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VIX Reversal Signal
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VIX Reversal Signal

by The MoleJanuary 26, 2009

UPDATE 12:52pm EST: Since I have to post for two now I will start to post some analysis during the day as well. This way I don’t get stuck with having to post in the afternoons every single trading day.

Something I completely snoozed on was a clean bullish VIX reversal signal last week:

Remember those rules that Berk taught us back when:

For a $VIX confirmed signal you need 3 things:

  1. a close outside of the 2.0 Bollinger Band (20 day, SMA
  2. a close back inside the 2.0 Bollinger Band – this issues the signal
  3. a higher close (sell) or lower close (buy) than the close of the day back inside the 2.0 Bollinger Band – this confirms the signal.

Once you get those 3 things a major reversal usually occurs within the next week. The sell signals are far more accurate than the buy signals.

Okay, we got a buy signal and so far it’s holding up. The wave count I slapped on also seems to point to a scenario where we push higher in equities, and then drop massively as Mr. VIX embarks on its 3rd wave to the upside.

I love it when things all come together – let’s keep monitoring this situation closely. I’m waiting for the lower band of the Bollinger band to swing up towards the price (and VIX to drop lower), giving us hopefullly the opportunity to see a reversal sell signal (i.e. buy on the VIX).

UPDATE 3:09pm EST: If I hate anything more than expiration weeks, it’s FOMC weeks. You can basically run errands on the days before because you will not get resolution in one direction or the other. I picked one of those short VTAs but got kicked out with small profits. For now I’m just sitting and watching as I’m sick of trading those 0.5 signals. Just look at the Zero line of the recent week – it’s completely flat and I will ignore any signals below 1.0.

Anyway, this is what the turtles used to call ‘ping pong tape’ – so, unless you’re a daytrader sit back and watch the show. And don’t expect any clarification until tomorrow when the whole FOMC kabuki theater reaches its finale.


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 the usual social media waterholes.
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  • etechpartner

    Dankeschoen ! I appreciate the compliment. For once things seem to be going ok. Lets hope I dont get in there and mess it up πŸ™‚

  • Sal

    Great signal today on ZREO. Currently flat

  • C.C. Rider

    I was harping on the vix all last week and nary a comment. Sheesh! πŸ™‚

  • cnbs08

    Repost:

    Okay……time to step back up to the plate and buy some SRS and SKF again……unless of course you believe that today is shaping up to be a trend day…..meaning we explode much much higher…….

    I don't think we do……jmho tho.

  • C.C. Rider

    Geckoman,
    The PPT is a derivation of CBOE put options 10 day MA as a percent of the 30 day MA. When the 10 day MA skews too high, the signal strengthens. Hope this helps.

  • cnbs08

    I think it's pretty clear that wall street has it out for ken lewis…….they never liked the guy………like a bunch of opportunistic scavenging vultures circling overhead now………thain is part of the wall street culture and it almost seems like a well orchestrated plan to bring down the behemoth which was BAC.

    Just buy SKF!

  • http://evilspeculator.com molecool

    Sorry mate – I have been working 16 hour days (including this weekend). It’s impossible to look at every single comment and follow every link. Wish it wasn’t so, but I’ve got a lot on my plate.

    I’d appreciate your input, you know that.

  • El Gato

    Some feel commercial real estate is the next shoe to drop. I don’t entirely disagree. Many hedgies are short, so the trade is somewhat crowded. SPG is a possible candidate.

    Kass is still short Education stocks……….and I have expanded my position in DV. Numbers are out tomorrow, so I am keeping it smallish

  • molecool

    Well, a great signal I call a 3.0 or higher – but I know what you mean πŸ˜‰

  • DrNo

    More quick dancing by a CEO ,who tripped in the current enviroment.They were not as smart as they pretended to be in the bull market ,and refuse to take the blame in the fall.Chief D-Bag at Leh has sold his house in Hobe Sound to his wife for $10.Arrest him and her RIGHT NOW!

  • Rangertrader

    Mr Evil speculator, I am a long time reader of your blog and slope. I find your blog extremely valuable to my every day analysis. I just wanted to tell you how much I appreciate your time and effort in using this blog to comunicate to people like me. Thank you very much. Please do not stop your work on here. thanks again

  • C.C. Rider

    No problem, I just want an EVIL SPECULATOR coffee mug for my contributions!

