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The Bulls’ Maginot Line
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The Bulls’ Maginot Line

by The MoleNovember 21, 2011

Plenty of fireworks today and if you paid attention then you probably saw the writing on the wall last night. Before I hit the hay I emailed the following AUD/JPY setup to my subs:

This was a great example of what should have happened and when it did not it effectively opened the door to a major move in the opposite direction. As you can see the AUD/JPY was sitting at a NLSL plus there was a divergence indicating possible selling exhaustion. In my email I proposed a long trade with a stop right below that NLSL – however to immediately be short if that stop got hit. Well, that’s exactly what happened and it switched the dynamics to a big gap down this morning over on the equities side. The dynamics now hinge on what happens today or tomorrow and I will cover this in more detail further below.

First let’s review last week’s FX setups – starting with the daily AUD/JPY. As you can see our NLSL at 78.03 is now well ITM and slipped quite a bit further than I had hoped. The question now is whether or not we are dropping all the way into 74 – as there is nothing but air below I believe holding a few lottery tickets into T2 would be much of a stretch.

But the fun didn’t stop there – the NZD/USD gave us a juicy entry at 0.7731 and it’s been easy coin ever since. However, as we are now at our target I would close all lots and call it a day. If you’re a dare devil you may try a long position here but I personally would want to see a bottoming pattern or perhaps an inside candle first.

USD/CAD presented us with a NLBL last week and after hemming and hawing around a bit we finally got our pay day today. I admit that it was easy to get stopped out of this one as Friday dropped us all the way to 1.02 – but when it pulled up back above that NLBL late in the session the writing was also on the wall here. Think about that one if you believe today’s drop in equities had anything to do with the news. Anyway, I don’t like today’s pull back and I usually take partial profits after a break out like this.

Next in line – cable: Again, we have a cluster of NLSLs that was breached and we now find ourselves at T1. This one also tried to fake us out on Friday and if you got in late then probably got stopped out at break/even. This happens and if you got whipsawed out then don’t over think it or blame yourself as there are always forces outside of our control. I am not yet convinced that cable is done here – if it doesn’t pull back hard today or tomorrow then we’ll probably see the 1.64 mark by Wednesday.

Now back to equities – if you compare the current configuration on the spoos (i.e. S&P E-Mini futures) with some of the currency setups above then it’s not hard to see the correlation. We sliced through the 1200 mark and the lower 25-day BB line this morning and are now in a circling pattern around SHTF International. As you can see there’s nothing but air below – the next logical support is the 1100 mark. So are we going to slide all the way? I do have some thoughts on that – please step into my badly decorated lair:
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More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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My SPX P&F chart claims a target of 1180 due to a double bottom break down on the 17th. That and the charts I’m about to show you give equity bulls a decent chance of keeping the barbarians from crashing the gates. However, if they fail to do so and lose the 1180 mark then you can kiss your precious Santa Rally goodbye for good. Let me show you what I’m talking about:

Here’s the weekly SPX chart. As you can see the breach of the 25-week SMA was bad – but if we wind up closing below the 100-week SMA it’ll be much worse as both would function as significant resistance in late December and especially early to mid January (except for the very first week of January a seasonally bearish period). I have pointed toward possible support clusters looming below but who am I kidding – if we slide further here then it’ll probably be quick and very ugly.

The monthly SPX is looking even scarier. It seems we are in process of dropping back below both monthly SMAs – and if November closes below it would be considered a technical retest and failure. It would also reconfirm the bearish long term trend that started to unfold in May of this year. So in essence – this would be a great spot for the bulls to step in and punish the bears – if they fail to do so it’s lights out for the coming weeks and probably months.

Bottom Line:

It’s looking ugly and 1180 should be considered the Maginot line for the bulls. If we drop any further then things will most likely become unhinged in a jiffy. I am not saying it will happen but if we drop through 1180 and/or close below those weekly and monthly SMAs then the bulls are in a world of hurt and recapturing the current levels will be the least of their worries going into the new year.

Look out for signs of stabilization on the currency side – your usual suspects: AUD/JPY, EUR/USD, GBP/USD, NZD/USD, and USD/CAD – those are among my favorite pairs and overnight moves on those four usually give me a pretty good idea of what’s in store for the equity side.
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Favorable Mention:

I would also like to point toward the daily Zero as the one chart that has remained bearish all along:

That is Friday’s snapshot and as you can see it had remained increasingly bearish all through the late fall triangle. Where is it pointing today? Well, there’s only one way to find out – or you can do like GG and fish for clues in the comment section 😉

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.

  • Anonymous

    Another outstanding post!

  • Anonymous

    Große Commentry!

  • http://thebhbgroup.com TheBHBgroup

    Very Evil muwahhh…..Great Post Mole!  The zero has made me a much better manager of risk…can’t trade without it bottom line for me.

