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Trend Bending Continued
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Trend Bending Continued

by ScottMarch 12, 2017

Traders are always trying to work out what happens next. But in the process of becoming convinced of something we actively block out information which doesn’t fit with our narrative. We become openly hostile to those who have an opposing view. We become biased.

predictions

It’s extremely tough to avoid this. Myself, even after 7 years in permabear recovery, I still don’t like being long stock indexes and have to force myself to take the setups as they appear. Deep inside there is a part of me that wants to see it all burned down. Taken to an extreme is the kind of idiocy you see at the slopeofhope, where the internet’s 3 remaining bears huddle together for warmth, wanting to be right and not rich. I hung out there for a little bit, and the stink is tough to wash off.

Our job as traders is to interpret the never ending flow of information in the now moment. Let’s look at the price action on Friday.

2017-03-13_04-15-26

Some things I want to point out. We talked in the previous sub only post about the importance of how a move starts. The kickoff to this rally is the Trump election, and a historically strong move that day, 1000 dow point round trip closing at the highs. Since that day we have seen volatility decrease.

Stated more correctly the character of the move is a LOW VOLATILITY MELT UP. These moves, you see on all timeframes have certain characteristics. It’s covered in more detail in the subscription section today but the bottom line is that in low volatility upmoves, counter trend setups just don’t work. The reasons are quite intuitive when you think about it, and if you want to know more about them – PAY THE MOLE!

Another illustration of the strong kickoff principle we discussed last week is in the 30 year bond, which when correctly back adjusted shows a clear breakdown from a trading range in the direction of the now primary trend. This is a big deal, and with the rate rise anticipation being the big news all eyes will be on this market in the coming week.

breakdown

The bond markets (all correlated) look to have a confirmed downside breakout. If you are looking for victims to trade intraday, look no further than ZB and ZN intraday.

And now moving on.

Let’s talk about trends, as they end.

Trends generally end in one of the following ways

2017-03-13_05-09-32

I’ts 4:08am here in Japan, and I got up early to drop some knowledge on you before I get on my flight back to Australia today. I’m happy to do it, but it’s not free. If you want access to all my stuff (and I’ll be around for a bit after Mole gets back so you will get both of us) Now is a good time to subscribe. Like I stated yesterday, if you subscribe to any of Mole’s services and you aren’t satisfied with the value I provide, I’ll up the guarantee and personally refund anyone their month subscription, no questions asked.

This guarantee lasts until I land in Australia, about 20 hours from now, so if you want to subscribe risk free, now is the time.

I personally believe this place offers some of the best trading value on the net, and I have paid for it myself before I was an author here. I don’t get that money, I have no dog in the fight. I just think it’s fair you should chip in to keep the place going. Subscribe here.

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I have to jump on a plane, but I’ll continue on with this when I get back to Australia.

Questions in the comment section

Scott


About The Author
Scott
  • Tomcat

    Many think that Oil will find support between $44-46, I continue to believe it will go lower, the [lack of] fundamentals are too strong…

  • Tomcat

    Where is everybody???

  • Ronebadger

    I’m in the NYC blizzard area…we got mainly slush here with freezing rain and 50mph gusts. Kinda nasty

  • Tomcat

    Ohhh boy, who would have thought Stella would be such a b*ch.

  • johnb

    I love the charts you’re using here. It’s world’s easier to see them. Thanks

  • Ronebadger
  • ridingwaves

    looks similar bottoming out as Nov. pattern with possible star formation below 200sma
    if you went bullish on that candle it would have paid out well

  • StockTalker

    Nice down signal on the hour, could be it.

  • Yoda

    Great post master Scott

  • Darkthirty

    What are you using for signals, timeframe you’re trading?

  • Darkthirty

    We’re getting lake effucked on the south end of lake Michigan.

  • BobbyLow

    I think you’re correct regarding Oil fundamentals. Congrats on sticking with your short Crude Trade. Looks like I missed a good one.

    Fortunately, I was able to pick up 3 other vehicles that are more than making up the difference. BTW, I took a -.53R Loss on my last NG trade and flipped to short this morning. My Short Silver is up +4.4R at this moment and will be closed by the COB today. I don’t want anything to do with metals on Fed Day tomorrow. :)

  • StockTalker

    Down she goes

  • Yoda

    Lol at the “Mole goes on vacation” label on the zero

  • Billabong

    I saw the discussion yesterday regarding ICE and was wondering if /DX has also evaporated from the TDA platform. It has become a non-recognizable futures index….

