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Temptation Gold
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Temptation Gold

by The MoleAugust 31, 2017

I’m sitting a bit between a gold bullion and a silver plated hard place this morning. Reason being that earlier I was running a few test stats of which the popular exchange traded Spyder fund GLD was a top candidate. And lo and behold – apparently this week is statistically one of the highest ranking in the year, not just for its net Sharpe ratio but also for the percentage of higher closes:

GLD_weekly_percent_positive_stats

An 84 percent chance that week #35 resolves higher. Heck, I take those odds any day!

2017-08-31_gold_USDJPY

Which may must explain the following divergence: The Yen usually tracks gold pretty well but since Monday gold has been dropping somewhat but continues to lag the Yen by quite some margin.

2017-08-31_gold_entry

All of which makes this juicy entry a lot more difficult to take. I actually could have grabbed it a few handles lower but hesitated due to the conflicting data I’m looking at. Maybe ignorance is bliss after all? 😉

Remember also that next week has pretty low odds of ending in the plus, thus for this entry to have any chance of succeeding I’d need almost a picture perfect entry which I only would risk for 0.3R if gold drops to below 1307 and then paints another spike low. Oh and I want free voucher for one mulligan on silver. Too much to ask?

2017-08-31_copper_update

I wanted to revisit a prior copper campaign as I’m seeing a valuable lesson to be learned. Unfortunately it got stopped out at about 1.2R which wasn’t bad but thwarts the profit potential I had anticipated. You may recall that I was pretty excited about this entry as I saw clear signs of a trend candidate.

2017-08-31_copper_LT

What are those, oh mighty Mole, please tell us! Well, for one it had painted a break out pattern out of a pennant on the weekly panel after which it slipped into sideways mode for a few weeks. As it finally picked up steam and pushed above its upper 100-week Bollinger I exploited temporary weakness for my long entry. Of course the idea was to ride this bus all the way into 3.2 where I have little doubt it will end up before the end of the year.

So what happened? I tell you what happened, my overly stingy whipsaw derived campaign management happened! What I should have kept in mind was the long term potential as there clearly was nothing but air above those weekly Bollingers and a breach of the monthly NLBL was of course the final signal that copper would push toward 3.2. What I ought to have done was to keep my trailing stop a bit more loose until at least 2.5 or perhaps even 3R. This may sound like hindsight reasoning but I do regularly employ different campaign management rules for different types of systems. And of course my discretionary trades should not be an exception. In my defense, I’m only half human so like the rest of you guys I often become biases after enduring weeks of sideways churn.

Bill Eckhardt would not be happy, I can literally see him shaking his head reading this. This is exactly the type of campaign he’d be all over back in the 1980s after which he’d jump into his DeLorean and drive it all the way to the bank.

Lesson learned: Let your winners run, and give your trend trades enough leeway to pick up steam.

2017-08-31_dollar

Alright, forgive me if I’m jumping a bit all over the place today but we’ve got several concurrent themes going. The dollar is another chart I wanted you to see, perhaps even in the context of the gold campaign above. As you can see it was rescued from the brink this week but it’s far from being out of the woodshed if you get my meaning. that pair of daily NLBLs below 93.4 will most definitely put up resistance and nothing bullish happens here until those are overcome. A failure here would of course benefit gold tremendously.

2017-08-31_EURUSD_update

Speaking of which, I’m finally out of my EUR/USD hedge after it scraped 3.5R. Not a bad pay off for a few days of work! Clearly there is the potential for a long campaign here but I decided to hold off until I see a more convincing floor pattern on the short term panel.

2017-08-31_spoos_update

The E-Mini campaign has enjoyed another session of effervescence and now it’s time to advance our trailing stop to a recent spike low which locks in about 1.3R in profit depending on how you placed your stop (and if you did your position sizing properly).

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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.
  • Yoda

    The trades that are the most difficult to take often end up being the best ones. Go gold!

