Discretionary Trading
Now Reading
The Whites Of Their Eyes
193

The Whites Of Their Eyes

by The MoleJanuary 14, 2016

The famous order “Don’t fire until you see the whites of their eyes” is a battle cry which became known in stories about the battle at Bunker Hill which was fought on June 17, 1775, during the Siege of Boston in the early stages of the American Revolutionary War.

In the past two sessions we twice attempted to dip into a small amount of long positions but equity buyers continue to be overwhelmed by consistent selling. I have been very clear about the nature of this particular sell off which differs fundamentally from what we have witnessed in the past few years. On Monday I presented pertinent evidence on the volatility and momentum side. My assessment was that we are in the early stages of a secular bear market and that dip buying opportunities should not be our primary concern. Very few of the strategies and trading habits we have acquired over the past six years will be applicable going forward.

2016-01-14_spoos

The primary directive of trading a bear market is that you never ever trade against the trend unless you have a very compelling reason. Although that rule is equally applicable to bull markets it holds true in particular once the big bad bear is running the tape.

Take for instance the situation currently on the spoos. The short term panel is looking iffy while the daily has us near the lower 100-day Bollinger. Potential spot for a bounce you say? Well, quite frankly that Bollinger, although valid as a measure of standard deviation, is mostly theoretical at this point. For one it hasn’t been touched and observed for ages. Secondly it is starting to dip lower.

2016-01-14_spoos_LT

Long term we have absolutely nothing right now. The weekly panel is giving me nothing and the monthly panel has us near but not on a monthly Net-Line Sell Level. As stated yesterday, I would have to see a real touch here followed by compelling evidence on the short term side.

The type of tape we are facing right now is insidious in that it pretends a lot but rarely delivers. You are probably curious about the underlying cause for this change and I would point toward two primary factors:

  1. Fear – there is none. You may hear a lot of horse wash on the news but the small number of retail rats who got taken to the woodshed two weeks ago have long closed their trading accounts. Institutional investors aren’t long this tape as they spent most of 2015 scaling out of equities (accounting for the annoying year we had to suffer through).
  2. No bears and no profit taking. I’m sure there are institutional traders who are holding short positions but I don’t see any profit taking on the way down. Because profit taking means you have to ‘buy back your positions’. And that invariably produces counter swings of various degrees. The tape I’m looking at on the short term side reflects nothing but steady and consistent selling.

Bottom Line: Do nothing here until you see the whites of their eyes. And by that I mean, keep your powder dry until a compelling reason emerges. That applies to both the long and short side actually. At some point, out of the blue probably and without any warning, we are going to see a bounce. If you manage to catch it, count your blessings and trail it loosely until once again we are facing medium or long term technical context. Even then successful entries are not guaranteed but if they happen then make sure to keep your exposure small and place your stops conservatively.

There is one equities chart however that’s offering superior context right now. If you’re a sub then please grab your decoder ring and join me in the lair:

evil_separator

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

Please login or subscribe here to see the remainder of this post.

2016-01-14_ZB_update

Update on our bonds campaign: So far so good but it now has to pick up momentum. My stop has been advanced to the break/even spot. This could turn into a smashing LT campaign and even if we get stopped out I am pretty confident that we’ll see another long opportunity again.


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.
  • BobbyLow

    Good Morning Folks,

    Yes, it certainly does smell like the beginning of a Bear Market. Actually it smells a lot like “Fat Bastard’s” Stool Sample. :)

    https://www.youtube.com/watch?v=QRt2_OLY3Ho

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

    Excellent commentary, and I must say, the opening graphics lately, are above par.

    This layout, also truly works on my tiny iPhone 4s, Impressive.

  • BobbyLow

    I agree on both. The improvements to the site have been outstanding!

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

    so, are you surprised no refugee traders limping in here with “what do I do?, I’m nearly wiped out” stories? I expected at least one.

  • Mark Shinnick

    Just tight-stopped out, excellent gains. Looking for re-entry.

  • BobbyLow

    Not really. I think most beginning traders are pretty stubborn, head strong and need more than one market beating to get their attention.

  • Round we go

    knife catching one more time. tqqq 85.50 , tight stop below today’s low.

