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The End Of The Beginning
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The End Of The Beginning

by The MoleOctober 14, 2014

We are seeing tepid signs of buying interest but it’s not exactly convincing – at least not thus far. We need to see a lot more mojo down here as we have reached the last line of defense – a slip up here and it’ll be one long cold winter for the bulls.

2014-10-14_spoos_update

That drop below the lower 100-day Bollinger should have never happened – but it’s on the books now and there will be consequences. The only remaining level of support that’s keeping us from falling off the plate is the (very much untested) lower 25-week BB and thus far it seems to be holding. Let me be clear: A drop below 1850 will open the floodgates and we most likely find ourselves at 1750 or lower.

Bottom Line: The bulls have a vested interest in holding 1850 – for below it the abyss awaits. But whether or not we bounce here – this is BAD and most likely it’s not the end of the story. To quote good ole’ Winston:

“This is not the end, it is not even the beginning of the end, but it is perhaps the end of the beginning.”

2014-10-14_crude_update

Talking about falling off plate and all – here’s another recent turkey – crude. Wow – that’s a massive drop and it very much resembles what we’re seeing on the equites front. Just worse. We are now on death watch and I’m posting the LT chart for a reason. What we need here now (imagine Winston saying it) is last kiss goodbye maneuver, after which we will deploy our troops to deliver the final death knell. The Mole will be on the case here – that much you can bet on.

One measly setup waiting below for the subs – but it’s a good one 😉

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You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

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.
  • Skynard

    First, agree with your analysis. Thanks for that! MM’s trying to confuse right now.

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

    Churchill was half-American? good enough for me chap.

    Determined too.
    Realising university was not an option, and recognising Winston’s childhood love for toy soldiers, Churchill’s father decided to send him to Sandhurst Military Academy. It would, however, take three attempts before Winston passed the entrance examination.
    http://www.military-history.org/articles/winston-churchill-facts-10-little-known-facts.htm

  • dragan ilic

    Thx Mole. Looks like Europe run into another perfect bear trap. No moore overnight positions, 1 vs 1 gonna fu,k em up.

  • bdoone

    Getting many -1000/-1200 TICK readings which are getting sold into right after obligatory 3-4 handle pop… not good for bulls

  • dragan ilic

    I have noticed a thing at European indexes, espacially OMX 30. When market is about to close, last call, if there is a drop it usually signs that SPX will start alot lower next day. If the last call is positive SPX will most likely gain or stay at same levels overnight. When we had that big drop 1934 – 1900 OMX 30 lost 0.35 % in the last call. If you want me to i can report the closing calls here every day. Those dam algos smell whats about to happen.

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

    High Yield bonds aren’t selling today.
    yesterday was a front run?
    [JNK]
    http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=0&mn=6&dy=0&id=p14432873539

  • dragan ilic

    GG i was lucky yesterday. To big risk…Could easily have ended with 2-3 % drawdown.

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

    Better Lucky than Good
    😉
    but yeah – kidding aside – discipline, discipline, discipline.

  • ridingwaves

    TBT just keeps painting fresh lows….soon 1% real estate loans…and 50 dollar oil…snark over

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

    “usually”. best you track it and get a stat.
    if it’s an edge, exploit it!

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

    what’s with the negative vibes?
    let’s turn that frown upside down.
    TLT
    http://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=1&mn=9&dy=0&id=p33631047730

    (Fear Trade!)

  • bravenewworld2011

    Break of yesterday’s low…if one were pyramiding short positions, would this be a good time to add?

  • dragan ilic

    From now on i will not leave any open positions. The last call doesn´t matter to me. But if you are interested i am sure it could help you many times.

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

    Me personally, no. As the forum, Yes.
    if this is something that goes into an RBT (a belief, turned into a system) let’s have at it.

  • Wyo_Redneck

    So Far BTFD has not worked for them today

  • dragan ilic

    we could try it for a week or so. See how it works out. 🙂

  • Skynard

    Do not short this bitch, mm’s want you to. TRAP

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • bravenewworld2011

    I was already short 1/2 position, looking for good timing on the other half

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

    sample size should be N=10 or greater.
    😉

  • CorporalCarrot

    Big divergence here between the Russell and the others. Do not add to shorts here. This could be the bottom.

  • Billabong

    They have us on a routine … 3:20 starts the sell-off.

  • CorporalCarrot

    Dow 16,300 tested 3 times on hourly charts. R2k looking positive. I just bought again at 16,311.