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

    GDX, back to full position.
    pull back-to-support.

    http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=0&dy=0&id=p40916981983

  • ridingwaves

    Run IBB and XBI thru your filters, I believe a trend trade has been in place for a couple months now with similar type breakout…though not a wedge…

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

    There’s gold in them thar hills….retest of that old candle cluster… https://uploads.disquscdn.com/images/babb41a4c142c71ae5afdb01a0a8406fe088caf7c8e29abc3b5ad9aa33b7a293.png

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

    yeah, I was thinking of a break out, pull back scenario. a few days ago.
    let’s see if it runs. if it does, that STO will embed instead of crossover.

    EDIT: if so, switch to weekly! :-)

  • ridingwaves

    Spt. is excellent delivery month for silver….but gold she’s a lover of the finer things and has many trying to put her down https://uploads.disquscdn.com/images/933a479f6ee4359638756f832620795319a3d9c286c70362223315e3233cd86e.png

  • Mary

    Hi Mole. On your GLD graph above, how is week number determined? January 1 usually falls in the middle of the week. Is that week 1 or will it be the first full week of the year or some other rule?

    Thanks in advance.

  • http://evilspeculator.com Sir Mole III

    Excellent question Mary and it does not necessarily go simply by full week. See here for example and note that the first week of 2017 actually began on December 26th 2016 – which in some Northern European country is the 2nd day of Christmas! Week 1 sometimes starts in the past year and the first full week often is week #2. Also certain years have 53 weeks (e.g. 2020), just to make things more complicated 😉

    In the end this of course affects the stats somewhat but we do have 60 years to work with on the S&P, so I think the sample size is sufficient. By the way next year will be very easy as 1/1 falls on a Monday, well at least for us Europeans – in the U.S. the week obviously starts on Sunday. Okay, I give up!

  • Grant

    FYI for US citizens. Gas stations are already starting to lock pumps here in DFW as there is no supply. My location in Texas is a shorter run than most so it will hit here first and move outward. Fill up what you can, we could go a week or more with no gas. I was up at 4 am and the pumps were full here.

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

    can we narrow it down to Region 3? US is rather broad don’t you think?

    https://www.eia.gov/todayinenergy/images/2012.03.20/RefineryUtil_overview.png

  • Mary

    Thanks for the link. I found this:

    Week number according to the ISO-8601 standard, weeks starting on Monday. The first week of the year is the week that contains that year’s first Thursday (=’First 4-day week’).

  • Mary

    prices have increased 30 cents per gallon where my cousin lives in the northeast …

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

    Bobby Low—come out and play…I think you can now use the breakout area as easy stop to see if bull run follows course below
    https://uploads.disquscdn.com/images/731a339945bcfe65995862f67df3c85a9acc1aca726360bebf249e576bcfef66.png

  • Grant

    Hmm…. how many refineries do they have in DC? LA? Denver? Chicago? Atlanta? Where do you think this stuff comes from? A gerbil cage? Never mind, forget I said anything. :)

  • ridingwaves

    MNKD has a lot of naked shorts 26% of float, it has pretty chart below current price and could find 1.50 if shorts collaborate ( have to be real here), PPS just moved over the daily 200sma for first time in a while, I put bids in at 2.00 but bought some here also with stop at 1.90
    The product is cool for diabetic population, they have first in class rapid acting insulin spray on market…
    if marketing gets better than sky is the limit….still buying near lows…The creator of this has unreal story of success but died before he gets to see it take off
    http://aemf.org/item/story-of-alfred-mann/

  • Julie

    Mole Great job yesterday on AAPL. HD pointed out how AAPL liked fibs (price) Checkout AAPL 5 year daily chart 55 ; 89 and 233 emas Not shown are the 21 and 144 emas ,,,,Add them and Wow ! Thanks Mole
    JULIE https://uploads.disquscdn.com/images/389be3dece734aebcc490ebec4488cd941f5ac19afed91451190a63da4275cb6.jpg

  • Yoda

    Tesla owners should rejoice

  • http://evilspeculator.com Sir Mole III

    Right, that would make sense as Thursday represents 4/7th of a week, so that week that has it needs to protrude more into the new year and less into the prior.