  • ridingwaves

    some buyers flowing into beat down sectors

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

    SPX 1898 should put up a fight in my weekly lens.
    based on lows in Nov 2011

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=W&yr=5&mn=0&dy=0&id=p13314835033

    maybe a tail gets painted today/tomorrow.

    have a plan, trade your plan.

    -GG

  • Huey

    nice entry, might get a runner out of this one. TICK sloping upward from start of day

  • Round we go

    es attempting 1900 breakthrough.

  • Round we go

    let see how she resolves. patience and perspective, may I not forget this bear season. lesson well learned.

  • CandleStickEmUpper

    I haven’t seen a snapback rally like that in a long time. Managed to scalp a few points on the way up so far, nqs are moving quite fast , I will not have time to post my scalps real time like I used to. Before you see it, I’ll already be out

  • BKXtoZERO

    trailing stop was hit, out of TVIX from 7.75 to 9.8

  • Round we go

    ever since 1950 and down. it looks very similar to oct bottom. the vix levels is roughly the same, this time a little higher. will see….

  • Round we go

    nice!

  • BKXtoZERO

    two mornings in a row I get up, do something then go back to sleep. Van Tharp would not approve but it is working

  • Round we go

    work it bitch! 40 points in one hour, not bad…

  • http://greenlander1.blogspot.com/ Greenlander

    My tight ass short stop was triggered (was super tight because we were sitting right above dangerous support) and flipped to small long (sold VXX call spreads expiring Fri) with stop slightly above the open. I am glad I stayed up late to plan this out. The old me would’ve fcked this up.

  • http://greenlander1.blogspot.com/ Greenlander

    Buying volume looks legit….so far.

  • ridingwaves

    1920 is important hurdle for bulls, I took small L volatility at 1918 after selling out earlier…

  • http://evilspeculator.com Sir Mole III

    Do you happen to be a friend of Springheel Jack? 😉

  • Round we go

    watch the retest of 1900

  • http://greenlander1.blogspot.com/ Greenlander

    Haha no. Way too much annotation it’s confusing.

  • http://evilspeculator.com Sir Mole III

    Agreed.

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

    now that’s a name I haven’t heard in a long time.

  • Kishore Kumar

    SOS. The white in the eyes, of Bulls or Bears? Well, as long as the daily trend is down, maybe the bears can still win? However, history tells us to never underestimate the power of the mischief mongers, the devils who can override all technical analysis. Can we not have a turnaround without a high volume culmination of the selling? Even Heiken Ashi can tell what is going on as trend in various time frames and likely to be continue in that particular timeframe, until it is shown by that indicator as reversed. Why guess?

  • BKXtoZERO

    as Reagan said: Trust but verify.
    I’ve been careful and I trust no trend. I never underestimate the bulls anymore……. ever

  • Round we go

    1900 is a major support area. also 4hr divergence has been building forever

  • Kishore Kumar

    Why just the bulls, why not also the bears? I only trust myself, and still lose!

  • Kishore Kumar

    In strong trends, divergences between price and indicators cannot be trusted. Even divergences with market internals had been ineffective during the powerful selloff. I am finally throwing out all correlations and look for only higher highs and higher lows or vice versa.

  • Round we go

    yah trend is still down but see how easy it was at the start and now it is getting complicated. will see…..

  • BobbyLow

    BKX, I read your reply to my comment on another thread regarding adjusting technique from longer swings to shorter term trades and vice versa. I believe that it all depends on what kind of trader you are or want to be. There are many different kinds and I don’t think one is better than another. I’ve flipped back and forth from going for short term plays to longer term swings and back many times. I’ve had the opposite effect where everytime, I switched to shorter term plays, I thought I would be able to do better. But there were problems that occurred and the more trades that I made, the more chances I had to make a mistake on execution. There were also opportunity costs that appeared because if I wasn’t available to make a trade when it was time, trades that should have happened never did. This is an area where back testing can tell a story. In some cases, I’ve back tested going back 15 Years that covered just about every kind of market imaginable and found that going for extended plays were better for me.

    However, there are many factors involved here and one size fits all does not apply. So you need to do what is best for you. :)

  • Round we go

    es recaptured 1900es, now need to keep it.

  • BKXtoZERO

    waiting to see what they put together today. Would have scalped long but missed it.