  • tradingmom

    Now that’s how to manufacture a squeeze

  • bravenewworld2011

    yeah that was giving some concern

  • Skynard

    They entice you to your last breaking point…………then BOOM! /ES shot up 10 pts

  • newbfxtrader

    Zero is not bearish today.

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

    I totally forgot the currencies!
    is GBP/JPY melting down?
    Nooooooooo.

    Is JNK or HYG panicking to the downside?
    Noooooooo.

  • Skynard

    Totally agree, that is why I said that.

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

    8 (5-min) candles wiped out by 1?

  • ridingwaves

    it aint over

  • Skynard

    That is cool, big squeeze comimg sir, if you are a sub, check out the div on the hourly.

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

    *time check*

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

    Big Bears got to take profits somewhere.
    🙂

  • Skynard

    Lol, market closed. Rally time now

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

    over 1876 Spoos should do it..

  • ridingwaves

    some big tech earnings coming up…lets see if INTC, CSX today and GOOG on thursday do to help soothe the bulls

  • Skynard

    Indeed

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

    yes, isn’t INTC Tuesday after close!?

  • ridingwaves

    yes…

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

    Just came out. up a buck

  • Skynard

    Good point, thanks

  • Billabong

    INTC income up 12%, expects rosy 4th quarter earnings.

  • Billabong

    NQ up – INTC announcement?

  • http://evilspeculator.com molecool

    If you’re short already I would hold but most definitely have your trailing stop a few handles away. It either falls hard from here or snaps higher – you won’t have time to manually close out if that happens.

  • http://evilspeculator.com molecool

    A week or so? Dude, you go back and check at least a year worth of data. What are you guys – amateurs?

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

    1877!

  • Scott Phillips

    Pyramiding in this situation is a decidedly bad idea. We are in an extremely high volatility move which means snapbacks (big ones) are probable at any time, and also in high volatility bear moves counter trend setups are still an edge.

    In this situation the truth is its a coin flip if we go up or down from here. I’d bank some profit and stick your stops tight. It’s tempting to add because if we fall from here we fall hard, but its probable we do a bit of fucking around back and forth here before deciding.

    Bottom line, the easy money has been made in this move. Now guys like Skynard come in and mop up the crumbs 🙂

  • Scott Phillips

    N = 50 to START having some confidence.

  • bravenewworld2011

    Thanks for the feedback guys! I’ll leave the 1/2 position as is for now then. My stop is better than breakeven (even if we get a good size ramp overnight) so I’ll get out green either way.

  • dragan ilic

    I have been around here for many years.. To me this place feels like a second home. I have been watching last call at OMX 30 and compering it with SPX 500 for years. It works. But on otherside i dont want to spam this place. So if it is ok for you Mole, i could provide those numbers. 🙂

  • Skynard

    /NQ, Let R Rip:)

  • Skynard

    Looks like above first resistance and freewheeling.

  • http://evilspeculator.com molecool

    VIX:VXO still pointing up. VERY fishy…

  • http://evilspeculator.com molecool

    Does anyone else have problem posting images here? Fails for me almost every time…

  • dragan ilic

    Same here…Why is it not possible to edit/ remove images ?

  • http://evilspeculator.com molecool

    I wish there was a valid alternative (spam less) to disqus – it’s bugging me.

  • Skynard

    Yes, every time until today for some reason it worked fine

  • Scott Phillips
  • newbfxtrader

    Better stay out. Theres other trades…

  • dragan ilic

    Since we talk about things which bugs us, there is 1 thing. When links are posted in the comment section, would it be possible for them to be opened in another window. Would like to stay on this website, not be redirected….

  • newbfxtrader

    Rt click then open in new tab or window….

  • dragan ilic

    Thx 😉 Never mind Mole…. Problem solved

  • Skynard

    Short run to 3850

  • RUFCrazy2

    Not usually

  • Scott Phillips

    One thing to add is that pyramiding is for LOW VOLATILITY moves

  • SerenityNow

    Got an update on a PL short alert an hour or so ago, but can’t locate an entry email. Anyone else have that issue?

  • newbfxtrader

    6.07 pm yesterday

  • SerenityNow

    Thanks newb… I got a PA alert at that time, and remember thinking why not PL… but didn’t get the PL one. Thx again

  • newbfxtrader

    Oops that was the PA one. My bad. I didnt get the PL short.

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

    fishy? as in it should be pointed down by now?