  • http://evilspeculator.com Sir Mole III

    And make sure you have a locking gas cap – not fool proof but it deters the lazy at least.

  • http://evilspeculator.com Sir Mole III

    I guess you should thank HD then!

  • http://evilspeculator.com Sir Mole III

    Until the lights go out…

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

    Texas authorities stated that looters will be prosecuted to the full extent with severe sentences. Anyone that takes advantage of people in situations such as this ….. Complete scum of the earth …. We sent a check yesterday and today is a National Day of Giving
    JULIE

  • ridingwaves

    that’s why the tesla storage battery and solar roof combo is going to be huge…..the batteries will keep getting better….In Mole I trust on this…

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

    oh calm down, those bastards will get back online.
    $$$ is a GREAT Motivator. and it’s not like those things are water soluable.

    http://wrcb.images.worldnow.com/images/14798886_G.png

  • Yoda

    Nutty gas is on a roll today. September is statistically bullish. We are bound to come out of the range at some point.
    I’m long UNG

    https://uploads.disquscdn.com/images/0547dc00730eb51f14e172c9c4d4f037fb0e9a312ea6dded8e39661d66de300e.png

    http://charts.equityclock.com/natural-gas-futures-ng-seasonal-chart

  • ridingwaves

    funny that I was just taking glance at simple chart and see a familiar fractal, jumps the 100sma and bullish bet with stop just below it seems fair https://uploads.disquscdn.com/images/bd9a0673600f6db68902b0cd66c5c0eabebf565ea8ab2d9a26ff3ed2f939fc71.png

  • Yoda
  • Øyvind Nyhammer

    Believe it or not, gas stations in Norway is warning of expected jump in gas prices due to Harvey. So the effect is pretty broad.

    Here is the article since all of you are fluent in Norwegian …

    http://e24.no/energi/olje/norsk-bensinhopp-etter-superstorm/24130355?expId=df-86-f5c5b98b&varId=df-86-f5c5b98b

  • HD

    Nice Julie. I don’t use MA’s anymore but one guy I traded with wrote a TOS script that was an avg of a few moving averages that created a very nice ST ES signal. They caught on to us and we had to abort.

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

    I’m long XLE.
    Major turning point on my 2 year chart.

    we shall see!!

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

    I know a little swedish. 😉
    Lord knows I’ve put together enough furniture.

    https://lh4.googleusercontent.com/-ND0hfMnYpHk/AAAAAAAAAAI/AAAAAAAAIw8/kiYMgwbEfjA/s0-c-k-no-ns/photo.jpg

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

    Google Chrome Translator is a life saver.

    “An important exporter
    The fact that hurricanes in the United States may disturb the gasoline market is probably something the world needs to get used to. The USA has become a dominant exporter of refined products such as gasoline.”

    doesn’t work on blondes however.
    😉

  • Mark Shinnick

    I see merit to this also because of its support base.

  • OzarkHillBilly

    Hey Mole, I’m just getting caught up and saw your comment on the previous post regarding Kim Jong Un. You might find this interesting.

    https://www.armstrongeconomics.com/world-news/war/kim-jung-un-watches-markets-during-his-launches/

    Of course, all these photos are staged, but it’s a nice little psych operation.

  • HD

    $SPX anybody else showing ST -D on these highs? 2472 the next R IMO

  • Mary
  • BobbyLow

    I’ve been out all day and now we have another 9% move in LABU today along with a break of the 52 Week High. Damn! I am tempted but just can’t do it. If I jumped in now and price had a major correction right after it did, I could never forgive myself.

    Maybe it moves straight to 96 and above or maybe there’s a down move before it gets there. . .

  • http://evilspeculator.com Sir Mole III
  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    ..checked with family in SanAntonio.
    yes, the gas hoarding has begun.

    good for him, he has a telecommute job.

  • Grant

    People are rotating out of US bonds and into commodities. Basically, throw a dart at one and it’s going up. Same with equities.

  • http://evilspeculator.com Sir Mole III

    Armstrong has good points but I think he may be jumping the shark on this one. Could easily be just a simple positional graph for tracking a missile? 😉

    If NK is trading proxy accounts then I’m sure they don’t follow the trades right there during the missile launch.