  • Round we go

    xiv is above your 19.50 call , currently at 20.17

  • BKXtoZERO

    Thanks Bpbby. Can you refresh my memory what style of back testing you do? pen and pencil looking at charts or spreadsheets excel type hard numbers? short reply is enough. If I was retired I’d have all kinds of time on my hands but I am at other end of spectrum with all my time sucked up. I am hopeful that things get easier for me by March.

  • mugabe

    only price pays! and trend or range!

  • Round we go

    yah for a swing counter bullrun es closing 1930 and above would be very possitive. will see.

  • http://evilspeculator.com Sir Mole III

    Alright, I’ll make sure to make it load extremely slow on iPhone 4s specifically then. I can’t make it too easy on you guys after all.

  • mugabe

    you mean as slow as on your internet connection?

  • Round we go

    check this out. you seam to get whipsawed alot. you should learn/try swing rather than day trading in a bear market.

    http://www.zerohedge.com/news/2016-01-14/if-was-2016s-bullard-sticksave-moment-here-what-happens-next

  • mugabe

    is he against sleeping?

  • mugabe

    they might be about to get their second …

  • ridingwaves

    I have it going to 25 if bulls can sustain the move

  • ridingwaves

    it would be much better for bulls if they could take a little more pain and bounce from 1826 area….I would definitely be a big buyer of beaten up symbols….

    http://www.drummagazine.com/images/gear/051110-Amedia-cymbals.jpg

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

    nice pun.

    back at ya.

    Algorithm
    https://www.youtube.com/watch?v=Fq6DDMkcLqk

  • Round we go

    inverse head and shoulders on 1min at vwap

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

    I think I see it, but the neck line wreaks.

  • Round we go

    awsome, sounds like he is playing to a casio keyboard.

    dude is a machine, no swing.

    who’s music is he playing? I love the music even with the cheesy production quality. Awsome.

  • ridingwaves

    the vix at 60 minutes is comfortably above the 50sma…until that breaks with conviction…I’m a skeptic of the push…

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

    the Spoos hourly is creeping upward.
    ..think the bear stops are slowly being filled.
    it’s a counter-trend to the up.

    I’ll be back at close.

  • CandleStickEmUpper

    Shorted ES 1908 on the formation of the second shoulder on the 15’s

  • Round we go
  • BobbyLow

    Sure. I transfer information from my charts to regular student type notebooks. So it’s Pencil and Paper for me. Some people would rather put this info onto a spreadsheet of some kind. But I find this method to be cumbersome. Another thing is that by using pencil and paper, I get a better feel for what I’m actually seeing.

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

    come to think of it, Mole may have a video set to this.
    :-)

  • CandleStickEmUpper

    Covered at 1907.50

  • http://evilspeculator.com Sir Mole III

    Zero Snapshot for you leeches:

    .

  • Round we go

    greedy bears feeding the short covering rally?

  • Mark Shinnick

    Good going there, I had the boatload of mine even a bit tighter at .89

  • ridingwaves

    or waiting on the confident bull still playing buy the dip and push up mentality…
    so far the vix is unimpressed

  • Round we go

    noted.

  • Round we go

    yen taking the big dive, nice

  • Round we go

    since your handing our freebies. what does the daily say :)

  • BKXtoZERO

    TVIX year to date looking good (5788$) so far and my Oil long looks to be moving too! Nefarious indeed 😉 The tax lots below are screwed up by them. I saw 2 losses where I knew there were no losses. I always thought FIFO but they phuck with lots so you can’t take a loss for tax reasons or some BS. I have no idea why they do this but those 2 losses were not losses when I looked at the lots I entered and sold. VELOCITYSHARES DAILY 2X VIX7,500—50,271.67—56,060.455,788.7811.51Short-termSell.FIFO1,50012/22/1510,132.4101/05/1610,601.12468.714.63Short-termSell.FIFO1,00012/23/158,201.5401/05/167,067.41-1,134.13-13.83Short-termSell.FIFO1,00012/23/156,971.6401/05/167,067.4195.771.37Short-termWash Sale Adj[315]01/05/16-1,749.2301/05/16–1,749.23 –Short-termWash Sale Adj[286]01/05/16-674.0801/05/16–674.08 –Short-termSell.FIFO2,00001/05/1615,512.0601/06/1614,253.58-1,258.48-8.11Short-termWash Sale Adj[468]01/05/16-2,087.7401/06/16–2,087.74 –Short-termSell.FIFO2,00001/05/1615,371.8901/07/1617,070.931,699.0411.05Short-termWash Sale Adj[281]01/13/16-1,406.8201/07/16–1,406.82 –Short-term

  • Round we go

    my hourly does not show overbought yet. stoch has a chance to embed :) but logical area to stall.