  • http://evilspeculator.com molecool

    You can’t say that – ‘great’ in German is not synonymous with ‘good’ or ‘considerable’, etc. You could say ‘Sehr guter Kommentar!’.

  • Anonymous

    Ok, Sehr guter Kommentar !!

    (i blame google translate, just trying to mix-it up here, my oops!)

  • Anonymous

    Nice Mole…bulls snorting

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

    Take the line on the daily Zero, and make it into a T.
    3months up, 3 months down.

    pass me the fish bait.
    😉

  • Anonymous

    are you gonna fish or cut bait? 🙂

  • tradingmom

    That “unkosher” zero trendline I pointed out — we’re below it again.

  • http://evilspeculator.com molecool

    Slow here today – I guess the holiday season is kicking in…

  • Anonymous

    gg is fishing in th $nile !

  • Anonymous

    There is an AB=CD setting up, 1198 is retrace on 5 min /ES starting 2 PM EST candle

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

    clever.

  • Anonymous

    Not sure to follow. Can you draw it?

  • Anonymous

    im in the same ‘boat’ as you, not being a sub-(marine!)
    Anyway, could still be a dead cat bouce in these stocks

  • Anonymous

    Bottom fisher-folks, careful, zero is not supporting. We could be revisiting VWAP for the close 

  • Anonymous

    Looking to me like the end-of-day squeeze has run its course.  I posted something just a couple of minutes before Mole posted the above (kudos for that by the way).  If anybody has any thoughts be interested to hear them.  IN a nutshell:  EUR has fared quite a bit better than ES today.  Indeed, EUR.USD got back to Friday’s close and, while it has slipped a bit, it is still not far off.  In particular, the 11am 30min candle is a rocket for EUR.USD whereas ES, that is generally somewhat co-related, took a while to respond and has bounced nowhere near as far.  They are at least back more or less in synch in terms of moving in the same direction (if not same magnitude).  I am perhaps looking too hard for signs of them getting unstuck, but if anyone has comments on the topic, love the hear it. 

  • Anonymous

    Mole I sent you a email. 

  • Anonymous

    I prefer AUDJPY as an indicator. I am wary of the ECB’s intervention which I think can distort the short-term direction of the actual trend.

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

    yep.

    look like this afternoon’s up was a technical bounce off the October SPX 50% fib line. [1185]

  • Anonymous

    JJ! wary of ECB intervention? Japan is not exactly a sweetie either.

  • Anonymous

    In the last bunch of comments someone pointed out SPX is at the 50% retracement. Dig the Russell 1000 fin. serv. index. It is at the 61.8% retracement. That just shows the banks are the movers …. come to where the action is! The VIX seems weirdly subdued, but I wouldn’t be too worried If you have been short for a bit and are trying to play larger moves. That’s what I am telling myself …. If I am wrong I will just have to kick my own ass, unless the market beats me to it. Got a little distance between the markets foot and my ass, think I will be o.k.

  • Anonymous

    nice call

  • http://evilspeculator.com molecool

    ????????????????????????????????­??????????????

    D   A   I    L   Y      Z   E   R   O     H   A   S      B   E    E   N      U   P   D   A   T   E   D

    ????????????????????????????????­???????????????

  • Anonymous

    Indeed, we did execute a lovely “touch’n’go” at VWAP a few moments ago.  It is amazing how magnetic that 5 min VWAP line can be.

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

    you’re going to get me banned.
    drawing on the zero, sheeesh.

    http://i40.tinypic.com/2yngdpw.png

  • Anonymous

    Japan? Pooh. Look at what the SNB was able to do! currency wars afoot!

  • Anonymous

    Mole – while your sleep-deprived vampire hour postings unfortunately don’t reach me until the next morning in most cases, I do appreciate the opportunity to study them.  Last nights was pitch-perfect.  You very accurately picked the inflection point, called for a possible long and, most importantly in my book, gave the correct prediction for what would happen if your stop was taken out (pile on in the other direction because she is going down…).  That was easy to follow, fulsomely reasoned and, well, great to read!

  • Anonymous

    That white line you drew – why a triangle breakout?

  • Wave_Surfer

    I know that EW is a cuss word here
    and
    that it feels like every EWer is bearish, but I can’t help but notice the following.

    At the end of July/start of August, we had an obvious down move.
    We then did an obvious triangle
    After the triangle, we moved down.

    Triangles are always penultimate moves ( At least according to the EW stuff I have read.  Maybe outside EW, they are considered penultimate moves as well.)

    After the triangle, we obviously moved down.
    Excluding, extreme and obvious bias to the bear side, can someone explain to me what I am missing and why I am wrong?

    To me, it seems the above makes it a simple and obvious 3 wave downward correction.
    The last July, early August move down would be wave A
    The triangle would be wave B
    The move down from the triangle would be Wave C

    After a move up, and then a simple, clear direct 3 wave correction, what happens?
    Something similar to what Volar indicated maybe?  A wave 3 until around May?
    What is wrong with my thinking?  Other than the obvious – I am using the EW cuss word.

