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Trading Bipolar
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Trading Bipolar

by The MoleFebruary 23, 2016

The DEP may want to consider adding a dash of lithium into the N.Y. drinking water as the sentiment swings we’re seeing across equities may be diagnosed as borderline bipolar. One week it’s doom and gloom and the next it’s buy the dip. And then yesterday everyone suddenly lost all interest and just walked away leaving only me and a handful of steel rats propping up the tape.

2016-02-23_spoos

Yes, I’m kidding of course. Actually this type of market behavior is pretty encouraging as it matches the characteristics of a bearish counter trend move. Of course there are never any guarantees and central bank machinations are always good for a hundred handles of pain when you least expect it.

However that said – as we are apparently sitting on an important inflection point I’m currently long the stronger index (ES) and short the weaker (the NQ).

2016-02-23_NQ

That’ll have me pretty much delta neutral until one of them gets stopped out. So why not just wait until a break out happens? Well, that’s exactly the point – as my luck has it that big move will probably happen when I’m off benching at the gym or asleep at night.

2016-02-23_crude

Crude is back at diagonal resistance and I’m currently short. However I’ve put in a long position to take over above 34 as there is a small possibility of a surprise short squeeze here. Those energy shorts have gotten way too complacent as of late…

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2016-02-23_events

There’s a bit of event risk today at 10:00am when we get the February consumer confidence report. Let’s see if that one may break the tie up here – would be nice to finally get this show on the road!


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.
  • evilasevildoes

    nice and funny

  • Kato33

    ZB went on quite a wild ride overnight. My ISL got hit just below the 100h. 1947 SPX is looking like pretty formidable resistance. I grabbed a small short on ES near yesterday’s highs banking on a range reversal with a target at the bottom of the range -1810 SPX

  • ridingwaves

    comex metals opex tomm..

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

    bearish counter trend move
    I concur.

  • Time Bandit

    Just another Day living in a Bear Market.

    My Forex positions are taking some of the stink off today’s performce while my other stuff is giving back a lot of yesterday’s gains. It is what it is. . .

  • ridingwaves

    I give thanks to beer, ribs and women, not necessarily in that order..
    sold out long vix via tvix for small 1/2R…1927 might paint a floor as it was the old resistance…but I could be early and it might run down further as I’m a nature lover not a stock picker…

  • ewpivots

    This is my 3rd day using Zero. Is there ever much chatter here about the Zero indicator. I’m still in testing mode.

  • ridingwaves

    a little too early is my meme…some profit left on table…but after Marin headlands hike yesterday, I’m off too find some animal life on another trail with the Aussie
    http://s29.postimg.org/v1sxw0tfb/GGate_view.png

  • Time Bandit

    Both of my Forex Positions are in solid profit. Although the swings have been wild, 2 out my 4 other positions are still in solid profit and the 2 positions that are down are only a little. By rule, I can not and will not close any position until my conditions for closing are met.

    Where my vast majority of entries and exits are made at the end of the day, I seriously have to consider not opening up my platform until 3 PM everyday. This would probably mean I would have to stay away from here for most of the day which is something that I enjoy doing.

    The markets have always been full of shit but when they go into as Mole said “Bipolar” Phase, it’s a hard thing to watch as a trend trader. I’m not changing my system again because I know it will still survive through this crap but sticking with it under these conditions means I need to watch it less.

  • ridingwaves

    my wife thinks I’m bi-polar, I think she’s misdiagnosed me because of my twisting neck disease when a hot lady walks by…

  • tradingmom

    Ocasionally. Right now there is a huge bear wedge forming on the 5 min zero. Watch for breakout/failure.

    Watch the panel below the zero to see how the bubble behaves — will that upper green band open up or block the signal?

  • Time Bandit

    That’s a great view. Only gone over the Golden Gate once. Sounds like you’re enjoying life. Good for you. :)

  • tradingmom

    Also, signal isn’t fixed until the end of the candle. Same for blue arrows.

  • tradingmom

    Its awesome — give it a little time and I think you’ll become addicted.

  • tradingmom

    This is already a little out of date, but I thought a picture might help

  • OzarkHillBilly

    Context is key, as with other forms of TA, or at least it is to me. How you end up using it may depend upon the other tools you’re also using, not to mention the time frame of your trades.

  • tradingmom

    Yes — it is excellent for scapling.

  • tradingmom

    This could be a short term double bottom — 11:32 eastern time. I’m watching that red lower band to close up and waiting for zero to break above the zero line for confirmation. If we get that, we could easily see price run up to vwap.

