you a steak dinner with my profits. This is a small one in the ocean . . . . .

  • annamall

    That's what I hear! 😀

  • annamall

    That's what I hear! 😀

  • TheGenius

    hellloooo welcoime

  • PRSGuitars

    I guess not. I also guess you're a guy who makes a Disqus account to impersonate a successful trader instead of spending time in the market. How much does that position pay these days, in this rough economy…?

  • TheGenius
  • annamall

    Feel better my friend!

  • TheGenius

    * STORY
    * PHOTOS
    *

    China’s Stimulus Restores Confidence, Shows Recovery (Update1)
    Share | Email | Print | A A A

    By Eugene Tang

    April 18 (Bloomberg) — China’s 4 trillion yuan ($585 billion) stimulus plan has shown “better-than-expected” results in reviving growth in the world’s third-largest economy and helped restore

    Dow 6000 soon?????

  • TheHun

    Trades posted above is currently paying 5 figures (if I book the profit). Not bad for 4 days : ) cheers and be well!

  • TheGenius

    The stock market keeps going higher

    I AM THE 3RD WISEST HUMAN IN THE WORLD

    I AM THE 3RD WISEST HUMAN IN THE WORLD

  • ZeroPointMind

    He has a target of 950 plus with and entry at 876 with a 849 stop with a 2-4 week time frame then SPX below 400 by year end.

  • ropey

    Look at the volume on this GS up move today its pathetic. They're still likely to take it to 141 first or close it which is frustrating…..that 140 level keeps getting hit as i speak

  • standard_and_poor

    Darn strong retracement (38%) in a few hours, looks very impulsive (5 waves up).

  • tranchefoot

    I hate you COH.

  • TheGenius
  • BalaB

    So Mole,
    Is there a way to only allow access to the site from approved IP addresses or some other security precaution?

  • LostIllini

    added to favorites.

  • innatedc

    Good call Keirsten….I did get in on my AZO call…its up over $2 right now but watching it like a hawk…

  • Count_de_Monee

    Well, since you're all such a nice bunch of rats, I'll post here some quotes from this AM's GS market data points provided by my mole (not you Mole) from behind enemy lines:

    “- Why this is more than a bear market rally. Peter Oppenheimer: (i) The market is up 28% from its lows; many investors believe it is just a bear market rally. We think there is more upside, at least in the short term, as inventory re-stocking and survey data suggest stronger activity data ahead. Our Macro Trading Strategies colleagues have argued that while the market has paid for the recent improvements in the macro data, it has not necessarily paid up for the further progress we expect over the next few months. We find that the market tends to 'front load' future returns in such a way that the strongest part of the typical bull market is during the phase when economic and profit growth is still negative, but the deterioration is slowing. The period, for example, when the ISM goes from its trough towards 50 (still consistent with economic contraction) generally delivers much higher annualised returns than during the phase when the economy starts expanding again and profits grow (annualized performance covering 16 ISM cycles for the US since 1950: (a) Peak to 50: +6.4% (11 months). (b) 50 to trough: +3.1% (8 months). (c) Trough to 50 (4.5 months): +22.5%. (d) 50 to peak: +13.4% (11 months)). The initial move out of bear markets, until the first 10% sell-off, is typically 40-45% and lasts for six months. (ii) Medium-term view: After the initial bull market phase, deleveraging and a slow economic recovery is likely to make the equity market stall at some point later this year or next. (iii) Long-term view: The crucial determinant of long-term returns is actually not the rate of profit growth, or even GDP, but the price at which you buy equities at the outset. Buying when the risk premium is unusually high, as is currently the case, suggests that future returns are likely to be good and significantly above the returns available in cash and bonds.

    – Feedback from meetings with large macro hedge funds & leading mutual funds last week – no predominant consensus view – hedge funds more bearish – bull & bear arguments. Last week our US Portfolio Strategy team held meetings with several large macro hedge funds and leading mutual fund institutions. In general, the hedge fund community expressed more bearish views than real-money investors. However, there is no predominant “consensus” view on either the equity market or the economic outlook. BULLs' views: (a) The market has successfully absorbed $40 billion of new capital over the past week. (b) Cash on the sidelines may flow back into equities. Commentary from the Goldman Sachs CIO Conference Survey indicated that underweight equities and Financials positions may signal future inflows. (c) Melt-up scenario is possible. Several of the more optimistic. Underweight equity allocations may reverse and managers may seek higher beta stocks, propelling the market higher. Clients who hold this view noted that an economic stabilization is still a requirement, but that the tentative signs of stability we have already observed have started to attract reluctant investors back into the market. BEARs' views: (a) Chief Investment Officers expect significant pullback. (b) Green shoots or not, the market has run up too fast and needs to embrace a disappointing 2010 economic outlook.

    -Corporates & insiders sellers of equities. TrimTabs: So far this quarter, the $62.9 billion in new shares companies have sold has been 2.9 times higher than the $21.5 billion in cash takeovers and share repurchases they have announced. Also, insider selling of $3.7 billion has been 9.0 times higher than the $410 million in insider buying. Corporate activity has turned even more bearish recently. So far in May, corporate selling of $40.8 billion has been a whopping 6.5 times higher than the $6.2 billion in corporate buying.

    – The largest weekly inflow into US equity funds since the credit crunch began might have marked the peak of this rally. The Investment Company Institute reports that in the week ended Wednesday, May 6, U.S. equity funds posted an inflow of $9.8 billion, the biggest weekly inflow since the credit crunch began.”

    Enjoy.

  • C.C. Rider

    Latest missive has 1000 target on futures but not in the cash. Factor in Fib turn date on 5/20, plus or minus 4 to 5 trading days, and the sell in May phenomena, and that would be a tremendous shorting op.