  • Anonymous

    Pooh. Look at what the FED did. I’m just saying the Euro intervention looks wimpy compared to the Major central banks. But ya know it is amazing on the dynamics work. Have you ever read the one story of John Law.  There is a short passage where apparently some jealous group of guys got together and tried to cause a run on his bank by calling in their notes at one time. The story goes on to read that he calmly told them , he would need a 24 hour notice for such a large transfer. With his connection with the French regency he was able to do this. Calm restored. Too which was done very conspicuously, large wagons with a large amount of Gold was deposited in his bank. People seeing this was another way to restore calmness and happiness in markets. Of course we now know how his experiment ended. IMO sadly so. the book is  Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance its a short fun read.

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

    well, eventually – when the selling pressure subsides.
    back to zero.

    (I may have drawn it inaccurately.)

  • http://thefxspeculator.blogspot.com Onorio

    ask prechter…

  • http://evilspeculator.com molecool

    Good call JJ 🙂

  • Anonymous

    Thank you. Much clearer now.

  • Anonymous

    TY. Was seeing a small neg div on zero 5 min between 11 and 13. That was my warning that the up move was kinda shaky for today. 

  • Anonymous

    JCB intervention on a massive scale always happens in the same 10 min period, just after market open Japan time… its easy to spot, and it never works for them 

  • Anonymous

    Dont overlook recent Fearless’s post http://evilspeculator.com/?p=25396

    Do we slide into SHTF territory, or do we stabilise and go up – only subs know Moles current stance on this!

  • Anonymous

    I’m running the risk that Mole is going to ban our collectives behinds for this, but moles allegedly have bad eyesight so we might get away with it.

    I don’t think, that this count works. First of all, look at the bigger picture. If you want to count the move since spring as a 2 consisting of an a-b-c correction, you would expect a much deeper retracement, at the very least 38.2%, but anything less than 50% for a 2 would be dubious. At least this alleged 2 should have reached the 1’s subwave IV which should have been to bottom in summer 2010 at around 1000 on the $SPX and ideally it should have retraced much lower.

    Secondly, in a single zig-zag the b-wave needs to be a an a-b-c itself, so a triangle doesn’t fit.

    However, there is a third argument against that kind of kind and that is what Prechter and Forst called “wave personality” and I think that this is actually the most useful part of EW in practice. An a down does some technical damage, but does not cause widespread panic and is usually seen as a buying opportunity. Contrast that with the panic we witnessed in August. The following b-waves are supposed to be technically weak and usually generate divergences and non-conformations, something we can actually observe in my opionion. Look at the tech sector for instance. The crucial part in our case, however, is the c-wave. These have a lot in common with actual 3s and are supposed to generate the real panic. So far we have seen some technical damage but the mainstream media doesn’t see this as a real danger. So far we haven’t seen any of this and volume remains muted.

    Furthermore, if we actually paint an a-b-c as a wave 2 and dropped to a 1000 or lower, the 3 would have have a price target well above the 2007 high in the region of 2100 or even 2800 on the $SPX. This wouldn’t be the Santa rallye, but an actual new bull market.

    The problem with all of this is that it doesn’t help you at banking coin in any way. The problem with EW is that looking forward there are usually way too many possibilities. Only looking back afterwards you will be able to identify the actual count. This effect is in my opinion more pronounced in corrective phases than impulsive ones, because impulsive waves move a lot cleaner and there are fewer candidate counts. Especially things like double and triple threes make it very difficult to determine the turning point of a move.

    The bottom line is that wave theory is valid in my opinion. It is, however, terribly complicated to apply correctly to the point where there is not much use in doing so as your time is better spent using things which will give you an actual edge.

  • Anonymous

    You seem to know a lot about the markets!
    I am now classing you in the ‘pro’ category 🙂

  • Anonymous

    Interesting signal ZFX AUD/JPY 5 min

  • Anonymous

    lol, aren’t they (the japanese) supposed to be very inventive?

  • Anonymous

    CPCE fell from 0.91 to 0.69. Retail got bullish. Are  we  going even lower tomorrow ????????????

  • Anonymous

    Thanks 😉
    I’m learning, but I feel like I still know way too little. And in comparison to other people I’m probably still a bloody amateur. 🙂

    One thing I learned about EW is that it is a great tool to confirm your bias, maybe that’s the essence of my post above.

  • Anonymous

    That is interesting.  Never seen anything like it.

  • Anonymous

    NLBL just triggered – see what happens;)

  • Anonymous

    That’s 3 flushes.

  • Anonymous

    Guess that beats a royal flush;)

  • Anonymous

    Telephone avatar + mrmargin = margin call ?  🙂

  • Anonymous

    but i do see bullish falling wedge on 30 min. breakout probably soon..