  • Round we go

    4hr es finally, fuk that took for ever. second macd cross is usually very strong.

    all indicators go. RSI needs to cross the 50 tho. will see :)

  • Darkthirty

    short here

  • BobbyLow

    A decent move down on the Yen is long overdue. However, the last time there was even a Print Lower than the previous day against the GBP was on December 17th. The last time that there was a Close Lower against the GBP was December 16th and prices on this Pair had really begun to make its move the week before. One thing I’ve found is that after extended favorable runs that my Method can eventually make my stops too wide so I’m waiting for a print above yesterday’s high to stop out.

    I’m experiencing similar things with my stops on /CL and the IXB Index so I’ll have to use recent highs as my stops here as well. This is still a nice problem though. My Gold play is close to being stopped and if price holds here, I’ll take about a -.5 Loss on it. I’m glad I’m not a Gold Bug because this thing has turned into a comatose piece of shit. :)

  • Darkthirty

    If I can just pry that bitch out of the channel……getting bit here!

  • mugabe

    yeah, nice problems to have, and no profit stop is gonig to be perfect

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

    Yep.

    frankly, I don’t see how Ivan can do 6hr es.

    patience of Job.
    back to my lunch!

    http://s7.postimg.org/4me5ure63/patience_ES.png

  • Round we go

    all the things I am talking about currently is counter trend of overall market of unknown magnitude. the main trend is down but this counter maybe strong.

    good luck bobby.

  • Round we go

    nice!

  • ridingwaves

    the bulls are much stronger today than last 2 weeks..

  • Round we go

    yah look at the 4hr volume bar today 😉

  • ridingwaves

    they don’t want to let 1920 go…or fear again will take over…they are countering selling with that volume…

  • Darkthirty

    More like bullbots

  • ridingwaves

    whatever they are, the counters to down moves haven’t been acting like this over last 10 days…

  • mugabe

    it’s always of unknown magnitude

  • Round we go

    dont you want cheaper short positions. I do:) I am going to short the hell out it between 1980-2060

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

    they? come on, you know some people don’t like ‘they’.
    😉

    price is hugging that sloper trendline that I posted the other day.
    I have no inspiration as to what tomorrow brings.

  • Round we go

    the 15min stoch is embedded. the rsi looks like it wants to embed to. macd has room togo. come on pump this bitch, greedy bears need a lesson, just like greedy bulls need a lesson.

  • Round we go

    yah but that 4hr I been trackin for four trading sessions should pay off. and the longer it take the more power. will see…

  • Round we go

    yah slam the door on fingers :)

  • mugabe

    I went long near close yesterday, so hope you’re right!

  • Round we go

    fuck one thing I have learned is to not loose focus when tracking a chart. I used to get frustrated when indicators would embed and then re-embed and give up and change my mind about what I was seeing. now I just keep looking for the next opportunity. this is a gut instinct I have built by getting my ass kicked when I gave up on something I saw earlier. you note that I have been updating that same 4hr chart the whole way down. anyhow will see how things turn out. good luck mugabe.

  • Round we go

    just watch china, china was green last night :)

  • BKXtoZERO

    a close over 1950 would be an engulfing candle over yesterdays red candle. I didn’t try scalping long today strictly because I traded so much that my T+3 regulation in retirement account wouldn’t have had enough to go both long then short and I was going with a new bear trend (favoring short), now, Bully looking less sick. Glad TVIX stop worked well. Can’t skin em all.

  • mugabe

    cheers – you, too! the trade’ll either work or it won’t :)

  • Round we go

    true that!

  • mugabe

    so it looks like we’ve gone from a period of untradeable tight range chop to a period of untradeable high volatilty swings:)

  • Mark Shinnick

    If you have a good intraday capability, you should be able to take some excellent opportunities.