  • ZigZag

    yes it’s ICE also along with some of the softs. you can contact support and they’ll hook you back up for 2 weeks, but will charge 110/mo in April

  • Billabong

    Thanks very much for the info…

  • http://evilspeculator.com Sir Mole III

    Question – what age range are you in? I’m not being facetious – this is a serious question. If the majority of our readers prefer light charts then I’ve got no issue in changing them. We did a poll a few years back and it was about 50/50.

  • http://evilspeculator.com Sir Mole III

    Snowageddon?

  • http://evilspeculator.com Sir Mole III

    110/mo – those fuckers – you better be trading those symbols actively otherwise it’s $1320 pear year just for the pleasure of getting the feed.

  • http://evilspeculator.com Sir Mole III

    It was spot on this time.

  • Ronebadger

    windy, rain here on Long Island…60 miles north is getting up to 24″

  • http://evilspeculator.com Sir Mole III

    The tape is looking positive BUT the Zero is still a bit ambivalent. I would be cautious here about buying the dip. Let’s see what the close brings:

    https://uploads.disquscdn.com/images/e902f50c252e29607893f1b1bd0103ef47b37f67101b47e7b7c2d42cd9d4cf5d.png

  • http://evilspeculator.com Sir Mole III

    If you haven’t yet sign up for my Twitter feed!!

  • Tomcat

    Too late, I am already neck deep with BTFD.

  • johnb

    Sir Mole III I’m in the age range of perfect eyesight. What, ha ha, are you implying?

  • BobbyLow

    Well that was a first. LMAO

    I just got back from my Dentist and was there longer than anticipated. While waiting for a temporary crown to be installed, I realized that I wasn’t going to be home in time to put in a MOC order to close out a position. So while lying in the dentist chair, I took out my trusty smart phone from my pocket, booted up TOS and changed my order from a Stop to MOC and was confirmed. The dental assistant looked at me kind of funny but it does show that this business can be done from anywhere. :)

  • http://evilspeculator.com Sir Mole III

    You may just get away with it 😉

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

    Added 1/2 of my energy allocation to XOM and APA for a multi month hold. Added short term position in XLE and will look at add XLE long term at some point. Still holding in order of size, BIDU, LVS, FCX, YRD, SOHU, TWLO
    https://uploads.disquscdn.com/images/e5b0dbaf7adcd416105dc66ea5083952e98603bb70f8f830694eef87ab837e8d.png . https://uploads.disquscdn.com/images/b7bfe2b105f8f19b028c0a60e87a116d3b87c74b57875f66e636b7b167f41023.png

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

    Also looking to buy GLD on weakness EOD tomorrow/ Thurs, if we get weakness

  • BobbyLow

    Might see weakness if the Fed actually follows through and increases rates. But we’ll see if they actually walk the walk or continue to talk the talk.

  • Yoda

    USD finished the day at an important inflection point IMO. It can go both way from here, but the bulls have the advantage for the LT trend continuation.

    https://uploads.disquscdn.com/images/75cb0b1487ff0cc233acad4ed0e063b85ca98c786843d8fb9a14c35232d8c90d.png

  • Scott Phillips

    Your charts need to come with an epilepsy warning 😉

  • ZigZag

    I’m not paying $110/mo for the privilege of being one of four retail traders getting picked off by bots. I’ll just trade something else til July.

  • Tomcat

    Can we put the post’ charts or even the ZERO background colors up for vote? Mine would be light charts.

  • Scott Phillips

    Guys and Girls – I landed yesterday in Australia, caught up on some sleep, and I’m ready for action. I’ll have a new post for you (continuing the system building) by the time I wake up.

  • ZigZag

    I prefer light charts also.

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

    Last 2 times they raised there was a big move down that day or next then a move up. Only sample size of two so who knows

  • http://evilspeculator.com Sir Mole III

    What, you didn’t write a new one on the plane? Slacker!! 😉

    Glad you landed safely. Hope the new wife likes it down under. Must be quite a cultural change for her.

  • http://www.captainboom.com/ captainboom

    @ridingwaves I notice that OSIR, one of the symbols you had mentioned in the past, got delisted from NASDAQ after the close on Friday. That’s a world of hurt for anyone holding them.

    http://www.osiris.com/wp-content/uploads/2017/03/2017-3-10-Osiris-Press-Release-NASDAQ-Delisting.pdf