  • Anonymous

    indeed 😉

  • Anonymous

    I agree that the wave theory is valid but as you said only in hindsight

  • Anonymous

    Looks like bears dropped the ball again…party on Garth

  • Anonymous
  • Anonymous

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/bbbabee6-6971-4931-8309-0b2e76b9ed52/2011-11-21_1926.png
    But if some just cant help the feeling to go short just remember NO means NO. Im still in the GG buying the dip mode. I wonder if he remembers? Anyhow Im just protecting myself from bull “rape”. OH and update on the aud/jpy I decided NOT to buy any EOD. I want to buy it when it is real cheap if the opportunity arises.  It makes me sad though, reminds me of Volar. Ill never forget when he advised me to wait for full panic to set in before buying aud/jpy. I could have nearly bought the floor on the aud/jpy if only I waited a week more during September. It was a sweet flagship trade still. Miss ya Volar!

  • Anonymous

    Y bot qqq calls and sds puts at 10am today….ride em cowboy!!!!

  • Wave_Surfer

    Even if EW is valid and even if he is good at EW, his extreme and permanent bearish bias completely erases any help in understanding that might have otherwise been possible.

  • Anonymous

    Ouch! That got to hurt.

  • Anonymous

    This is a bookmark:
    http://xkcd.com/980/huge/#x=-11136&y=-7840&z=2

    I really like the trillions section that shows the total gold mined against total world debt in 2010

  • Anonymous

    Geez! AUD/JPY going ape shit right now;)

  • Anonymous

    I know. I actually feel kind of grossed out for posting it now. But I did it to remind folks that are entering shorts to have a plan, rules and stops as it goes for any trade long or short. Kind of like those scared straight programs for delinquent kids. 

  • Wave_Surfer

    I agree with most of what you said.Because of there being so many possibilities (IMO that is a result of the fractal nature, where you are looking at multiple sizes at the same time), wave counts are usually more of a demonstration of a person’s bias, than an objective point.  I also agree that EW is less helpful during corrections than it is during a clear 5 wave impulse.
    Another point is that I mis-spoke.  I was thinking of the down move that started in the last couple of days of October, not the bigger one at the start of August.  The correction from approx 1295 to approx 1185 is enough of a percentage drop to correct from the move up that started around 1080 at the beginning of October.

    To repeat that I agree with most of what you said.  Even though I am mentioning some EW stuff, I am not making decisions about what positions to take based just off of EW.  Though I didn’t list what I see as the more convincing evidence, I am making my decisions more based off of stuff that Mole and his Lieutenants (Volar, Scott, Fearless) say.  I am make my decisions based more off of things like seasonality probabilities and Sentiment readings.  

    Why mention EW at all?  Fair enough question and I figure most would ignore what I said for that reason and that’s cool.  I guess the reason I bring it up, is although EW is better at describing a person’s bias than it is at predicting the future, I also don’t think that it is completely valueless at all times.  Also, I know my limitations and I don’t have anything to say that would build on or improve on Mole or the Lieutenants posts.  I am trying to add a tiny bit to the conversation and not be a complete leech.  I saw a move down, then a corrective structure that is shaped a bit like a triangle and then another move down and so then I thought out loud, in case anyone had a response to what I saw.  It was not a heavy EW post where I line out a big and thorough count, but a more simple observation that I see a move down, then a corrective move in the shape of a triangle and then another move down and that it seems to me that it could form a valid and potentially done corrective move.

    The one part where I disagree is that a triangle (even though it is a 5 wave structure) is a corrective structure and so it definitely CAN be a wave B in a an A,B,C.   Triangles are seen as the 2nd the last move and a corrective structure instead of impulsive structure.  This means triangles are things such as Wave B before a C,  Wave 4 before a 5, wave D, before an E.

    ——————-
    As far as making a decision about positions, I will probably look more at seasonality and sentiment, but although I am mostly silent, I thought instead of being JUST a leech, I would mention that the move down over the last 3 weeks or so, might be a valid and simple correction for the move up that happened in October and see if anyone agrees or disagrees and why.  
    ——————-

    Along those lines, thank you for taking the time to respond.  I am responding here so that I can hopefully clarify that although I mention some EW terminology, I am not making a prediction based off of EW.  I just didn’t know how to describe what I was seeing without using a little EW terminology.  I am also responding, because, I was flat out wrong in how I described what I was looking at.  So, it can be hard for you, or anyone else to understand what I am saying, if I describe it incorrectly.

    This brings up an interesting point.  The correction that started in early July and ending at the start of October also seems to be a move down, then some what of a triangle shape and then a move down.  Does anyone else see a similarity between the correction from the beginning of July through September and the correction that started a couple days before November started?

  • Anonymous

    second that. booked a lot of profits. seems news cant get worse. ecb cant help anybody, super committee cant get a deal done yada yada. took a few longs today. will wait for a rally to reshort.

  • Anonymous

    as any seen conan II yet? at minute 29 the one girl who says “where would you have us go” is so sexy.