  • tradingmom

    Also, IMO, it is too early in the day to see continued sell off here. A reset to vwap would allow expansion of the mole bubble for a later in the day sell off to new lows. We’re already at 2 std dev away from vwap and riding the lower band. Of course, anything can happen, but there is often some buying pressure at the close of the Europe session.

  • ridingwaves

    getting old doesn’t mean getting stale right! time is too precious as we move forward in the world….I see the ugliness of society quite often thus I get out in nature to balance the soul….cheers to you BL-TB

  • tradingmom

    Just like that. Hope that helped.

  • ridingwaves

    I think your VWAP idea below might hold true…thinking we move higher before end of the week for a little blow off top before bigger down move..

  • BKXtoZERO

    long UWTI 1.50 my fav penny stock, stop CL 31.5

  • tradingmom

    At a minimum, I think we have unfinished business at SPX 1935 short term. But, we didn’t completely fill the gap that goes down to 1918ish.

  • OzarkHillBilly

    I’d concur and say that the bears still need a little more screwing. Might get some sideways action after this week to screw bulls and bears alike. Just speculation, of course. Put a small long bet on the table a few minutes ago.

  • BKXtoZERO

    I spent a lot of time up there 1996-2000. Great place. I was all over the bay every weekend as well as the beaches with the sneetches

  • ewpivots

    Thanks.

  • ridingwaves

    could the gap could be filled in later down move…

  • ridingwaves

    the ultimate bear screw before a big plunge would be take it to 1980 and then drop it..it would take a lot of stops out on the way up there…

  • OzarkHillBilly

    No doubt about that. I’ve been working on incorporating it into my toolbox. I take a few scalps, but where it has helped me the most is in better timing an entry that could really turn a very short term trade into something that lasts more than a day or two. And of course the Zero helps with exits as well in all situations, which is probably even more important in the big scheme of things. Still learning a lot about its use myself.

  • tradingmom

    Re: the zero, in my experience the signal behaves much the same way as price, meaning that patterns play out, and trendlines break and get retested. So, now I’m watching the back test of the upper line of the bear wedge that we just broke out from. If this holds, and I think it will, then we should be good for a trip to spx 1932, and maybe up to the limits of the upper band. I’d be looking for a big sell off after that if we do see that.

  • ridingwaves

    treasury auctions might be draining some liquidity this week to help with choppiness..

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

    Yesterday issued a caution which was enough for me to cut longs but not actionable enough to go short. Probably staying flat today.

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

    Also very unclear to me whether this is trend change or just a pullback before resuming higher. Would prefer to see more struggle/ churn before shorting.

  • CandleStickEmUpper

    Shorted NQ 4175

  • CandleStickEmUpper

    Agree, the continuous uptrend of the last several days cannot change just like that in a heartbeat in a few hours notice. There should be much choppiness before it begins a steadier decline. Trade carefully.

  • tradingmom

    The bear wedge morphed into a triangle. Watch for a break out in either direcction. On hourly, we look to be backtesting the downtrend line that connected 1947 and 1931. Important to stay above it. Have to leave for the rest of the day.

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

    Yeh whipsaw odds not small now so likely I’ll probably sit flat for a few days which I don’t mind.

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

    at the risk of getting a shoe thrown at me, might I suggest using multiple moving averages? EDIT, pick whatever time-frame you need.

    http://www.guppytraders.com/gup329_files/329GMMA%20Example.jpg

  • BKXtoZERO

    a thrown shoe would be pretty sweet. I got kicked yesterday.

  • BKXtoZERO

    I was surprised you sold a pretty sweet entry. No guarantee that there is more and it was “small”. I am sitting on mine hoping to get the rest of it.

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

    the price of admission. it’s worth it.
    😉

    http://i19.photobucket.com/albums/b197/thatkev23/zxcv.jpg

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

    Thanks GG. Ive messed around with the multiple MA’s but doesnt fit my style. At least for me, the lag with the slower moving MA’s (red ones) is too much for me as the market is making smaller moves now.

  • Time Bandit

    Not a bad idea. I’m not using them now but I’ve had “some” success using multiple moving averages. It looks like it would be quite a challenge to quantify all these scenarios and I really couldn’t say if I had a verifiable edge when I used them or not.

  • Kishore Kumar

    It takes about $4400 to trade one contract of /CL. If /CL reverses yesterday’s move of approx 1.5 down, the profit would be $1,500. Equivalent move in UWTI will be from 1.5 to 1.75. UWTI bought with $4400 will give you a profit of $733, about approx. half of the profit with /CL.

    So, either the above calculation are wrong or your claim of higher leverage with UWTI versus /CL.

    I think the UWTI fund trades /CL with your money and pockets half of the profits, EVERYDAY!