  • cnbs08

    BAC is heading down into the low $3 area……where will C be then?

    They should lock up Cramer while they're at it. He's one those guys that gets away with pretending not to know…….only when it's convenient. SEC where are you?

  • Anonymous

    I imagine that they all go to .50-.75 pink sheet crap ,just like fnm de ,and aig.At least Cramer dies everyday instead of being told how great he is by the underlings.They all belong in jail ,capital punsihment for capital size lies!

  • Vardoger

    You are becoming quite the hype machine yourself… LOL

  • cnbs08

    Yeah but the difference is I don't come out on tv with millions of viewers following my every word………some would argue that there are blogs with such status and impact though……

  • http://evilspeculator.com molecool

    Coffee mug? You got to be kidding me. I was thinking more along of these lines:

    http://upload.wikimedia.org/wikipedia/commons/5/57/Klassischer-Flegel.jpg

    Only question is where to put the logo….

  • Sal

    Zero just issued a sell signal. Let s see what those mouth breathers will do at this point

  • Anonymous

    cramer sees a calm week ahead short everything lol πŸ™‚

  • cnbs08

    I'm thinking good old ben bertanke will give us just what we need to get the snowball rolling down the hill on wednesday……….have faith in ben, has he ever let us down before………

    So maybe we get some more whipsaw bs over the next day or two…..while the bulltard vacuum comes on in full force to suck in as much money as possible from unsuspecting bulls…….and then maybe one last final fakeout post fed decision before the real plunge…….jmho as always….

  • etechpartner

    Repost… missed the new blog entry before.

    Went short at 847, then got nervous and closed at 842, then went short again at 841 (on a rip) . Mainly based on the information provided by 2sweeties with confidence bolstered by Zero. As the signal kept going down I was feeling more comfortable. Now if we actually start to see some short VTA from the indicator I will increase my position a little more.

  • http://implicittrading.com Implicit Trader

    meh’. it comes and goes.
    instead of waiting for an exit signal, i got out as soon as the Short
    VTA went away.
    until we get out of the past 4 or 5 days trading range, imo, its
    better to be extra cautious

  • Erikd

    molecool your $VIX analysis lines up with T.B. s line below 46.50 area on the $VIX as well…

  • jacksoo

    Mole – appreciate all the great work – difficult times for you but stick with it, you're building a strong following of quality contributors.

  • krazykev

    Hey Mole & Gang . It’s time to short these declining earnings pop . GOOG stop 332
    AAPL stop 92

    P.S – Follow me to the road of riches guys . My annualized return last year was 800+ % in 2008

  • Douala

    Confused about coolmole …$VIX confirmed signal

    Since the long candle upwards [one he has marked reversal] closed higher than the down candle before it, wouldn't it be a “sell signal” from his rule #3? Yet he says “Okay, we got a buy signal and so far it’s holding up. “

    Could someone straighten me out? Thanks!

  • molecool

    Thanks Erik – when did he post that? I didn't see it…

  • molecool

    Look at you – kicking butt today πŸ™‚

    Tret' dem ES in den Arsch!!!!

  • molecool

    Actually I'm seeing a bit of an upswing here in quality comments. Still not enough symbols though. I see a lot of talk and hyperbole but no trades. Wished I saw a daily flow of great entries/exits. I can only do so much…

  • cnbs08

    BAC went from being up over 11% to possibly ending in the red…………huge gap filling reversal. JPM, GS, USB…….etc etc ………all pretty ugly looking charts………..

    SKF and SRS anyone?

  • molecool

    Wow, real estate is really tanking in that neighborhood πŸ˜‰

  • ISLDGUY

    Mole, XLF ain't doing it. $BKX down 3%. I think down.

  • molecool

    But somehow the game continues unchallenged. Just shows you guys how many suckers there are out there. That's how we make our money, folks – like it or not.

  • http://greedangerignorance.blogspot.com DJ

    Bought spy march 75 puts at 2.72

  • Erikd

    thur/fri. blog comment last week

  • SRSFinance

    AAPL looks great here, thanks for reminding me. Run up to resistance on dying volume. I've been waiting for a chance to short this. A gap up to the 50-day average tomorrow would be ideal.