  • rhae

    SPY 60m   looks like you guys have the situation well covered. 

    Momentum waves have been tracking nicely… They are a little like EW, but you can make up your own rules. Not really but they are somewhat unique. Is the momo 5 complete? Of course, no one really knows.. about anything in the futures. But there are clues and hints. The soap opera continues tomorrow..

    SPY 60m … momo push down was not as strong today… with 3 and 5  divergence from price. http://screencast.com/t/sjrwdYkhv

  • Fibz

    saw it the other night. really cheesy, but entertaining.

  • Anonymous

    ZFX AUD/JPY 5 min lighting up again! The first signal was awesome;)

  • Anonymous

    Top traders are emotionless, in wins and in losses (which they don’t have many).
    😉

  • Anonymous

    yea it is. actually extra extra cheese. 

  • Anonymous

    That signal is crazy

  • Anonymous

    Have some questions about the ZeroFx.
    In case of a divergence, is it to be taken mechanically or only if zeroFx crosses into positive territory (for long). For instance on hourly AUDJPY, there was divergence from where the 11/20 line currently is while the pair continued down. Does it mean that the indicator failed?
    Is hourly zero to be taken on a standalone basis or it has to be necessarily combine with Net Line levels?
    Are the Net line levels themselves to be taken mechanically as a rule or is there more to it?
    Have read the Cheat Sheet but still can’t figure it out.
    And what are those stars on the price chart?
    And do the hourly and 5 min follow similar principles and to be taken similarly?  
    Thanks.

  • Anonymous

    Tomorrow will make today’s calls all that more special…. Nice call on 1180 Mole. Let’s go to 1240 pronto

  • Anonymous

    That is special, signal is just above the line – should launch;)

  • Anonymous

    First of all, I didn’t intend to attack you. If it seemed like that, I apologise. As I said, I think Wave Theory is valid but just not very useful most of the time when counting forward. In my opinion EW is more useful on a long term basis than short term and more useful when applied to impulsive moves as opposed to corrections, as I wrote already. It can especially be useful for determining possible targets of an impulse and it is helpful to know that there will in most cases be a wave 4 as a drawn out sideways correction after one has seen the 3’s bottom which is usually accompanied by euphoria or panic depending on the direction.

    Also, you’re right with the B-wave as a triangle. This can actually happen, but it is quite rare, making it dubious as a forward-count. But I’m not really sure, I understand your whole idea. If the triangle that started at the end of October were a B than what is your A? Horizontal triangles serve as continuation patterns (though they usually appear in the penultimate section of a larger move).

    To answer your question about the move from the May high to the October low, I would count that as an 5-wave impulse. It fits rather well into that scheme, especially the sideways phase during autumn as a 4 and the ultimate low in October as a 5 with much less force and panic than the 3’s bottom in August. If I’m right, there has to be a lot more downside, but I won’t be betting on being right. I’m actually expecting more upside due to seasonality although every passing week without that makes the bullish case more questionable and the bearish case more likely in my eyes.

  • Anonymous

    First of all, I didn’t intend to attack you. If it seemed like that, I apologise. As I said, I think Wave Theory is valid but just not very useful most of the time when counting forward. In my opinion EW is more useful on a long term basis than short term and more useful when applied to impulsive moves as opposed to corrections, as I wrote already. It can especially be useful for determining possible targets of an impulse and it is helpful to know that there will in most cases be a wave 4 as a drawn out sideways correction after one has seen the 3’s bottom which is usually accompanied by euphoria or panic depending on the direction.

    Also, you’re right with the B-wave as a triangle. This can actually happen, but it is quite rare, making it dubious as a forward-count. But I’m not really sure, I understand your whole idea. If the triangle that started at the end of October were a B than what is your A? Horizontal triangles serve as continuation patterns (though they usually appear in the penultimate section of a larger move).

    To answer your question about the move from the May high to the October low, I would count that as an 5-wave impulse. It fits rather well into that scheme, especially the sideways phase during autumn as a 4 and the ultimate low in October as a 5 with much less force and panic than the 3’s bottom in August. If I’m right, there has to be a lot more downside, but I won’t be betting on being right. I’m actually expecting more upside due to seasonality although every passing week without that makes the bullish case more questionable and the bearish case more likely in my eyes.

  • http://evilspeculator.com molecool

    Those signals on the 5-min AUD/JPY have been the money. Anyone looking at that?

  • http://evilspeculator.com molecool

    EUR/USD tickling hourly NLBL – watch the ZeroFX.

  • http://evilspeculator.com molecool

    Anyone here? No? Alright – I’m turning in then…. g’night!

  • http://evilspeculator.com molecool

    ” For instance on hourly AUDJPY, there was divergence from where the 11/20 line currently is while the pair continued down. Does it mean that the indicator failed?”

    Yes, I would call that a failed signal – not going to sugar coat it.