  • Darkthirty

    Let’s see if this one works

  • mugabe

    hence the expression, good job

  • Round we go

    hey mole the fly was bullish this morning and loaded up spy. that jeff macke is pretty good too.

  • mugabe

    I think I’ll take a lottery ticket (long dated OTM put) if RSI (14) daily gets over 50. I allow myself 1% of account value worth of lottery tickets a year. Don’t usually turn out well :)

  • Round we go

    watch out

  • Darkthirty

    yup

  • http://greenlander1.blogspot.com/ Greenlander

    Trailing stop got hit and closed out longs. I am a bit suspicious by VIX not dropping that much today.

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

    oh, that’s inspiring!

    http://www.virtualcointoss.com/

    {yeah right}

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

    get ready to close your books, teachers coming.

  • Round we go

    why do you thing all the action happens overnight. china is the marginal buyer and seller.

  • http://greenlander1.blogspot.com/ Greenlander

    I really really don’t like this + the semi-weak close. For me to stick around, I needed the check the VIX box.

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

    I’ll defer to the bigger veterans to back that claim up.

    If China was the marginal, the Euro/US open would smash whatever attempts were made (long OR short). trust me, I’ve seen gold handled this way forever.

  • BKXtoZERO

    Standing aside as per rule#3 Only get exposed when you absolutely and objectively see an edge as per your lens. I am giving the bulls a chance to put something together. I smell more……

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

    correct.

    1) an edge

    2) your lens.

    3) when it’s time, BET IT ALL.

    http://nerdalicious.com.au/wp-content/uploads/2014/06/Boardwalk-Empire-S4-E10-Rothstein.com_.jpg

    ok, forget #3.

  • Round we go

    Intel (INTC) Q4 EPS USD 0.74 vs. Exp. USD 0.63

  • Round we go

    2040-2060 boatloading area :)

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

    chart mate (!!)

  • Round we go

    hello, rounding top formation that’s been developing for all last year. if you cant see that you should not be trading :)

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

    IMHO, nearly irrelevant.
    INTC is now-days a NDX substitute.

    well, almost.

    😉

    http://stockcharts.com/h-sc/ui?s=INTC&p=D&yr=1&mn=0&dy=0&id=p85033266146

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

    oh I saw that last night.
    and your mama.

  • Round we go

    come on you know I uber bear! remember all the bear crap i posted all through nov and dec when eveybody was telling me to fade fundamentals. I hate unicorn’s I am going load up sqqq and zbio up the ass after bounce.

    now I am just trading as now everyones knows we’re f-ed :)

  • Round we go

    nice :)

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

    actually, No.
    I just came out of retirement.
    that should have been an omen, then!
    😉

  • Round we go

    go back and read some pain of loss ( right before new year ) post that was during the 2070 top. pretty funny shit. your awesome gerb.

  • Darkthirty

    Might be boatload time now…..tomorrow could be a surprise.

  • Round we go

    do you even know where your monthly support lines are?

  • BobbyLow

    No changes in positions for me today. Came close on Gold but it’s still (barely) hanging on. Today’s 66 Cent Bump in Crude is not anything to get excited about . I still have a little room to go on my Basic Material Short SMN and my GBP/JPY Short is still viable. So we’ll see what tomorrow brings.

  • ridingwaves

    4:24pm BREAKING-Goldman Sachs to pay $2.38 billion penalty to DOJ
    DOJ agreement will reduce Goldman’s Q4 earnings by $1.5 billion

    They should not be a banking center anymore and should only be an Investment bank..

    Thanks fed/treasury for keeping this hydra of a company alive by allowing them to bypass regulatory statutes in 09 to become a bank at 12AM in the morning so they could get some free taxpayer rescue money……

    Fucking pigmen

  • Round we go

    I think I have finally accepted the fact that VIX is just retarded, timing wise :)

  • mugabe

    what rounding top formation? haven’t got my glasses:)

  • kim

    yep, no guaranties and reservations here

  • http://evilspeculator.com Sir Mole III

    Hehe – I was actually looking for that today – thanks.

  • http://evilspeculator.com Sir Mole III

    Damn, I Ioved that series.

  • Round we go

    if your not greedy, yah load and hold til you see a 50% drop, in third quater :)

  • CandleStickEmUpper

    “Probably not a trend day”

  • mugabe

    can’t believe everything you read

  • mugabe

    good stuff, my qid went down a bit more than my sso went up, qid might be a gonna tomorrow.
    btw, do you sell at close?