  • standard_and_poor

    This is the only thing I come with for wave count, the abc flat after wave 1 interm. wave 5 may have just completed or is about to at 38% rtmnt. level or close to it, if correct next move is to 730. One of many possible scenarios, I'm ready either way.
    http://www.screencast.com/t/GDQukt1F

  • HungryNewt

    It looks like a Beautiful H&S on POT on the 60 day 60 min chart

  • SRSFinance

    Alright Mole, JPM, GS. Might want to wait and make sure they don't have more last hour shenanigans though. As it stands now, ugly.

  • Teito

    I am not touching financials (via UYG or SKF)… Unless I love to gamble I would buy either. My only play thus far is TBT (inverse rates of TLT)

    TLT seems to have broken a key level $107
    http://stockcharts.com/c-sc/sc?s=TLT&p=W&b=5&g=0&i=t09735589520&r=238

  • HungryNewt
  • molecool

    Please read those guidelines again.

  • etechpartner

    Saw a VTA on the Zero w signal of roughly 2.0 – added another short position. Because of the averaging effect between the additions my price is 837 at the moment. Thats actually not bad, even if we did a 10 point upswing.

  • molecool

    Neckline is slanted to the downside, which weakens it considerably. HOWEVER, my MACD and stochastics seem to like it. I might grab a small position here.

  • Douala

    I did several times…for some reason I am not following it.

    #1 was the small upward candle with the long tail
    #2 was the long red candle downwards
    #3 was the long upward candle which closed outside the band which you marked reversal.

    So since it closed higher it is a “sell signal” according to rule #3 ….but in your write up you say
    “Okay, we got a buy signal and so far it’s holding up. ”
    This is where I am lost. [sorry..one of those days I guess]

  • krazykev

    Wow , looks like the Sizzle got turn into the Fizzle ! LOL

  • geckoman

    Q's in a bearish rising wedge? WIll it break or hold? http://bit.ly/2U5NOE

  • cnbs08

    If the indices all recover from here and push higher into the close, just know that it's all part of the master plan to lure in more suckers…….in an effort to convince them that it's time to buy dips again……so that there's more money to steal on the way down……..

    And if we don't recover today, which also a very realistic possibilty, then maybe they want to switch directions ahead of bertanke and trap some bears to stick it to on the fakeout rally they'll probably give us on wednesday/thursday.

    Shenanigans at play…….might be smart to step aside for those that don't like whipsaw……

  • http://implicittrading.com Implicit Trader

    LOL

  • BalaB

    Mole,
    Grabbed one contract when Zero hit -2.5

  • Anonymous

    Switched from long to short on the short ETA that was going to clearly stick.

    I have a feeling, though that this will switch back to long by tomorrow noon.

  • Teito

    TLT coming down fast…

    πŸ™‚

  • DZZ

    Watching gold tank

  • Ron

    I spent time studying the Zero more today. Is there more analysis since Dec. 10th? Also, if there is someone using it to trade real $$, I would be interested in knowing the general result. Thanks. πŸ™‚

  • Publius Federali

    Little confused, where did the signal go? I still see the long red and orange lines on the zero.

  • cnbs08

    Yeah bc to make things fair and transparent would mean the end of wall street…….and who would want that?

    I just don't think media outlets such as cnbc should be allowed to be active players in the continual fleecing of sheep……they are supposed to be neutral throughout the process right? SEC where are you……?

    Ok let's back to making money.

  • C.C. Rider
  • jacksoo

    Couldn't you argue that we've broken thru a downtrend and might now retest – ?

  • etechpartner

    Ok couldn't help myself Had to jump out of the ES trade at 826. Even through the Zero still has a VTA at the moment. I am trying to break my habit of messing with my profits in an attempt to “improve” the situation. Summary: Short 2 at 847 based on 2sweeties and TK over at SOH. Then added 1 more short when we had the VTA on the Zero (yes Mole I was one of the people who grabbed that one so thank you) – and then closed all at 826. I suppose it is possible we get another leg down but I would be careful entering that. This has been my first clean trade in over a week. One in which I got in and out clean and unscathed. Whew. Hope there will be more to come. In the meantime.. woohoo !

  • C.C. Rider

    If you wanted to you could, but that’s one sick chart.

  • cnbs08

    SRS and SKF are about to explode higher imo……just use tight stops in case that's not the case……..

  • Turps

    On my CFD chart for gold, I get a line from the high on 17 Mar and 15 july is just about bang on for the high today at 916.