  • Wave_Surfer

    I didn’t feel attacked.  I was just trying to clarify what I was trying to say.
    I agree with your points on EW and its limitations/problems.

  • Wave_Surfer

    No one important may be up now.

  • Wave_Surfer

    I am still watching and trying to learn/understand FX movements better and how to better read the zero.  I hope to get to the level of confidence to place trades on the FXs after a bit more work, study and paper trading.
    Still trying to get used to the stars on the zerofx.

  • http://evilspeculator.com molecool

    So I’m not important? 🙁

    I’m gonna go and cry into my pillow…

  • http://evilspeculator.com molecool

    You’re supposed to be moderating, not polluting mate – back to the charts!!

  • http://evilspeculator.com molecool

    All I see is a lot of talk and no edge.

    That is why I don’t do EWT anymore. Some people say that I made pretty good calls with it – maybe. But my bottom line has vastly increased since I went ‘back to the basics’. Maybe that’s just me – your mileage may differ and frankly I don’t care what you guys use as long as you wind up on the right side of the tape.

  • Wave_Surfer

    Hehe… I meant no one important for you to talk to.  Just me. 
    You are King of this castle.  

  • http://evilspeculator.com molecool

    If that is in fact true then it’s useless for trading, right?

  • Wave_Surfer

    Ya.  I was afraid that what I talked about might not be of much use, but I just didn’t want to just be a silent leech all the time.

    I am still struggling to find a way to add more value.

    Someone mentioned that the P/C ratio actually went down a lot, which seems strange for such a powerful down move in the markets.  Having a lack of fear become less fearful on a day like today, seems unusual to me.  Does that indicate that there is still a lot of room for things to fall further?

  • Anonymous

    I am. Great setups!

  • http://evilspeculator.com molecool

    Don’t – he’s not representative of EWT IMNSHO – much better (and less hyped) people out there. The best was a guy called Zoran and unfortunately died a few years ago – he was on to something. Here’s is archive:

    http://www.safehaven.com/author/11/zoran-gayer

    If anyone is interested in studying EWT then Zoran’s work is what I recommend – not Prechter’s.

  • http://evilspeculator.com molecool

    See my comment about Zoran further below. If anyone should be studied it was his work.

    http://www.safehaven.com/author/11/zoran-gayer

  • Anonymous

    these stars are freaking awesome. the “star showers” on 5 min AUD/USD were just amazing and seems to have predicted the moves. i think i’m joining the zero cult 🙂

  • http://evilspeculator.com molecool

    Just yanking your chain. Alright – I’m hitting the hay. G’night.

  • Wave_Surfer

    “Star showers” are an indication of exhaustion?  Or am I reading it all wrong?

  • Anonymous

    It seems like it. It signals the upcoming move in the opposite direction. From what Mole said, if the signal fails, then you get a big move in the opposite direction. It happened Sunday night on 60 min chart.

  • Anonymous

    I guess then at least I am reading the zero correctly. Mole, I think you should rewrite the zero tutorial sometime. Would be helpful to people like me. And something more on using the Net Lines too.
    Thanks.

  • Fibz

    market is full of scared children.

  • Anonymous

    lol shorts will be scared today

  • Anonymous

    Im sorry friend. 

  • Anonymous

    You are very sure of yourself, young padawan.   11,600 on the dow futures will be the test. 

  • Anonymous

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/3000832d-c05c-4a89-a395-76b65447a5cd/2011-11-22_0833.png
    men I have been stopped out. I have no tolerance right now for holding risk. But if you haven’t take any positions yet in forex this might be a great scalp positions.

  • Anonymous

    Without mistakes, no man can learn.

  • Anonymous

    ooh too late. Already long risk and getting kicked in the teeth!

  • Anonymous

     Still holding AUD/JPY & long /ES 1184.75:)

  • Anonymous

    1184? nice entry! I have some aud/jpy longs too. lets see if the market can get off the mat.

  • Anonymous

    I understand and very disciplined of you.

  • Anonymous

    Above 1190 and she should start flying;)

  • Anonymous

    Sure you have a couple of billion to spare?!

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    Looking forward to that break of the 1180 mark to swiftly send us down to 1155, then I’m done for Christmas 🙂

  • Anonymous

    Nice Skynard

  • Anonymous

    Light volume this week requires only 1 billion;)

  • Anonymous

    Indeed; of that I’m proof!  The market SHOULD rally today, especially with all those bullish (hammer) daily candles yesterday.  Look for a chart where similar candles failed…ugly, and mostly within significant declines.  The odds are against a significant decline from here, but if we fail to go up, Convict Scott would have something to say about reactions to the unexpected. 

  • Fibz

    bernanke speaking today…

  • Anonymous

    Scott..whats ur opinion here?

  • Anonymous

    I like your approach. I have learned here to be prepared for any outcome, and trade it without bias or expectation. My account is thanking me for it now.