  • mugabe

    not sure about 10 if you’re trading off dailies … means you can never let a trade develop

  • mugabe

    that’s setting the bar quite low:)

  • http://evilspeculator.com Sir Mole III

    Weekly positions are necessary if you want to ride out a bear market. Daily positions WILL get whipsawed – guaranteed. You can still take entries on the daily but you need to think in weekly terms. If you have a better way to word that I’m all ears.

  • BKXtoZERO

    On my desktop at work and at home.

  • BKXtoZERO

    “core positions” is my wording

  • mugabe

    that does make sense … or at the least it’s more conservative

  • mugabe

    you could post one of those daily of twitter

  • Round we go

    how about big boys defending 1900.

  • ridingwaves

    Spx better open above 1920 in AM or more Red…

  • mugabe

    not a bad time to get back in on the equity front, methinks

  • ridingwaves

    Bearish sentiment spikes to nearly 3-year high, survey shows

  • mugabe

    not surprising really

  • BobbyLow

    Strive for Longer Term Swing Trades with Wider Stops that can last at least a few days to a few weeks. The combination of the same percentage R and Wider Stops will call for smaller sized positions.

  • mugabe

    it’s tricky .. if you trade off weeklies and you apply weekly atr stops, you’re gonna have very wide stops and v small positions

  • Round we go

    or go big and not give shit, cus it’s Superbowl time for bears. They just need to not forget they are bears, when they start winning and get cocky, as you guys have witness. So many lessons to learn, if would read the comments from October to now. Seriously if you just learned from the mistakes I made as well as the big pay off. the retard traders might survive the circus :)

  • ridingwaves

    in January it is…

  • mugabe

    This guy always provides a simple weekly review of equity action via charts and not much blather. Here’s last week’s:

    http://jonboorman.com/weekend-review-and-watchlist-46/

  • mugabe

    that’s great if it works …

  • BobbyLow

    Weekly Stops would be way too big. My Stops are based on Daily’s and are plenty big for me.

  • mugabe

    yeah – but you can up your daily stops (as you suggest), the thing is, though, if you use atr, you’re already upping them

  • Round we go

    I plan on the monthly and weekly. They tell me what type of market you should bias to. Daily and shorter time frame is used to try and edge the market into paying you more. Worry about your monthly and weekly charts do not worry about smaller time frame unless you want to gamble.

  • BobbyLow

    I’ve used up all of my “not give a shit” Chips. And at my age, I don’t have any room for any more major fuck ups. :)

  • nyse

    I believe virtually everything I read, and I think that is what makes me more of a selective human than someone who doesn’t believe anything.

  • Round we go

    on weekly i have no stops. it s a bear market. you can hold the whole time. the risk is in not having a short, now! this is going to last one year.

  • BobbyLow

    We all have different lenses on the markets and make decisions based on different things.

  • mugabe

    how can you believe virutally everything and be selective at the same time?

  • mugabe

    what happens if it isn’t a bear market?

  • nyse

    jk man it my fav quote from “Spinal Tap” that I use any chance I get 😉

  • Mark Shinnick

    Its drivers are certainly not rational….but as a attempt to rationalize irrationality …that’s pretty cool :)

  • Round we go

    then I loose half my hedge, otherwise its superbowl time! and I have those two single mom dancers to support remember.

  • mugabe

    apologies … and I have seen the film :)

  • mugabe

    why not just do the old naseem taleb thing then: 90% of account in cash and 10% in long-dated puts? or even 20%. … at least you know your downside risk

  • Round we go

    all i leaned is it laggy, as Tradingmom noted.

  • Round we go

    yah if you a square, that is what you do. if you want to fuck then, and truly know what is going on. then lever with good trading.

    anyhow I am more like this guy.

    https://www.youtube.com/watch?v=saINV8usboQ

  • http://evilspeculator.com Sir Mole III

    Apologies for my late session absence but I have been a bit worn out in recent days. All that work over the holidays took it out of me. And there’s much left to be done this weekend. Sometimes I need to just kick back and not think of anything…

    Anyway, I’m back on the case tomorrow morning.