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

    Yeh pisses me off that I can’t ever find shares to short. Been trying to do a double short UWTI/ DWTI for a while with no luck.

  • http://evilspeculator.com Sir Mole III

    HOW is my crew??

  • http://evilspeculator.com Sir Mole III
  • http://evilspeculator.com Sir Mole III

    Polk High School – hehehehe – I always loved that show.

  • http://evilspeculator.com Sir Mole III

    Tradingmom is the Zero whisperer….

  • http://evilspeculator.com Sir Mole III

    Quite a bit of chatter here. But we don’t fall prey to over interpreting it either. When things are clear and we get a juicy divergence then the usual suspects here are all over it and you’ll know. I also put comments on the charts occasionally. Have you watched the videos?

    http://evilspeculator.com/zero-videos/

  • Kato33

    Still short ES from 1942.75. Real battle brewing between VWAP and yesterday’s gap. The resolution should be interesting

  • BKXtoZERO

    Living the TVIX life Sir! Indian buffet is on someone else again. Life is good.

  • BKXtoZERO

    Kishore, I think it is called “NOT HAVING A FUTURES ACCOUNT”.
    also, margin requirement is 23% on CL so that would be 31.5X1000 or 31500$ then 23% would be 7245/contract which I actually could afford “more than a few of” 😉 no sweat. I just don’t have a futures account. OK?

  • BKXtoZERO

    short both at same time?

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

    Yeh, when price chops around like this, I’ve noticed it beats up both sides. Plus the contango takes a chunk too. Can’t do a big position for obvious reasons in case things start trending hard. Anyways kind of moot as I can’t get shares to short.

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

    I was actually thinking about yr long oil play and if you can find shares to short of the 3x inverse that would be a better play. But keep in mind you can easily get blown out of the water if things go the wrong way so you can’t have anything larger than a small position. When I say blown out of water, this is account destroying blown out of water. I’m sure you know the math already

  • ridingwaves

    gap filled.

  • BKXtoZERO

    Pole question: Who here hates the fact that I post my 3X ETF/N trades? majority of member votes and I will keep my trades to myself. I really don’t want to be a bug while I know y’all have futures accounts etc. also, closed UWTI for big 1cent loss, Crude looking bearish to my lens. Not worth holding imho

  • OzarkHillBilly

    Meh. I messed with the market today because winter came back and I can’t play outside. I might have made a whole $10 so far.

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

    just another tool.
    It helps me when what APPEARS as an imminent, waterfall crash, is actually a pullback to longer moving averages. Sure enough, days later, that area served as support.

  • CandleStickEmUpper

    Covered 4161

  • tradingmom

    Didn’t follow my plan at all! Of course, maybe filling that gap will turn out to be more bullish. But, closing down here is seriously bearish.

  • Time Bandit

    WTF? You’ve been posting your trades and your results all while trying to become a better trader. There’s nothing wrong with that. It shouldn’t make a rat’s ass difference to anybody else what you’re trading and it doesn’t.

    For the record, just has I had a great day yesterday, I’m having a shitty one today. Only one of my positions is hitting my technical stop so I am closing it at COB. Two others are not at my technical stops yet. Regardless, I’m taking at least partial profits on these at the COB.

    Lastly, I got my balls busted a while back because I said that the GBP/JPY was my favorite. Well outside of Newb, I haven’t seen anybody trade this thing, all while it has been an absolute GOLDMINE to me. If you’re making money to your satisfaction and striving to become better, that’s all that matters.

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

    I’m neutral. I’m a leech. take what I can grab.

    3X though? really? – only ‘hate’ to see you crucified some day.

    https://img1.etsystatic.com/000/0/5763662/il_570xN.351514721.jpg

  • Kishore Kumar

    Yes, an epitome of an ideal man with wife and children to match!
    We all may be seeing our own reflection in Al?

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

    was GBP/JPY your ‘workhorse’? I have lots of horse photos in the wings.
    😉

  • Time Bandit

    Was, always has been and still is. :)

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

    I play guitar and someone asked me why I like Jazz. I said if you like music, there is more of it. There are key changes and new tonal centers every few seconds. If you like chocolate, go with the double brownie Sunday…… I like trading things that respond quickly for a intra-day and very short term swing basis. It’s hard to play something slow moving looking for a long daily trend when there is a lot of chop. Not for everyone….. I ain’t preaching what thou else oughta do.

  • Billabong

    Talking of goldmines …. ABX

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

    Im cool with it. I dont trade crude almost at all so I like to see what others are doing

  • Billabong

    We bust your chops on 3X because we care … Your lens can tolerate 3X moves and it’s fun to see how you do when you share it with us.