  • http://implicittrading.com Implicit Trader

    well…that’s it for me….
    going home with (measly) profits
    until we get a trend, I’ll sit on hands.

  • DrMalaka

    They have been exploding for the past three trading days according to you. That and your pure hatred of all the CNBC clowns is all we hear.

  • Keirsten

    Still long GS and POT with tighter stops, as I’m still very green.

  • alphahorn

    back into dnr for a 2nd time today, just formed a cup and handle intraday, see 2 min chart, and is breaking to upside

  • http://alphahorntrading.blogspot.com/ alphahorn

    i got stopped out of my AGU a bit ago, made a nice profit but it fell below its 50% retracement, though i see it has recovered a bit, oh well

  • alphahorn

    anyone looking for a long candidate check out ROC trying for a second time to break resistance at 8.20

  • Keirsten

    It’s pretty tenuous up here at this point, but the volume isn’t convincing me either way yet. Looks like a pile of AGs are fighting with that 50 EMA.

  • Vardoger

    Are you looking at RIMM?

  • BalaB

    Nice.

  • Keirsten

    Nice and paranoid. I need the money for a shrink after trading last year. LOL

  • molecool

    Good show, balab – quit while you're ahead on days/weeks like this.

  • cnbs08

    Ok a little early on the SKF and SRS but I think they close higher than current levels as we see a little fallback in the indices……

  • Keirsten

    I'm not going to trade it as it probed that breakout today at 50.22. Lots of support at those swing highs from '06 – '07. Still looks like it needs to give a little more back, what says you?

  • molecool

    LOL – always does what nobody expects – hehe…. That metal has cost the nerves of many traders, which is why I only handle it with welding gloves.

  • Erikd

    XLF holding above 8.70 two days in a row is a signal to go long ST – follow this level into the close today.. I AM long.
    upside down Roof Top pattern playing out nicely

  • Keirsten

    I was thinking about you this weekend when I stumbled on a chart patten page. This is a good link for those who love patterns.

    http://thepatternsite.com/visualcpindex.html

  • molecool

    I go there all the time – also has good candle patterns.

  • katzo7

    Just got a chance to look at the f**king markets and read comments, especially the Molecool summery at 3:09 pm. I agree f**king completely, looks like another sh*t/chop day. Not worth it to trade.
    Got kicked royally in the a** (where are all of these f**king asterisks coming from?) during the last sh*tty week.

  • Erikd

    have his enclopedia of chartpatterns.. he needs to add my Roof Top Pattern 8>)

  • DrMalaka

    Are you missing some vowels on your keyboard, there sure are a lot of asterisks.

  • cnbs08

    If the indices close incrementally in the green, they would do so on really pathetic volume. Not very comforting for the bulltards……

    Maybe an opposite move tomorrow, bringing things down to levels that suggest that we've broken down and headed lower only to recover and close at levels that leave us in complete uncertainty. A little headfake to the upside followed by a headfake to the downside…….classic.

  • katzo7

    F**king maybe!

  • Keirsten

    This is what my keyboard looks like Katzo

    http://tinyurl.com/dfxmy5

  • tfyisrich

    Will enter 1/3rd position in TZA at the close if spy stays above 84.

  • molecool

    I can empathize with that sentiment πŸ™‚ But let's not get frustrated – even this shall pass.

  • Sal

    Awesome. Thank you. You are contributing. This rat is grateful.

  • Vardoger

    I think I’d rather be a buyer at 48.25

  • Sal

    upside is confined to mole's orange wedge. Pay attention here this could be the top for the day. Mole you rock. This rate is happy in the sewer and loving your ZERO signals

  • cnbs08

    The next few days look pretty simple……..

    If we don't break above this morning's highs on the indices, then we don't have higher highs to build upon and back down we go……to see if we set lower lows or stay within a tight range for a little while longer before the true breakout.

  • cnbs08

    Hey mole,

    I think the FOMC announcement is on wednesday……not tomorrow. It's a 2 day meeting that'll conclude with the announcement on wednesday 2:15pm EST.