  • http://evilspeculator.com Sir Mole III

    Do you know what VIX attempts to measure?

  • Round we go

    protection taken by traders.

  • TheRooster

    I gots to trade my rules. However, looks like I will have a full boat this weekend so anything that opens today will have a reduced position size now.

  • Darkthirty

    Today’s ramp might have been II of 5, came real close to a 786 retrace, but with opex tomorrow you can almost guarantee as up day.

  • Round we go

    remember all those gaps we had coming down. it would be cool, if we gap all the way up like ghosts.

  • Kishore Kumar

    I look at the weekly before the monthly.

  • Mark Shinnick

    Still…amazing productivity / good quality, yeah take care of the most fundamental hardware/software :)

  • Mark Shinnick

    Lots of ways to look at this but I’ll approach this in non-mathematical terms:

    It only seems laggy; what’s really happening isn’t correlated
    as well with actual index price motion or direction, but with expectations of future index motion and direction. Vol might even be thought of as the quick/nimble pack of wolves or cats…they will linger seemingly idle….. while the herd moves along in a more-or-less calm steady walk; the predators are assigning little expectation of that changing.

    Expectations is behind why vol can stay in relatively flat or gentle-sloping ranges for long periods even when the index makes gradual net gains or losses – if the expectation (emotions) aren’t “stirred” into believing in a new expanding true range of the index over time, one just doesn’t see worthwhile vol direction exacerbation. Its often the first “shock” that produces the greatest local expansion. Since whatever new (fear) belief that suddenly prevails to expand vol (and contango) usually then subsides, vol then corrects even though the stock index itself may not have by much – thus furthering the impression of “lagging”….but there, again is the confusion of attempting to correlate the index to the expectations expressed in vol; the two are quite different animals.

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

    China….ha! like I said, flip a coin.

    Two faced Market.

    RSI horizontal line violated like a refugee victim.

    RSI diagonal upper line?, nice enough for now.
    [ES Hourly]
    http://s22.postimg.org/8qvm78ywh/two_faced_Jan14_post.png

    -GG

  • BKXtoZERO

    after all he wrote about being rested, clear headed, in gear and feeling good or not trading I bet he would not like that at all.

  • Darkthirty

    The one I put on 40 minutes before the close is still running

  • BKXtoZERO

    I have watched the futures for years and I’ve seen a green bid at night for many many years no matter what, except once during greek crisis and even that was reversed quickly, so it is odd now to see weakness. It really must have changed this time.

  • Round we go
  • Round we go

    dont give up yet.

  • aussiebinlaughin

    Maybe it’s just me, but I personally find you very annoying in that you never stop commenting, give constant opinions about the tape…but also provide no context. A bit like white noise on a TV, always there, hard to ignore, but of little value

  • kim

    +1

  • kim

    +1

  • mugabe

    This is worth repeating:
    ‘My assessment was that we are in the early stages of a secular bear market and that dip buying opportunities should not be our primary concern.’

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    Mole,

    The character of the market has definitely changed. I think it is great that you have made some good posts highlighting this point. Having thought about it a lot, I am definitely going to be taking a step back to watch, learn and adjust.

    I hope you keep hammering away at us all of the lessons you have learned from the past bears, as I think it will benefit everyone. I know just having some of your recent posts is reason enough to be a sub.

    Thanks!

    -D

    p.s. Below is really a summary to myself and two other blogs of where I think we are right now. I realize that the opex turning points are not for everyone. I also know that I will be adjusting my approach after we see the market trade over the next few months. My positions will also be a lot lighter.

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    As I have been saying, the character of the market has
    changed. It will take us some time to understand what new market dynamics will
    replace the “BTFD” mantra of the persistent bull that has now gone to pasture.

    From a turning points perspective, the patterns that
    developed, were tested and became regular features of each month (rally in to
    employment, rally in to opex, etc….) will now need to be tested again and most
    likely be adjusted for the change in the character of the market.

    The one thing that I do not think will change (as it has
    existed since at least 1998) with only two real instances since then where it
    failed and relentless falls were continued (September 2000 and February 2001)
    is for the opex period to enable turns in the market. There were 7 significant major bottom turns
    in the 2008 – 2009 bear market

    1. Jan
    2008 (Tuesday post opex / post MLK) The Kerviel MAJOR bottom with a HUGE gap
    down and rally – which was re-tested the next day before rallying in to early
    Feb 1st.

