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Valencia!
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Valencia!

by The MoleMay 11, 2012

After ten days of being tortured by street musicians offering a very limited repertoire of Vivaldi we left Madrid behind this morning and took the high speed train (AVE) to the magnficient city of Valencia. What can I say – it’s absolutely gorgeous over here – although Madrid as the capital stands on its own I think I may just like it better here.

We rented a very charming apartment in the center for a whole month, which henceforth will serve as the official evil lair. The first thing I did was to to do an Internet speed test and I am happy to report that connectivity kicks some serious butt over here. The area we’re in is literally paved with little coffee shops, restaurants, bakeries, you name it. All in all I’m a very happy Mole right now and I’m not missing Los Angeles one little bit.

I have been ignoring equities for the past few days as there really was not much to add to the support clusters I have pointed out on various charts. I would like to revisit some of my charts today however as the dynamics are slowly shifting. Basically the bears are wasting a lot of time right here and momentum may just swing the other way. I’m not fully convinced just yet however and I will show you why.

As you can see the spoos have been dancing the polka on my 100-day SMA for the past few days. A decisive breach here really was necessary to hand momentum over to the bears and once again they seem to be blowing it.

My volume profile chart shows me a deep volume hole at 1330. What does that mean? Well, even if we drop from here then odds are that we’ll see momentum fizzle out quickly near that cluster. What may be necessary is some weekend screw the longs gap that pushes us below that. Otherwise I’d say good look to the grizzlies. But there is more.

I have not shown you my medium term RSI_EMI chart for a while because there was nothing to see. We are now however back in bounce territory – at least judging by previous fractals. It’s of course possible we see a repeat of an August 2011 wipeout but those seem to happen very rarely.

Also suggesting a loss of bearish momentum is my Market Maker Mind Reader 1 – a proprietary volatility ratio indicator I concocted a few months back.

The MMMR2 seems to agree. Now that does not mean a continuation down here is absolutely unthinkable but at least market makers seem to be pricing in a little bit less risk here.

I would be amiss to not show you the one bearish chart that may eventually trump them all. The weekly spoos chart looks like as if we’re going to get a close below that NLSL and that is medium term bearish. A bounce may happen on Monday or Tuesday but if we drop below again by the end of next Friday then I think we’re going to see some fireworks.

And before we move on to commodities and forex I really wanted to point out that picture perfect bearish divergence on the Zero Lite today. Granted, we didn’t have a super strong signal but that divergence was very pronounced. Unfortunately the Mole was unable to trade it as he was sitting on a high speed train. Truth be told – I had 4G the entire time – I just didn’t want to risk losing the connection in the middle of a swing trade. Anyway, if you weren’t a sub then you really missed out – a situation that can however be easily remedied.

Silver – that was one sweet entry and we’ve enjoyed the ride. But if you’re still in this then it’s time to say goodbye and call it a trade.

Gold jumped into the fray a bit later – but who’s complaining – we nailed that entry and it’s officially at target. Now we are going to watch for signs of a bottom but I’m not ready to get positioned just yet.

Not all setups go our way however and I will never claim that. I got stopped out of a low probability but low risk setup today but wanted to show you this chart for another reason. As I have developed a pretty good feel for commodities over the years I told everyone to only take out a very tiny position here – first up it was a low probability setup and second commodities do not move like stocks. They often overshoot and when they do it happens in a big way. This is a good example and it’s exactly why I only took out a handful of contracts with a tight stop nearby.

Alright – before I let you enjoy your well deserved weekend I do have a few more juicy setups for you. That’s right, the Mole is always on the prowl – please step into my Semi-Medieval Ersatz Lair:

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More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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And as usual the good stuff is over on the commodities and forex side. Coffee is sitting right at resistance in the form of that 25-day SMA. But what really caught my attention was this:

What is this – the 20th inside day we’ve been trading in the past month? Sorry if I sound like a broken record but if something’s working – don’t change it! You know what to do.

How do you like them apples? Inside day on the AUD/JPY – but if I am not mistaken we als may have ourselves a retail variation buy setup here. That one would kick in on a breach of today’s highs (also the long entry for the ID).

And if you have a Yen craving then I have the very same setup for you over on the EUR/JPY. Same rules – same play.