  • Anonymous

    Double POMO today.  Ben’s stockpiling.

  • tradingmom

    triangle on 5 min zero

  • Fibz

    TBT

  • rhae

    Yup, loading up the ammo box

  • rhae

    they can’t get it done with real policy, so they bring out the Bull Shitters,,,  lot of them lately

  • Anonymous

    Thanks fibz..I like this..started buying OOM puts on this last week…no emotion premiums in this yet.  I might buy more this week on weakness

  • Anonymous
  • Anonymous

    Crude breaking out

  • Anonymous

    the usd/zar stop moved lower.

  • rhae

    SPY 60m …   momo, and the beat goes on, 1 not done until it gets a nice down tick..
    http://screencast.com/t/yjrUJHEm3nXx

  • Anonymous

    Playing for a Pop and Drop morning  . . . retests of lows before moving higher

  • Schwerepunkt

    Ben: “It’s ‘The Bernanke,’ to you, slave.” 

  • Anonymous

    Good obs mom

  • Anonymous

    MF global now has 1.2 Billion missing . . .

    Wishing you better luck on this Volar.

  • rhae

    Must admit, the SPY 60m is slow and boring… Therefore, one could watch the shorter time frames… and there might even be some dedicated day traders.
    SPY 15m   http://screencast.com/t/OzdKjE1MJe

  • volar

    ya no shit… well wish my clients the best as well

  • Anonymous

    Why is no one in jail yet?

  • Anonymous

    Currently putting finishing touches on a scapegoat so as to protect the Elite . .  Corzine and the like

  • http://evilspeculator.com molecool

    Damn! Those bastards… May I point out that still nobody has gone to jail?

    Oh right, the cops are busy pepper spraying OWS protesters…

  • Anonymous

    No one big or connected ever goes to jaill..Look at all the TARP money that was basically stolen

  • Anonymous

    Last night  I watched an interesting interview of Bill Gross ( Pimco) probably the largest bond fund in the world. When asked about proper portfolio allocation strategy in the near future and beyond, he said Bernanke, in his actions , is screaming “get out of bonds”. He said they (Pimco) was allocating more to equities (multinational companies paying good dividends) He didn’t care for companies based in only one country per se….tells me big money will start to filter out of bonds and into equities as Fearless’s & Volar’s work suggest

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    Might be true, but they’ll want to buying at bargain prices by drip feeding into the market as it moves lower. We still have alot more to go before I’d even consider buying anything right now as an investment.

    I guess we all have our bias towards the market. I’m short on the major indexes, and will be for a little longer.

  • volar

    why has the CME not acted as they are liable

  • Fibz

    they’ve probably been accumulating the whole time the market has been moving sideways.

  • Anonymous

    Agreed, but depends on your time frame of ROI… I figure guys like Bill Gross & Larry Fink know alot more than I do and their time frame is much different than all of us on this site

  • Anonymous

    Nice!

  • Anonymous

    Hullo all.  Just back after week drinking, playing golf, shooting pool and playing cards with my buddies down in Portugal.   Looks like I missed an interesting week.  I missed an awesome trade as I went speculatively short on the friday @ 1257 or thereabouts but covered at eod because I wasn’t sure I would be able to manage the position the following week, but those are the breaks.  I am sure more opportunities will present themselves going forward.

    The only position I held into last week was my short Gold from $1,772 which is actually a hedge against physical I own.  Moved stop in to b/e just there, going softly on equities as I’m very busy with real life since I got back, and not inclined to commit too much on what’s likely to be a low volume week.     

    Could get interesting however if we paint an inside day today. 

  • Tronacate

    1180…..then some support @ 1160

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

    Brandt really had a lot to say.. and IMHO it’s grave business.
    are we about to become a tinpot dictatorship country?
    http://peterlbrandt.com/mf-global-proof-that-the-u-s-government-is-not-able-or-willing-to-protect-investors/

  • http://practicalt.blogspot.com/ Gold_Gerb
  • Tronacate
  • Tronacate

    All asset classes will decline

  • Tronacate

    Same as Kyle Bass……..his predictions are on a different time frame than we think

  • Fibz

    gap @ 1200 on the SPX minute chart.

  • Tronacate

    FSLR…..the short that keeps giving and giving

  • tradem4alpha

    Negative divergence between IWM and SPY; IWM is below the lows of yesterday, but SPY is just hovering above them. This is a VERY bad sign. Scalp longs might be good, but definitely no swing trades (the ones that I am using). I want to see a little small cap outperformance (even on an intraday chart) before I enter a swing long trade. In all big rallies, IWM started to outperform, and before big declines, IWM was an underperformer.

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

    yes.  some day they will fill it

    for now, 1183, dipping under the 50% fib line (1185)

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

    I wanna see this one turn up.

    http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=0&mn=6&dy=0&id=p84652413203

    surely they have one for the IWM.

  • nyse

    New low baby!