    2. March
    2008 (Opex Monday – Bear Stearns bottom)
    It was a short opex week due to Good Friday on opex day. There was a BIG Gap down on opex Monday.

    3. July
    2008 – (Opex Tuesday) – Severe market stress that started in early June finally
    ended on opex Tuesday and a 6 week rally began

    4. September
    2008 (Opex Thursday) – It only lasted 2 days, but the Paulson Bazooka on opex Thursday
    afternoon ignited a close to 140pt 2 day rally

    5. October
    2008 (Friday before opex week to opex Tuesday)
    – relentless selling ended with a large gap down reversal on the Friday
    before opex week that ended at the open of opex Tuesday resulting in an almost
    220 pt rally. (that was crazy!)

    6. November
    2008 (Opex Friday) – Huge volatility and a relentless fall from early November
    ended on opex Friday and the market rallied in to early January

    7. January
    2009 (Tuesday post opex / post MLK) – Huge fall from Jan 6th after
    the end of the ‘Santa Rally’ and a bottom at the close on the Tuesday post opex
    / post MLK – though it took most of the week to test the lows before a volatile
    rally began that completely ended for good on Feb 9th.

    CAUTIONARY Opex weeks

    There were two opex periods in the 2008-2009 where the
    bounces were minimal when the market was quite oversold (running along the
    lower bollo as well) and looked like it should bottom significantly.

    1. June
    2008 – Market fell from post May opex and looked likely to bottom during June
    opex, but it bounced in to June opex from the Wednesday before and it topped at
    the open on opex Tuesday and collapsed

    2. February
    2009 – From the Feb 9th post employment high, the market fell
    relentlessly to new bear market lows. It briefly bottomed at the close on the
    Monday post opex only for the bounce to fail and the market roll over again and
    collapse in to the March 2009 final bottom.

    The challenge right now (and we will only know in a few
    weeks) is whether this week’s Monday to Wednesday rally was the same type of
    rally that was observed in June 2008 or February 2009 or whether this opex week
    is creating the bottoming process seen in Jan 08, Mar 08, July 08, Oct 08, Nov
    08 and Jan 09. The technical indicators
    have me favouring the latter, but clearly there are two historical examples
    that showed just multi day bounces before the declines resumed.

    The key for me is that the character of the market has now
    changed, and it will take a few months to determine how the market will trade
    in this new period. It was a wonderful
    6 plus year bull market. Now it is time for me to watch, learn and adjust.

    For now, I do believe opex will do its job here and is
    highly likely to produce a major turn like it did in August 2015, but there are
    at least two clear instances in the last bear market where it did not. Also,
    certain sentiment indicators that were not available in 2008 (Stocktwits) and
    the Vix (which I did not and do not study enough) are not showing the type of
    fear associated with a significant opex turn.

    My best advice is to keep your risk under control and your
    emotions in check, as all of the significant opex bottoms in 2008 – 2009 felt
    and were scary to varying degrees.

    -D

  • mugabe

    don’t overthink it

  • mugabe

    As the US is the last market turning down, it might be interesting to look at those which have been in bear markets for a while e,g, Russia. No sign of any bottoming at all, but might be worth checking in on monthly.

  • CandleStickEmUpper

    Full reversal overnight, rendering yesterday as a snapback rally only. Let’s see what the first hour after open will bring to better determine today’s direction.

  • http://evilspeculator.com Sir Mole III

    )
    ( /( ( (
    )()) ( )))( ‘
    ((_) ) ((_)() )
    _((_)((_) _(())_)()
    | | || __| ((_)/ /
    | .` || _| // /
    ( |_|_||)__|( _/_/
    ) ) ( /( ) ) * )
    (()/( )()) (()/(` ) /(
    /(_))((_) /(_))( )(_))
    (_)) ((_) (_)) (_(_())
    | _ / _ / __||_ _|
    | _/ | (_) |__ | |
    |_| ___/ |___/ |_|

  • http://evilspeculator.com Sir Mole III

    SNAP!!!

  • Round we go

    understood, i suck :)

  • Round we go

    you dont like my retardness either? I going to cry

  • Round we go

    you might like my post better in the last week of dec.