That’s all for this week – see you Sunday! Assuming of course I can scrape a few charts together – what are the odds of that? 😉
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Cheers,


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Anonymous

    Walking this tape down but ZL is weak. Bear trap!

  • Anonymous

    closing up everything. resetting.

  • http://practicalt.blogspot.com/ Darth_Gerb
  • Anonymous

    It’s so cool that Mole is on another continent communicating with us in “almost” real time.  Ah, the wonders of modern technology….

    What ARE we going to do when the schvitz hits the fan???

    http://www.cnn.com/video/#/video/us/2012/05/09/sot-myers-solar-flares.cnn-nasa

  • Anonymous

    Im looking at the EUR/GBP and it didnt make it.

  • Anonymous

    I was just thinking that after this morning’s high, it’s traded like a trend day. None of the 5 minute divergences worked, and it’s been in negative territory all day.

  • Anonymous

    Newb,

    Missed the entry buddy. Sold off at the 50 instead.

  • http://practicalt.blogspot.com/ Darth_Gerb
  • Anonymous

    Soy bean? Thx.

  • Anonymous

    Will take the next bounce. Should have a long way to fall.

  • Anonymous

    Ya, just tagged the trend line on the hourly:) Bitches!

  • Anonymous

    Yep

  • Anonymous

    Firebats? what the hell kind of name is that?

  • Anonymous

    No worries. This trade just got started!

  • Joe_Jones

    Hey Rats. Hope you are banking coins. I’ve gone quiet the last few days as I’ve been busy taking care of my newborn son. Also, I had not much to say about the tape, but was observing it with an ironic smirk from a distance . I still have my core short position which I haven’t touched for weeks now. Less intra-day trading actually does wonders to my account. I think the trend had changed to down, and I am using a STFR strategy on Nasdaq, at least until the dungeon masters announce more QE. Perhaps in June??? When that happen I’ll be long precious metals. 
    BPSPX has been a great indicator so far to get rid of the daily noise (thanks DG). Ahead I see copper trending down, VIX and Bucky really bullish with expanding BBs, as well as further risk off (AAPL and SPX’s 20 sma crossed below the 50 sma, and are still below their daily acceleration lines). Add to that the absence of flushing to the downside (TICK and Zero), no buying participation when we hit the 100 sma on SPX, as well as expanding BBs, and finally the big boys talking the market down. So from what I see, I think it’s worth risking some shorts over the w-e. 

  • Anonymous
  • Anonymous

    Congrats on a healthy newborn son. 

  • Joe_Jones

    LOL!

  • Anonymous

    JJ! I’ve miss ya man! Congratulations!

  • http://practicalt.blogspot.com/ Darth_Gerb
  • http://evilspeculator.com molecool

    That’s awesome!! Your own make-shift favellas! 🙂

  • Anonymous

    I see from your post that you often short GBP/USD, it does seem that EUR/GBP is looking a bit stretched, do you think GBP will drop to catch up with Euro or Euro rises more for the pair? love to hear your insight

  • http://evilspeculator.com molecool

    Congrats mate – hope he/she comes after his mother 😉

  • http://evilspeculator.com molecool

    In recent days I have been pondering about that myself. The stuff I do now would have been impossible just a decade ago. Took a long time to get to this point but life is pretty good – no complaints.

  • Joe_Jones

    Thanks AMC. It’s a major life changer but one that is definitively worth it.

  • Joe_Jones

    Much thanks Saints51.

  • Joe_Jones

    Fits well with the next EU ECOFIN / EU Summit, heh ?
    http://www.zerohedge.com/news/greece-next-next-steps 

  • Joe_Jones

    LOL! Thanks Mole. BTW, your new lair rocks!!!

  • Anonymous

    Your doing it right. Enjoy life. I have people tell me all the time why I want to leave the USA when it is the greatest country. I ask them if they ever been to another country. Majority say no and my response is well how the hell can you make that assumption. Thats frickin retarded to even say something like that. Typical pawns of the system.

    I have been eying Costa Rica for the family and me. I hope to make a move this year sometime. Good thing about CR is the same time zone I am currently in which is central time. So not a drastic change when I trade. My Spanish sucks so need to get it right. I don’t want to be like Chevy Chase in the Euro vacation reading from a book saying dumb shit in another language because that will be the scenario if I don’t learn it soon.