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

    Can’t argue against that. But I see one possible hole in the logic.
    “you like”. Liking is important. It fires the engine of your actions.

    Ask the question: Are you good at it, or are you getting better? I like options, but I suck at it. Lots of fun. but lose lose lose. Liking creates drive but not guaranteed success.

  • BKXtoZERO

    account at 45 degree angle for a few years now so getting better yes. Thanks to things learned here.

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

    near closing time.

    Remember last week that little DUST drama,? $5.04 was the likely bottom?

    NOT.

    http://stockcharts.com/h-sc/ui?s=DUST&p=D&yr=0&mn=2&dy=0&id=p72478694642

  • BKXtoZERO

    also, not sure if you saw my rules but I have a 10% trailing stop on MYSELF. any 10% correction on monthly balance and I take a well deserved vacation.

  • captainboom

    Heh. I’ve never been across, but I’ve been under it a few times on an aircraft carrier.

  • http://evilspeculator.com Sir Mole III

    Poor thing!!

  • BKXtoZERO

    wuz day only play idea :-) wooda worked.

  • http://evilspeculator.com Sir Mole III

    Could have been worse – you could have lost $10 :-)

  • http://evilspeculator.com Sir Mole III

    FYI – I’m on the fence about the Zero signal today. A lot of swings both ways – this could easily snap back tomorrow.

  • BKXtoZERO

    I see. I can’t short anything which sucks because I would LOVE to short TVIX (intraday only ever) but there is no 3X long vol

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

    yes, I read them. didn’t memorize them.

    soon you shall be a shaolin priest.

    https://i.ytimg.com/vi/dzBIGv9atPo/hqdefault.jpg

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

    linear? I guess a leech can’t complain.
    rumor is the subs, go ..parabolic!!!

  • Time Bandit

    After a great start to the week yesterday there was nothing but Cold Ice Water in the Face from the Market today. Today’s stormy sea also killed just about the entire load of crab caught yesterday.

    I’m now up only $23 for the week and have to think long and hard about only putting my Pots out after 3 PM. I’ve Been wasting way too much fuel watching waves slash around during this bad weather.

  • Kishore Kumar

    It is good to learn from your experience without risking my own money.

    I would have never compared the leverage difference between /CL and UWTI until you brought the topic up and was very happy to learn that /CL gives 2 to 1 leverage over UWTI, besides offering smaller spreads (as percentage), better control on entries and exits at probably lower commissions.

    Personally, I don’t even trade /CL because a rumor can move the price a lot and it is $1,000 profit or loss for every $1 move. Comparatively, /GC is only $100 per $1 move but the moves can also be much larger than /CL.

    It takes a lot more money to move the stock market during RTH compared to the amount of money it takes to move /ES outside of RTH. The market has a Fly Wheel sort of effect on /ES during RTH. Threrefore, I trade only /ES only during the RTH and feel good about my control on entries and exits and short time exposure.

    My only hope is that others, looking at you making thousands of $$ with ETFs, taking big trades, deploying huge amounts of capital, will not feel enticed to duplicate your super exploits, only to probably fall flat on their faces and then blame you.

    Personally, I dare not even try what you appear to be so good at doing, despite my “inherent gambler’s DNA” which has been a real pain to overcome.

  • CandleStickEmUpper

    Sorry to hear, at least you’re still up for the week, and the week is still young. I’ve had that happen many a times. Now for the next few days, if you dont see any real hard evidence or trend, don’t put on any revenge trades!

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

    Bust or Boom. this is what I like to hear. Reality. Trading isn’t the e*trade baby life.

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

    wooHoo, featured comment!!!

    I’m a rock star in the making.

    http://img04.deviantart.net/a683/i/2013/024/d/8/cute_guitar_hero_by_x3chibix3-d5sjzdo.jpg

    he he

  • BKXtoZERO

    after 3PM? so want to avoid intraday gyrations and focus on closing prices more?

  • Time Bandit

    Thanks Candlestick,

    I would be a liar if I said this one didn’t sting. Yesterday signaled the possibility of the end of a draw down. Having these large one day gains wiped the very next day really sucked. In the past, I might have stuffed what I’m feeling right now and probably make a mistake later on because of them. Instead, I will allow these feelings to flow through me and move on.

    I follow my rules very closely with only limited areas that I can use discretion so I’ll just plug away. Revenge trades are a thing of the past as well because I have learned that fighting the markets is a losing proposition. The saving grace is that I had traded correctly.

  • Time Bandit

    Yes, absolutely. The vast majority of my entries and exits are at the close so why put myself through the ups and downs if I don’t have to.