  • Erikd

    higher lows over the last 4 days…$SPX http://screencast.com/t/nn91MSzYy7

  • cnbs08

    Higher lows are only half of the pie…….without higher highs, you have the makings of a bearish penant………and throw in a few false breakouts to the upside for good measure and you have the stage set for a nice big plunge into the abyss……exerting maximum pain on bulls that bought the breakouts incorrectly……

  • katzo7

    Nice Keirsten.
    Can you make better trades with it that way?
    If you say yes, I will immediately do the same.

  • estrdr

    Great site Molecool! Keep up the great work and charts.

  • ZigZag

    After a sh*tty day like this…I think we all need a little laugh..

    http://www.youtube.com/watch?v=0p215rO0B34

  • GMunni

    I guess I'm a day trader because I found lots of opportunity today – although the tape is one f'king mess. Either we have a bigger triangle still forming up B and C to follow or we have 1/2, and i/ii which could either be part of c of B, C of 2 (if we're heading for the depths) or the start of larger C to take us much higher (although this doesn't have the right look yet). As it stands now, I'm not taking new positions and just going to manage the ones I have until the tape clears up.

    Shorted PAAS this a.m. and would have short gold if I wasn't already short in an initial position. Traded around my AUD.JPY position and watching my initial EUR.GBP position.

    Mole, you mentioned the other day that you don't currency trade. I think you may want to dip your toe sometime since I really think at some point our kind of trading is going to be marginalized by the powers that be as per the discussion on the SOH over the weekend. I can't see how they can tax that – although they'll try.

  • Duuuuuude

    TLT…..What do you think guys? 104 or 100? I am not trading TLT but TBT, but using TLT and US1600 charts for the trade.

    http://screencast.com/t/fCYksa7Ofow

  • GMunni

    Just noticed the VIX is looking impulsive over the last month and has retraced to 61.8%. I would watch it closely tomorrow for more impulsive action.

  • GMunni

    lol How blind am I – didn't even see your VIX chart. Yep that looks impulsive. Wish I'd thought of it…

  • http://evilspeculator.com molecool

    Thanks for your input, GMunni. Hey, could you point me to that weekend discussion on SOH? I missed it…

  • maya

    thanks Zig Zag
    2 week ago you put out a chart and was saying that we might be in the wave 5, do you still think that?

  • molecool

    Thanks mate – that sounds right as it's usually how they do it.

  • GMunni

    The alternate count I would put on your VIX would be A in place of (c), (a) and (b) in place of the current (1) and (2) with the finish to B and then C down to come yet.

  • Kim2523

    Question: Does Berk's 3 things needed for a $VIX confirmed signal work only on the $VIX , or can you apply it to all stocks?

  • malusDiaz

    Amazing! thank you! I would give +10 for that!

  • nyse

    If you were to buy SKF calls, would you buy Feb or Mar? I agree that it is set to explode to the upside, but i am (a) a bit concerned with timing, and (b) wondering what will 'tip the scale'. Wells Fargo announces tomorrow, I believe. Any thoughts/Targets? Thanks

  • etechpartner

    +1 Thats a cool page. I was suspecting that Eric coined his own pattern names but lo and behold there is the roof… da roof ,… da roof is on fire….. ok now I am just silly. I had the first good day in over a week.

  • etechpartner

    I don't know enough about the mechanics that are at work in letting the air out of this bubble. I would be interested in any comments that Mole may have about this. He has encyclopedic understanding of correlating factors that drive the market. Some day I expect him to post ” the farmers in Bakersfield have struck oil, TBone Pickens will be out of business and so I am shorting USO”. Well, maybe not quite that drastic but you know what I mean.

  • Fujisan

    Check out GBP/JPY – it had made a much more explosive move than AUD/JPY today. It just made a turn today.

  • Duuuuuude

    Yep…..that is what I am waiting on!

  • Duuuuuude

    GOOG against a higher retracement level just a week after posting a lower low and appears to be failing to make a higher high. This is a tempting short here with risk easy to manage. Puts are not expensive right now as the IV is low. Should the price pop above $330, exit the trade.

    http://screencast.com/t/hrNcXKLB

    Buy 270.00 March Put for $6.50 GOU-ON Delta .16

    Target $275
    Stop $340
    Risk $ 2.72
    Risk Reward greater than 3:1
    Prophet on trade $8.80

  • Insect Overlord

    “And don’t expect any clarification until tomorrow when the whole FOMC kabuki theater reaches its finale.”

    I think it's “bukake” not “kabuki” — FYI.