  • Tronacate

    Here we go

  • Tronacate

    Adios 1180

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

    ..can’t find one!

    oh well, the PnF chart is targeting bear 64.0 for the IWM.

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

    I want to see SPY 118.34 break.

  • tradem4alpha

    Yeah…this could be a rule for swing trading: only swing trades in the direction of the BPSPX using a Renko chart; I am usually looking at bullish percentages, but I didn’t look at Renko chart. So, thanks for the chart GG.

  • Fibz

    AUD/JPY is divergent. looks like equity blow off to me.

  • Tronacate

    AUDUSD……lower high…..lower low………but hasn’t broken yesterdays lows

  • Anonymous

    When is Santa Claus coming to town?
    Anyway, im mainly in cash

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

    he’s at COSTCO.
    if you hurry you might catch him.

    (GG has disgusted look on face)

  • Anonymous

    🙂
    Anyway, this market is certainly volatile, which must be good for the traders

  • Anonymous

    We need Heat miser to allow it to snow in South Town.

  • Anonymous

    nice fellow

  • Anonymous

    did something just happen?

  • http://wetorp.blogspot.com/ Wetorp

    IMF Creates New European Bail Out Facility

  • Anonymous
  • nyse

    ooops 😉

  • JJ FX

    ZFX is nailing these moves on the 5Min EUR/USD. Blue exhaustion spike at 5:50 am caught the bottom. Tried to hold the VWAP on the move up but showed divergence at the 7:35 top and lost the VWAP for a nice move down. More ZFX divergence from 8:20-8:40 trying to hold the mid-lower VWAP results in another nice move up. Targets the mid-upper VWAP. Beautiful!

  • Anonymous

    SPX got a bump, but it beggining to look like ‘news’ exhaustion now.

  • Tronacate

    AUDJPY looks channeled up…….lower high…….let’s see if it puts in a lower low

    http://screencast.com/t/CzEW7CbfkcD

  • Anonymous

    clearing my usd/zar positions.

  • Anonymous

    Breaking out of the channel on the hourly.

  • Tronacate

    Small div on ZL 5 min

  • http://evilspeculator.com molecool

    “Blue exhaustion spike at 5:50 am caught the bottom.

    That was a very subtle one – I think you got lucky there, mate.

  • http://evilspeculator.com molecool

    Can we stop this shit and start posting charts?

    What IS this? The Slope?

  • http://evilspeculator.com molecool

    You left out the whoring around part…

  • http://evilspeculator.com molecool

    Don’t listen to what BG says – watch what he does (if you can).

  • Fibz

    “some day” … lol 🙂

  • Anonymous

    Yes it started to diverge on 2 touches. Now will this be sufficient? 

  • Fibz

    inverted H&S on 5 min now.

  • JJ FX

    Thx for the feedback – it has been a process of trying to figure out what to ignore and what works most of the time. Luck works great! 🙂  I’ve noticed when the blue bars move outside the white line, often it signals the potential for a scalp, if not a reversal.

  • Tronacate

    It’s miniscule eh?

  • Anonymous

    LOL, FED minutes were leaked. Sell the “news” at 2 pm?

  • Anonymous
  • Anonymous

    This warrants caution. 

    I want to see the signal negative before I load up again

  • Tronacate

    When will they learn that printing and shuflling money produces absolutely nothing of value……..

  • rhae

    What Me Worry?  quote by famous Alfred E. Newman

    Don’t forget about yesterday’s huge gap down…

    http://screencast.com/t/GWhZplgXPRf1

    so far can’t even break out of it’s 15m down channel… not saying it won’t or can’t

  • Tronacate

    I quess we are all supposed to worship their supposed superior brain power………wtf that does for US I have no idea……

  • Tronacate

    I’d like to see a strong neg signal breaking the lower shelf line…….

  • Anonymous

    If VWAP doesn’t hold, I’ll be all in

  • Tronacate

    I’ve been adding SDS positions

  • rhae

    lol, sorry

  • Anonymous
  • Anonymous

    You’re long or short now?

  • Anonymous

    not holding anything for the moment. I cleared the usd/zar i mentioned this morning.

  • Anonymous

    Same for me. Neutral right now. Waiting for the real action.

  • Anonymous

    I agree. Depending on the close I will be looking at aud/jpy and usd/zar. Loading lightly because I really do not want to waste my capital on jerk moves due to low volume.

  • Tronacate

    Might be the VWAP try pretty soon…….

  • 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

    Oh, they know it – unfortunately investors continue to believe it.

  • Anonymous

    man i gotta do the same too. friends n fun..

  • Tronacate

    Now let’s get the signal rockin’

  • Anonymous

    In a down trend, and not going up….  Float a bit to work off oversold… then thin air below as Mole pointed out?

    Is the tape saying that IMF just threw the good money into the sharks?

  • http://www.facebook.com/people/David-Spears/100000424557856 David Spears

    1170… I’m still holding my target of 1150.