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

    Yeh the snapback possibility is why Im staying flat. When SPY volume is at the bottom of its range all kinds of random stuff happens

  • Time Bandit

    I actually made my bones in trading learning from Stewart. :)

    https://www.youtube.com/watch?v=uK0ziaFHMFM

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

    Yeh my fantasy is to see 3x long/ short VIX ETF’s and be able to short both

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

    That’s a good rule BKX

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

    Yeh I did something not as big but equally stupid back in the internet bubble. Brings back memories!

  • BKXtoZERO

    does that kind of imply that this is something inherent to the US market? I am not a statistics/historian kind of a guy. I haven’t watched CL enough overnight to see what the rest of the world does.

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

    No.
    but he certainly traded options.
    =P

  • BKXtoZERO

    he is encouraging you to post even more now……….

  • Time Bandit

    In a way it does. It depends on what kind of chart that I’m taking trades from. No matter what the time frame is – 10 Minute, 30 Minute, Hourly, Daily, or whatever, I have a rule (with rare exceptions) not to make a trading decision until the current candle has completed.

    I’m trading from Daily Candles so I use MOC orders (Market on Close) for my entry and exits on anything that is traded in the US Equity Markets. I’ll usually put the orders in anytime between 3 and 4 PM. If it’s a close call I’ll just do a Market Order at the last minute.

    The real CL close is closer to 2:30 PM but continues to trade in AH. The coresponding ETF’s continue to trade right along with CL until 4 PM as well.

    I also use the Daily trading Forex. A Forex Daily closes at 5PM EDT. Forex trading is pretty thin at the close so sometimes, I might wait until 6 PM or so to place a trade based on the 5 PM Close. So that’s it.

    I found this style and time frame to be the best fit for me. I’ve tried 6, 7, and 8 hour charts and what this did was mess up my sleep up to to the point to where I felt shitty all the time so it just wasn’t worth it to me.

    The one thing about using Daily charts is that it’s possible to back test 20 years worth if the vehicle has been trading that long.

  • BKXtoZERO

    Great post by TK. Yes I look there, not every day though: “Psychologically, something I’ve discovered about myself is that FOMO (Fear Of Missing Out) completely dwarfs the fear of seeing profits evaporate. I never really contemplated this until late last December”. and so on, Basically the woes of a bear who was up twice and watched green slip away. This is huge for me. For me, eradicating this mind set is the single biggest helpful change I have made in the last 2 years. I literally used to wake every day expecting the market may not even be there. I was such a bear tard I couldn’t get short fast enough with any money I could scrape together at any entry. It was this exact phenomenon of seeing big green then big red that FINALLY got me to realize that even big moves happen in steps with give back. Mole also was a huge factor for me in developing some patience. I would watch set up after set up and be surprised when the market was still there the next day. I have NO fear of missing out on a huge gap down or up, one way or the other any more. There will be other things to trade. Also in my rule set. My rule set also has “a bird in hand is worth 3 in the bush”. I am not claiming to be super smart here. I really am not. I have done better for sure and want to be better still but reading this was seeing a part of myself I had almost forgotten existed thanks to Mole.

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

    Price moved above the ceiling into the attic.
    and promptly got slammed.
    We’ve seen this a few times in the past few months. (rectangles)
    no victory for the bears yet.
    Bulls better get it in gear, those long term MA’s are pointing down every day.

    ‘Night.

  • Objectively_Bias

    FOMO is and probably always will be my single biggest weakness. When I get that anxious urge to place a trade, I try to visualize the ocean and its endless waves.

    FOMO on a single move in the market is as silly as expecting the next wave coming in to be the last. In fact there are countless numbers of them always coming and going.

    Perspective is everything in this game.

    Thanks for sharing.

  • Objectively_Bias

    Anyone know a source and cost for historical intraday $TICK data going back 5-10 years?

  • hellbent

    EXPONENTIAL! :)

  • phylum

    “There are old traders and there are bold traders BUT the are no old bold traders”

  • mugabe

    He certainly didn’t have any fear of missing out on the bull market because he was bearish nearly all the way.

  • CandleStickEmUpper

    Nice drop overnight

  • mugabe

    I’m not complaining:)

  • Billabong

    Didn’t we all … party hats … go’in to the moon.

  • mugabe

    on margin ….

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

    Surprises to the downside

    Muwahahaha.

    EDIT: Go go gold!

  • randomuser6789

    And if you HAVE TO catch this wave in order to pay the bills, you should not be trading. I have fallen victim to that sort of thing too.

  • http://evilspeculator.com Sir Mole III