  • OzarkHillBilly

    I agree. I’ve thought about offering Armstrong my services as proofreader / editor.

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

    *************************
    PUBLIC REMINDER
    *************************
    ******************************************************
    Today is Month End of August
    Tomorrow (Fri) is Month Begin Sept
    Monday (US Labor Day Holiday) NYSE closed.
    ******************************************************

  • Julie

    Mary There is a large refinery in Anacortes WA I believe it processes Alaska crude and distributes in the Pacific Northwest. It will be interesting what gas prices do in OR and WA
    JULIE

  • Grant

    You’re probably ok as far as supply but the petrol companies will be pulling supplies from other areas to cover the loss from Harvey. You will get a price increase. For the one thinking ahead, grocery trucks with no gas, well you can complete that thought. I am off to the store while everyone is at the pump.

  • Julie

    We really feel for the victims of this tragedy. 20 years ago we lost our home in a fire …. Neighbors ; friends and relatives stepped up to the plate and we will never forget the kindness and help of others. We sent a check yesterday and will do more. We received an e – mail from our church and when we get home we will donate clothes and other items.
    JULIE

  • Mary

    FWIW here’s my 2 cents.

    Sept starts tomorrow, historically a down month, followed by the Oct rally into early next year.

    I think we will put in a lower high here based on /ES daily chart.

    This is a good time to hedge long equity positions or take profits.

  • Mark Shinnick

    Obviously also a great time for everything to go upside bananas; we are well beyond the rational but still able to protect from stupid.

  • Grant

    Thank you. My buddy from high school sent me this pick after he was rescued from his house. He lived in out in country between Beaumont and Houston. The picture is a shot of I-10 a 3-4 lane highway (each way) between N’awlins and Houston. His house was waterboarded, lost everything.

    https://uploads.disquscdn.com/images/a3f24f13654d5cfa488cd1947b68db78c85eaee17d6b643cdc7d78266a800eed.jpg .

  • Mary

    It is a game of odds, eh?

    I just put on my hedge. I use SPX put butterfly spreads that expire in a month. They are cheap and hold most of their value even if we go above 2500. In that case I profit on my long positions.

    I’m very comfortable with this right now, but only because of the reasons I stated above.

  • Mark Shinnick

    Well, I think your short volatility concept had its merit because its a bit hard to imagine that whole trade not getting even more sucked in before getting killed. However it turns out there should be enough signs for the intraday placing of trades fading of a truly manic upside one might expect of the end of a multi-generational uptrend.

  • Mary

    I’m not expecting the end of the uptrend, actually quite the opposite. I’m just hedging for September.

  • HD

    Ding, 10 handle rally. Range 2,462.65 – 2,472.44 +55 from the 8/21 low

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

    did he see any giraffes or elephants by chance?
    Merci’!

    https://i.ytimg.com/vi/uLCUyPw3lPo/hqdefault.jpg

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

    I agree, I just don’t trust September. A cheap hedge is wise IMHO.

  • BobbyLow

    That’s awful Grant. It’s an unbelievable experience to watch it rain as hard as it did wondering when it’s going to stop and it doesn’t stop until after unbelievable damage is done. I wish them the best.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    That is fucking crazy!

  • http://evilspeculator.com Sir Mole III

    Almost everyone I know in the U.S. has a family member or friend who lost a house due to a natural catastrophe. This stuff happens a lot over there, which is something a lot more rare over here in Europe. Must be heart breaking to see the house your family worked hard to earn literally get flushed down the river. And a lot of time with it go things which cannot be replaced.

  • http://evilspeculator.com Sir Mole III

    Fuck, Monday is Labor Day? I would have completely missed that!! Thanks GG!

  • Yoda

    Damn! How one can sleep in one of those?

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

    with the big move in GASO, it wouldn’t be too hard to hit 2.00

    http://stockcharts.com/h-sc/ui?s=%24GASO&p=D&yr=4&mn=0&dy=0&id=p28448802777