  • minion of the ppt

    Mole live on video over at the slope, I think he's counting waves. Nice robe

  • molecool
  • molecool

    Well, Bollinger bands are often used to determine entries and exits. This particular configuration is VIX specific.

  • molecool

    You also don't seem to see my question (above).

  • mrktneutrl

    uhmm…I am not touching this. πŸ˜‰

  • Duuuuuude

    I am old enough to remember this Kabuki……….. http://www.youtube.com/watch?v=5g-Uxr1a5gU

  • GMunni

    Sorry about that Mole. When I hit refresh it took me to my last post blocking your comment. I'm not sure how to point to specific comments about an article within one of Tim's posts, so here's the blog and if you do a search on Toad37 he started it about 2/3's of the way down.

    http://slopeofhope.com/2009/01/25/lights_please

    It has a link to the article there as well but I can't access now for some reason. It now wants me to join to see it and I don't want to join. Hopefully you can see it without joining.

  • cnbs08

    Sorry it would be irresponsible of me to post any specific targets with regards to options…..but nice pic……looks familiar?

  • GMunni

    Good point. I hadn't been following that pair closely. I have looked at it in the past and right now I'm confused by the long term wave pattern so until the short term clears up the likely direction I'll just be watching. I'm also wearing some exposure to GBP with my EUR.GBP play so that's enough for now me thinks.

  • ZigZag

    Two weeks ago I was pretty sure that this was indeed wave 5, but now I have a triangle pattern that keeps taunting me. I think a close above $860 would send us higher, and any break of $800 and we test the November low.

    This count has us in a wave 5 going straight down. http://tinyurl.com/87q4vc

    This new count is showing the triangle pattern. http://dl.getdropbox.com/u/312885/SPXtriangle.png

  • poopsquad

    you probably should be covering TBT longs in here. i think 104 is the furthest we go, around 2.80 on 10yr notes. at which point I will be waving in TBT puts. this is a consolidation/pullback in a bull market. don't get sucked into the bubble talk.

  • Fujisan

    EUR/GBP is a good pair, currently on W4 with a target of 1.01~1.062 by Feb 13. I don't see a particular wave on AUD/JPY but I'm expecting that GBP/JPY just turnerd the corner and move onto W4.

  • nyse

    I understand and would not rely upon your recommendation unduly; just trying to get a sense of your opinion as I know you follow this stock. No big deal…guess I will consult my runes πŸ˜‰

  • molecool

    How about you give me passage of text, so I can search for it? There are hundreds of comments.

    You can also post an empty reply to one of the posts – after that just send me the URL you get back.

  • Duuuuuude

    A pull back in Bonds you mean?

  • Fujisan

    It's “???”, Guys!

  • Duuuuuude
  • GMunni

    There is a window of opportunity for this count. The cycle timing is here or is due very shortly for MCD to break. http://tinyurl.com/dlc9ej

  • de3600

    starting to lose my mind asking the tape http://www.youtube.com/watch?v=VOrWXsDOC4o

  • GMunni

    Actually I'm on the other side of you on the EUR.GBP. I projected a top at 98 based on Fibs and it was. My projection was based on a B running flat scenario so I expect a large retracement for this pair.

    That's what has me confused about GBP.JPY, since it took out the multi-year lows with that last move under 130. This may just be a retest of the break so watch 130 carefully.

  • Kim2523

    Thanks you!

  • Fujisan

    GOOG is on its way up, not down, currently going through abc correction heading toward W4 high made back in Nov 4. Look at Feb call/put ratio and open interests. There are more call open interests than put, meaning that the stock likes to go higher. If you like to short it, wait until it hits $340 level.

  • Fujisan

    Are you telling me that you went short at 98 and still short at this point? With such a huge leverage, I would never give in that much of a profit hoping that it would go flat.

    I have a very tight stop with a currency trade and as soon as it goes lower than yesterday's low, I'm out.

  • poopsquad

    yes. long bonds rallied from 4.50 to 2.50 almost uninterrupted. we are now 3.38. I view this as a retracement and consolidation. the risk from here is still to lower yields as deflation remains the current threat.

  • Fujisan

    GBP/JPY – I agree, it's hard to pick W3 bottom, but if it goes up tomorrow, that would be a good basis to assume W3 bottom.

  • Duuuuuude

    Thanks for the reply. Per my rules, I couldn't short it at that point because it will have made a higher high.