    If my magic MA’s touch, that would be a buy signal.
    about a point & half right now.

    purely mental M mind you.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p61221873787

  • wandering196

    same thing has happened to me, PA yesterday, PL today

  • Scott Phillips

    email me 888rewards at gmail.com i will sort you out

  • Malcolm O’Mara

    Well,here I am sitting on a whack of FAZ @ 17.80. I could have sold it for +2%, but
    didn’t of course. Now I find myself questioning the wisdom of my decision, not
    to sell. On the one hand, I continue to believe that 22.56 is an important
    inflection point on the 30 and 15 minute XLF. On the other, I know I need to
    place a stop. I have decided on one tick below the 14:00 low of 17.62.

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

    Tomorrow is the biggest Economics day of the week.

    http://finviz.com/calendar.ashx

  • ridingwaves

    ID on any velocity instrument tomorrow, pretty straight forward…

    http://s3.postimg.org/un7g7ifbn/vix_daily1015.jpg

  • ridingwaves

    bulls need to make stand this week or election day will turn into 401k inspection day….

    http://s27.postimg.org/eemglucwj/bpspx_calling_Gerb.jpg

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

    I’m seeing a PnF for 1840.

  • Skynard

    Lol, would say that 80% of the down move was banked, now time to long for me since it is a higher probability at this point:)

  • Skynard

    Open positions:
    Long /NQ, /ZW, /ZC, /LE, /NG, SPY 193’s

    Stopped out /CL
    Sold /DX @86.055

  • Skynard

    Incidentally, see a tick up on the daily.

  • CorporalCarrot

    Lol it’s groundhog day. I woke again, carbon copy of yesterday, stopped out of my Thor gbpaud but completely hedged by the long Dow I took into the close yesterday. I cut that straight away and waiting for a better entry.

    I’m hungover as fuck this morning, went out with some mates last night to watch the Ireland v Germany game. It was all sombre and civilised until we scored a last gasp equaliser in the 95th minute with the last kick of the game for a completely undeserved draw. 8 pInts of Guinness and a Doner kebab later and I’m feeling pretty seedy this morning.

    I seem to remember I owe gerb an answer on something but I don’t have the mental capacity. At the moment.

  • Billabong

    For those looking for a bottom in oil, here is some trivial data from the last five years. Every year had a sell-off. The smallest and shortest year was 2012 with a one month duration and 23% down move. Excluding 2012, the average down move was 27% and 4 months in length. With that in mind, our current down move is 25% and 4 months long. This would find oil bottoming out between $75-80 for a host of reasons. Of course, if there are structural problems, it could go lower. TA is still a sell across all time frames.

  • Billabong

    For those looking for a bottom in oil, here is some trivial data from the last five years. Every year had a sell-off. The smallest and shortest year was 2012 with a one month duration and 23% down move. Excluding 2012, the average down move was 27% and 4 months in length. With that in mind, our current down move is 25% and 4 months long. This would find oil bottoming out between $75-80 for a host of reasons. Of course, if there are structural problems, it could go lower. TA is still a sell across all time frames.

  • Billabong

    It was a great game … exciting, like the Poland / Scotland game.

  • http://evilspeculator.com molecool

    Undeserved? You guys got lucky to not have your ass kicked 😉

  • CorporalCarrot

    Sometimes it’s more important to be lucky than right 😉

  • http://evilspeculator.com molecool

    The Germans have problems right now – not the WC team I remember.

  • Scott Phillips

    ZB just hit it’s Thor target. One good trend pays for em all!

    http://screencast.com/t/xcllYkXJ7P4l

  • Scott Phillips

    I agree with you long is a higher probability at this point. But *how much* upside is the question. The odds are that any upmove is likely to be retraced quickly, so you have slightly better than 50/50 odds (call it 57/43 or something like that) of a .8R win (or something like that). I think there are easier and better trades around rather than catching every leg up and down in equities 🙂

  • Scott Phillips

    I’d be interested in seeing the data 🙂 I NEED DATA TO LIVE!

  • Scott Phillips

    AUDNZD Thor is now short

  • 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

    Ha – you saw that 🙂

  • http://evilspeculator.com molecool

    Unfortunately the subs didn’t see that entry – it was way back…

  • Scott Phillips

    The correlations haven’t been too bad lately, even when we had some losers like GBPAUD yesterday, USDCAD and ZB kept going up to compensate

  • Scott Phillips

    There were a few who didn’t get yesterday’s PL entry by email

  • http://evilspeculator.com molecool

    Wasn’t that when D. emailed me too late? Because the pre-alerts are working fine now.