  • Joe_Jones

    obligatory link: 
    http://spaceweather.com/

  • Anonymous

    Valencia looks awfully good Mole … and paella valenciana is named for it! …. btw, on your weekly equity chart, seems the S&P actually *did* close below 1359 … you’re saying a repeat of that next week trumps all your positive-tending charts & indicators .. ?     have a good time in espana … LJS

  • Anonymous

    Pffffft, it doesn’t even have a moat! 😉

  • http://evilspeculator.com molecool

    First up and for the record – I love the United States and in particular California. But in the next few years things are going to be very rough over there and I just don’t see a need to be around for that. Yes, Spain is fucked too but here we have public transportation and functional infrastructure. Everything is brand new and even if things get put on hold for a decade I don’t foresee the type of fundamental issues that California will be facing.

    I also think that what will happen in the U.S. will be tough but long term good for the country as a whole. Things have to get very very bad so that the populace wakes from their fifty year trance of complacency. The two party system will have to be dismantled completely and it will take a huge crisis to accomplish that. The entire political system needs to be exposed for the sham it is

  • Anonymous

    Mole I love my country too. I don’t want to leave but I just really want to make life a journey. Try something new. Now another reason is i try and speak the truth to people but it falls on deaf ears. I get labeled radical or other stereotypes as you can imagine. Frankly I am tired of trying to make people aware of whats going on. Their more interested in stupid shit like American Idol or some other nonsense on their TV. Thats all you see on TV and why I don’t watch hardly shit anymore. I am just tired of fighting. I fight cocksticks on a daily basis like my Senator. For example, today I called and discussed the NDAA…fell on deaf ears and get an email saying so sorry(if anyone wants to see it I will post it,let me know). I show up sometimes but I am not a corporation so fuck the little guy. So I am to the point why bother. I am trying to do whats right for my children’s future by just giving them a chance for one yet it seems like it wont work. it depresses me how our country’s view is all about materialistic things and what a celebrity is doing. Just useless bullshit to keep the illusion intact. The common people just don’t see yet its all there. Sometimes I believe they don’t want to know and thats just them being selfish. 

    In summary I am trying but it is not working. it depresses me to a point where I am saying the hell with it. Let God sort them out. I feel like this some days and today is one of them. When I wake up I will fight again for what is right. Just makes my heart sad knowing whats coming if people don’t wake up.

  • Anonymous

    picked up 25 more silver eagles yesterday….debt will not cure a debt hangover…I bought paper for New Century back in 2000 and saw the bubble coming…the exotic paper was being created there…it was a R&D lab for creating illusionary homeowners..I walked when overruled on decline of double bk applicant that was beginning to build his next bk with a 500K house…the house of cards is being held up by London whalers while throwing out FASB rules…implement glass steagal and life becomes real again..

    Costa Rica is nice…I rented a home in Ojochal and enjoyed every minute of it…but it has issues too…Equador or Panama might be worth a look also…Uruquay is also on radar…I like beef..

  • Anonymous

    Mole when you calculate Net Lines I thought it was starting with three up or down candles. You seem to allow a mix? Reckoning by the tutorial here there are only expired NLs on the weekly further down, and the only on the monthly is the 1259.75??

  • Anonymous

    I agree that Glass-Steagal would be a huge win for the people if it was reinstated but the powers that be will NOT let that slip away easily. They spent a lot of money on politicians to get rid of it. It will be a very hard task to reinstate it.

    I will look into Uruguay and see what it offers. I checked into Panama but not for me as of now. I agree Costa Rica has its issues but what country doesn’t. I do like beef also and heard CR does not have good beef unless imported from Argentina. In CR they do not age their beef so its tough from what I here from a few ex pats.

    Ridingwaves I also have been buying silver when I can. People need to transfer some of that cash to physicals when they can. Its been dipping and now is a perfect time to buy. Instead of dropping 200 or more into a 401k I have cut back a little and spend 100 dollars at least on metals every couple of weeks. You will be surprised how fast it adds up. I am not giving financial advise by any means just stating what I have done.

    Appreciate the feedback.