    Could you post a chart with the wave counts?

  • GMunni

    I missed my entry due to the holidays ie. I wasn't around so I entered on the retrace to 96 short, rode it down to 90.5, traded around a little there, and then rode it long back up to 92.5. I'm short with 1/3 of a position right now from 93 which is OTM but I'll let it show me the way or show me the door.

  • standard_and_poor

    That was cool, thanks.

  • standard_and_poor

    You're very credible in video, ever consider politics?

  • BigHouse(Aka Mr Vix)

    Looks like overnight futures have a good lift

  • http://greedangerignorance.blogspot.com DJ

    Where can I see GOOG's Look at Feb call/put ratio ?

  • http://greedangerignorance.blogspot.com DJ

    pick up march calls. feb we (mkt) go up…..

  • Fujisan

    Well, you have to go through them and manually come up with it.

    At TOS, you can add “open interests” column next to each strike price so that you can gauge a market sentiment of that particular underlying stock.

    If you pay a close attention to the strike price with the most open interests, it works almost like a “magnet” and the underlying stock tends to be drawn to that particular strike price, and that's how you can predict the strike price at the expiration (I normally ignore any strike price with a value less than 50 cents).

    There is a reserch done by Stanford as to why and how the underlying stock/index tends to be drawn to that particular strike price upon the expiration, but in any case, GOOG is know to be expired in 50s (it used to be like that – I don't follow GOOG any more) and a perfect candidate for a speculative butterfly — and so is SPX.

  • BigHouse(Aka Mr Vix)

    Overnight action still going up.

    http://screencast.com/t/LdfBavtiz

  • Fujisan

    I started blogging only this week and I never posted a chart yet. I will post a chart as soon as I figure it out.

  • Duuuuuude

    Get Jing to post charts. It is free, and very easy to use.

    Here is the link. http://www.jingproject.com/?gclid=CN6-srLrrZgCF

  • http://greedangerignorance.blogspot.com Deej

    thanks

    ________________________________

  • standard_and_poor

    “S&P’s Culture Corner Show” sponsored by the EVIL SPECULATOR.

    Crazy times: after a day such as today I just want to sit back on a comfortable couch, eat some cheesy puffs, and play some music videos. This one is dedicated to all the lovely lady rats out there, well you’re not really a rat like I am; just trying to go along with Mole’s theme, after all he is the show’s sponsor. This lovely song and video is “stolen car” , and it’s for you ladies (guy rats can also enjoy). The songstress pocesses a haunting sultry vocal quality combined with unique instrumentation that makes you want to jump all over the replay button, I know I do.
    http://www.youtube.com/watch?v=qWoMq46g0XU

    Here is also a lovely visual. This is a painting of Adele Bloch-Bauer, by Gustav Klimdt: an Austrian
    national treasure (yeah I know Mole, just like you (German, Austrian, Swiss blah, blah,and now perhaps even part yank)). She
    (portrait) now resides in NYC, it took $135 million to cajole her trans-ocean transfer.
    Her portrait is laced with gold leafing. Gold, as you are aware is very popular now, and so is
    Adele in my book.

    http://www.screencast.com/t/HA8K21W5Xl

    There you have it, two lovely treasures to carry into your slumbers.
    Good night !

    P.S. If you enjoyed this evening’s programs please tell our sponsor, as we don’t look forward to a pre- mature cancellation of our show. As it is, we have the back-breathers from the DISQUS (they make us capitalize it) Ministry of Culture filing all sorts of nasy injunctions to try and prevent our broadcast. We’re working on a small budget with an even smaller allocation of intellect
    and culture, the show will improve as it progresses, we promise. I and my behind the scenes assistant ,Ms. Jane Hathaway, are doing our best.

  • http://www.chartsandcoffee.com chartsandcoffee
  • etechpartner

    Duuuude on closer examination I have decided to sell the TLT put I have been holding since about 117, its almost 30% green. Thats good enough for me at the moment

  • mrekim

    It looks like ~855 was the strongest support level in Oct and Dec. Shouldn't that now be looked at as a possible key resistance level?

  • etechpartner

    For what its worth I am holding 1 short ES over night. The entry could have been better. Its at 833. If we spike to 847 or thereabouts I will add another one.