  • annamall

    The volume on this rally is pathetic! Me thinks that GS is running the tape :-)

  • TheGenius

    I AM SORRY FOR SPAMMING

    financial crisis has been fixed

    no more recession

    The stock market keeps going higher

    http://www.bloomberg.com/apps/news?pid=20601087&sid=ajgUp7xQIn6c&refer=home

    all it does is go higher

    that why you keep buying google apple ma pot bidu rimm mos

  • yazzer

    only if you get rid of that TheHun impersonator…it's gotta be some kid who has access to his mommy's PC…;-)

  • roncofooddehydrator

    I wish you'd stop posting fake links that redirect elsewhere…

  • GDII

    chart pls. where is the road map? 😀
    i read it as rejected at 900. even if it is a 5 up, i am expecting a pull back to 885-890.

  • ZigZag

    You timed that one to perfection…Nice!

  • onorio

    where were you last week?

  • asetrader

    $CPCI is @ 1.87

  • Keirsten

    If you're sorry for spamming, then how about you just don't do it? Just sayin'…..

  • molecool

    “Opex fake out worked out just as I predicated. “

    SNORT!!! LMAO

  • molecool

    Why? What's the problem?

  • Squidman

    People are supposed to trade on that kind of information? Guess I've been focused on TA too long and not smart enough to follow the big boys. Did they say buy buy buy or not? I just want a fuckin zero signal! NOW would be nice.

  • molecool

    Oh – you think?? 😉

  • http://spnakr007.blogspot.com/ Steve

    hope you will feel better soon…Zinc works for me..

  • Squidman

    I may be paranoid but I swear I can tell a GS tick pattern from a normally distributed tape.

  • malusDiaz

    DON'T FEED THE TROLLS: http://tinyurl.com/25k7gh

    (Mole must have secret-Anti-troll-powahs!)

  • Count_de_Monee

    Boy, you are a tough crowd to please. Give a man a little help and he demands it all.
    The buy buy buy call went out in specific research notes to clients. What I have posted is what they send out internally to the different departments every morning.

  • innatedc

    Stepping out to play some tennis…..be back for this afternoon's fireworks (if there are any)…hold the fort down rats….;)

  • malusDiaz

    Waiting for those Quants to devour one another;

  • lester

    I swore I was not gonna post anymore but dammit AAPL just jumped 1.5 pts in 5 minutes. I am pissed as I have June Puts. No need to take pot shots at me as I do not have a frickin clue…

  • shotskyhigh

    Hi all…..pardon the newbie question, but can you trade ES with Fidelity? If so, what is the front month symbol?

  • molecool

    Call your broker, mate. ESM9

  • BalaB

    Just thinking out loud.
    A friend was telling me this wknd how the major firms monitor blogs and what not.

  • SuperBowlShuffle

    Morning fellow subway-dwelling trash-feeding rat minions . Held my POT trade through the weekend and am now up 3.30% (as opposed to being down 2.60%).

    Thinking of closing out my position as this tape looks finicky based on my indicators.

  • mrclam

    Hope you feel better Fuji!

  • Squidman

    So isn't that really confirmation of what we both suspect? Different messages, talking out both sides of their mouthes. Sorry to be so demanding–very much appreciate the intel.

  • annamall

    The only people buying GS is GS's

  • http://zstock7.com/ zstock

    Was watching to see if QQQQ could break 33.7 = 20 day–33.90now, might get 34

  • annamall

    :-)

  • LostIllini

    When do those puts expire? And we are sweating a 1.5 point move why? How much upside does this have? how much downside?

  • annamall

    I repeat only GS is buying GS. :-)

  • Count_de_Monee

    No problem Squiddy.
    Yes, I think it jives nicely with the theory, although the market points (above) can be read as both bearish and bullish. They are obviously hedging their calls but I believe they are pumping to begin the dumping. When will that happen (dumping)? I don't know but hopefully soon.

  • Count_de_Monee

    I think you're supposed to smoke it, not hold it 😉

  • callie

    Hold on lester, it's just correcting, it will move lower. Remember 5 waves down and then a-b-c-up and then down again. At least that's what it looks llike now…that's is in c up.

  • http://zstock7.com/ zstock

    short the Q's 34.10's–use a 34.25 stop

  • SuperBowlShuffle

    Successful traders do not lose 64% in one quarter…according to MarketGuru at least.

    I've been following “The Hun” for a while now and his counter-Atilla trades have been killing it.

  • yazzer

    agreed – 34 is next stop….very, very light volume though….

  • lester

    They are June Puts with 24 days left to trade, and I agree that AAPL could drop to 120 this week, but it could easily hit 128 today the way it is going.

  • 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„¸

  • ropey

    Qs 200ma on the daily is around 34.20 – will short like a madman on any price there…
    Having said that, waiting to see the final hour, recent patters appeared to be a sharp dump into the close, we'll see…..i think it's simply the financial upgrades today which propped up this light vol rally….things were about to teeter over and it's oh so convenient they managed to stall it again for whatever devious purpose..

  • Squidman

    The first two words of chapter two of our bible are?

  • annamall

    Have fun I love tennis!

  • zenith191

    Or the SAS motto: “Who dares wins”

  • lester

    would you be willing to sell me a used copy of the book for $20 plus shipping. There is no way I am gonna pay $70 for an account my size. If you are interested, I will give you my mailing address at work.

  • standard_and_poor

    IMHO odds now favor a continuation of rally, next pullback will decide whether or not I go long..
     

    ________________________________

  • standard_and_poor

    IMHO odds now favor a continuation of rally, next pullback will decide whether or not I go long..
     

    ________________________________