  • Joe_Jones

    just for laughs:

    President Obama goes to a primary school to talk to the kids. After his talk he offers question time. One little boy puts up his hand, and Obama asks him his name.”Walter,” responds the little boy.”And what is your question, Walter?””I have four questions:First, why did the USA bomb Libya without the support of the Congress?Second, why do you keep saying you fixed the economy when it’s actually gotten worse? Third, why did you say that Jeremiah Wright was your mentor, then said that you knew nothing about his preaching and beliefs?Fourth, why are we lending money to Brazil to drill for oil, but America is not allowed to drill for oil?”Just then, the bell rings for recess. Obama informs the kiddies that they will continue after recess.When they resume, Obama says, “OK, where were we? Oh, that’s right: question time. Who has a question?”Another little boy puts up his hand. Obama points him out and asks him his name. “Steve,” he responds. “And what is your question, Steve?”“Actually, I have two questions: First, why did the recess bell ring 20 minutes early? Second, what the hell happened to Walter?”

  • Anonymous

    Not trying to start a political debate, but I just wanted to put the “why aren’t we drilling in America” meme to rest. Anyone who says this (not you JJ, I know you are just relaying a joke) has never been to North Dakota and has no idea what they are talking about. The Bakken play up there is just off the charts for growth. Having grown up there and now working at an oil refinery that gets crude from there (and Alberta tar sands) I have some understanding of the scale. To say it is huge is an understatement. They are currently producing 500k bpd!! That is fucking a lot. To put that in perspective it is twice as much as Prudhoe Bay (though less than Alaska as whole, soon to change). Suncor is one of the largest Canadian tar sand producers and struggles to maintain 300k+ bpd, and only 500k bpd if you include there parnterships with some other majors. The expectation is ND to be the 2nd highest producer by 2020, behind Texas. Friends and family up there say that whole area is literally the wild west: huge man camps, drugs and crime, locals leaving for the bigger cities away from the production areas. If you wanted to be a real estate baron or just own a strip club and bar, the opportunities are incredible. Sometimes it takes a picture:

    http://www.midwestenergynews.com/wp-content/uploads/2011/11/bakken-from-space.gif

  • Joe_Jones

    From what I read, North Dakota is the only state that hasn’t been affected by the recession. Different folks out there. I like the strip club idea. LOL! I would call it the Evil North Pole.

  • Anonymous

    I heard 2% unemployment. People coming from all over the nation to get a job. I think ND will be as alien to them as they are to the natives…

  • http://twitter.com/khkp11 Half Shaft

     And for more laughs, this joke is originally from Russia, about Putin.

  • Schwerepunkt

    Oil and gas exploitation are up under Obama compared to the Bush years. Of course, that is mostly private industry’s doing. One can argue whether Obama should get the credit, but it is intellectually specious to claim exploration and development have suffered under Obama. 

    In my own view, it is better to pump everyone else’s oil and keep ours in the ground for as long as possible. I’m thinking of the end-game here 25-years from now. “Drill, baby, drill” is just stupidly short-sighted. 

  • Schwerepunkt

    No, that’s a prototype for Newt Gingrich’s lunar settlement. 

  • Anonymous

    Australia mate! Join Scott. Sure their housing will crash but thats good for you! Public debt/GDP around 10% you got at least 50 yrs before Australia becomes California.

  • Anonymous

    North Dakota has a different bank system.

  • Anonymous

    Yeah man Wheres the alligators and molten tar to stop the people with pitchforks?

  • http://practicalt.blogspot.com/ Darth_Gerb
  • Anonymous

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/561f0b94-56f0-4635-af94-d0d3d29ecfd9/2012-05-13_1043.png
    Ok Im back. This is my setup. Very simple. Blue is a buy order and orange is a sell order. no loyalty just trading.

  • http://evilspeculator.com molecool

    “huge man camps, drugs and crime,”

    See, I prefer huge women camps without the crime 😉

  • Anonymous

     They have those too, they are called strip clubs. Apparently Vegas strippers are flying up to ND to make big money.

  • Anonymous

    Question to everybody: how many guys or girls trade here for a living?
    Meaning have to other job on the side, but just have trading to pay the bills, travel etc.

  • http://evilspeculator.com molecool

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