  • maya

    thank you so much for your great work

  • Duuuuuude

    I agree…..I will follow you out on this one. I think I I got in at 114, so you have me beat. What a good trade!

  • Fujisan

    Thanks, will do….

  • ZigZag

    Don't fall in love with the upside! I think.. πŸ™‚

    http://tinyurl.com/apj2ze

  • cnbs08

    I think my opinion is clear as to direction…….adjust your stops according to your profit/loss expectations and timeframe.

    All of my posts today should make it pretty clear as to what I think may play out over the next week or so. Breakouts are not to be trusted, whether they happen to be to the downside or upside, until after the fomc……and then and only then should we start to expect some resolution and a definitive move out of the current consolidation zone…..but not without one last fakeout as they dip into the pockets of all the suckers one last time for good measure. Isn't that what they always do after a fed rate decision even if the market saw it coming from a mile away?

    I'd say by the middle of next week, most of the uncertainty as to which way we're headed should be filtering out and we'll be back to the usual steady, one directional news flow to push the market further in the opposite direction of all the suckers and wrong sided traders. And all of it will of course will be brought to you live and in stereo with complete transparency and integrity as always, courtesy of the fabulous cnbc “all stars” and crew. LOL……

  • http://spnakr007.blogspot.com/ Steve

    Million Dollar Traders http://www.youtube.com/watch?v=lZc0fLZ4EQM
    Check 1:18 mark… I still do that sometimes..LOL!

  • El Gato

    MLM looks ready to slide hard in home plate

  • moneyfarm

    Duuuuude. Thanks for the chart. Been looking at GOOG for a short too. I would look to enter around 330 with tight stop.
    http://screencast.com/t/z5bxHb1zoc8

  • moneyfarm

    Some short ideas:
    LULU – looking to short at 7.40, tight stop
    http://screencast.com/t/dwVLI13cA

    HRS – Nice retrace back to neckiline; I have March 45 puts on this
    http://screencast.com/t/ecrJoFlCW7V

  • C.C. Rider

    One long idea, reports next week or the week after.

    http://stockcharts.com/h-sc/ui?s=MMS&p=D&yr=0&m

  • Insect Overlord

    HRS looks pretty sweet…if it can make it up to $46.50 that would be even better! Nice find.

  • http://evilspeculator.com molecool

    NEW EVIL DEED – AMERICAN STYLE!

  • molecool

    Sorry, I copy/pasted it from somewhere else.

    ???

  • molecool

    Du hast ja Nerven…

  • PatrickK

    ouch… that looks vicious! 125's hard to ignore, even with Oscar's mug looming. LOL

    thanks Zig, love those charts.

  • Insect Overlord

    This is what I see…market futures are approaching shortable levels again if you missed going short during the day. And they seem to be doing so with a pretty defined move. Will they reverse? As one who was considering going short, my concern is a few things…1. the yen is getting down considerably right now and is pinned between S1 pivot and the VWAP.

    http://screencast.com/t/tVPwqggI

    A break below the S1 pivot would be encouraging for the bulls to say the least. I like to look at the $CPCE…

    http://screencast.com/t/9tjF1lCs

    For all of 2008, whenever the PPO line hit -5.0, we had a reversal to the upside. We're not quite there yet. Granted the market may be changing, but until I get proof that this little confirmation is no longer valid, I will treat it as so.
    Top all this off with mole's most excellent rehashing of brother berkshire's $VIX-based trigger to go long that was met today, and I think that I'm going to be very cautious about going short. Plus, everyone seems HOPEful with the new President, and the FOMC meeting coming up may provide a sucker's pop to the upside on Wednesday.
    I may “chill” on my short ideas and wait until I get more alignment of various signals.

  • Fujisan

    I'm impressed. Are you tri-lingual?

  • BigHouse(Aka Mr Vix)

    LOL

    +1

  • http://www.evilspeculator.com berkshire

    Mole, just so you know, that IS NOT a confirmed buy signal in the $VIX… Missing a MAJOR component… Be sure to check your notes…

    SkΓ₯l!

  • etechpartner

    Nein. Ich bin verrueckt.

  • http://www.evilspeculator.com berkshire

    Mole, just so you know, that IS NOT a confirmed buy signal in the $VIX… Missing a MAJOR component… Be sure to check your notes…

    SkΓ₯l!

  • etechpartner

    Nein. Ich bin verrueckt.

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