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VWAP Reversion Galore
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VWAP Reversion Galore

by The MoleJuly 31, 2009

10:30am EDT: Okay, this is getting ridiculous:

Island tops usually resolve once you’re half way inside the gap. The question you need to ask yourself is this: Do you really want to trade this tape? I am still sitting on my August puts but the way we’re ticking I’m starting to have doubts that we’ll see any downside any time soon – very tempted to dump those turds and escape the emotional roller coaster. It’s been over two weeks of this – I am emotionally exhausted and the bears remain MIA.

If they can’t even get this gap closed you got to re-evaluate your odds. When’s the last time we’ve seen a forced sell off? I frankly can’t remember – it’s been nothing but up side for two weeks. Should we drop by about now? Abso-diddly-lutely! For about ten days just about – not happening. Yes, eventually we’ll see downside but by then we might be ramped up so sky high or burned so much theta that it won’t matter. However, I have come too far to let this thing go right here – and I will have to follow the example of the samurai in that only in embracing death can you achieve victory.

Anyway, if you’re watching the NQ or the ES – the old VWAP reversion game continues. We are above on both right now, so further upside seems to be in the cards.

10:50am EDT: I just received an email from one intrepid rat, which I would like to share:

I really try to stay out of your business Mole, but Lester significantly brings down the quality of your blog.  His problems, typical of most addicts, affect all members of the family. Cleaning
house should include all problems.  I’m sure I am not the first to  say this, but he has become far more than an amusement, distraction, sad case everyone wants to help.  And he won’t get better. Fuck’s sake, how many months has he been given opportunity?

I have been sitting between a rock and hard time with Lester. In some ways I felt bad for him and had high hopes that he would start learning his lessons at some point. But as I (and many others) have pointed out in the past – Lester has a gambling problem and I’m afraid he won’t ever get better. We all told him several times to seek help and it seem that he simply ignores any advice that has been offered and continues to burn through any cash he can get his hands on. I’m very tempted to cut the cord but decided that I’ll leave it up to the community to decide. Please vote in the new poll I just put up – I’ll do whatever the group decides by Monday.

1:00pm EDT: Okay, I’m worn out – not only is this tape a major pain in the ass but on top of this all this happened this morning:

  1. Website crashed and I was spending 30 min with my hosting company getting it running again.
  2. Disqus seems to have problems today as well – what’s with the huge icons?
  3. My SMS gateway suddenly stopped delivering.
  4. NinjaTrader crashed because it couldn’t deliver the emails due to problem #1.

I’m mentally exhausted – let’s just get this day over with – nothing but VWAP reversion anyway…

Oh, and I meant to talk about FX when the damn site went down:

Those are some HUGE candles – I sense a major disturbance in the force. I tell you right now though that the pounding in the Dollar is quite bullish for equities.


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.
  • http://sshamster.blogspot.com/ Anonymous

    Good Afternoon to all (and specialy Herr Mole)

    I’ve been following (although not always agreeing with) this site for a while (since April)

    I must thank you for introducing me to EW and:

    1. I don’t know if despair is in order, yesterday we might have had a very small 1, 2 and 3, and today, so far, 4, 5 of 1 and currently treading A of 2

    2. Here I must ask you all to bear with me that the end of wave 5 of 3 was the surrender of last november . Therefore we could be doing a ABC wave 4

    a) A was the spike to 1k (from 740)
    b) B was 666
    c) C should be 1,618 around 990 or 2,618 around 1190

    3. Any Comments?

    Best regards

    p.s. I also have the Harry Harrisson books (and a couple of thousand of others)

    p.p.s. I own an hamster (or I’m her slave depending on the point of view)

  • mediatik

    well they just killed the bear case for today

  • disrespekt

    maybe this market will burn out like we all have

  • thelefteyeguy

    i noticed that too Mole…shorted but got stopped out…it looked like easy money for a second

  • TenYear

    every spike gets a dive.

  • mediatik

    If this sh+t continues im gonna start beleiving in all of that market manipulation GS ppt illuminatie new world order bullsh+t

  • annamall

    I think we are all burned out, no matter what you are trading. IMHO i wouldn't hold those puts over the weekend the theta burn you will get at this point will be gathering steam.

    We both called for SPX 1000 by today or tomorrow, so why not let go of the emotional craziness, cause it sucks.

    You know those bulls want it really bad.

  • Bankrupt

    why is that? they just put him to sleep 😉

  • byhiselo

    there's something to be said for easing the pain…but you well know the minute you sell your puts, the market will reverse

  • Douala

    mole

    Let me quote Bill Cara [The Trading Wizard] from his morning comment section today.

    ~~~~~~~~~~~
    In yesterday’s Daily Report, I did not shirk my responsibility to tell the truth.

    We believe this uptrend will eventually give way to a substantial decline, one that will be aided by a bevy of Black Swans, ultimately unnerving even the most ardent of Bulls. But that moment has not yet arrived, and until then, all we can do is try to pick up a bit of performance here and there, keeping our risk to a minimum.

    ~~~~~~~~~~

    I say hold them and dam the consequences. When this baby drops it will be like Black Monday of 1987. Remember Cara has seen all types of markets from the 70's on. Just my 2 cents…..

  • annamall

    They enthunized him!

  • Bankrupt

    exactly. they want it too hard. when I want something too hard I get punished.

  • lester

    that would be me.

  • http://trading-to-win.com/ DavidDT

    Mole – did you go short UE 1.4180? – so far I am spot on

  • Bankrupt

    cmon now, you are fantasizing, nothing like that exists…

  • mrclam

    Mole, maybe consider selling some puts(to create a vertical spread) to reduce the effect of theta burn on your positions?

  • Vardoger

    V8- Perfect channel on the /es 1-min intraday (open til now)

    Really bro?

  • mediatik

    Ive been a lurker on all these blogs kenny, dan, tony, tim, atilla ( if thats is real name ), mole , mahendra, even a guy named cyclist on kitco forums, and in my humble opinion no one as a clue and most everyone are completely confuse by this tape action

    Now bears are becoming bulls, news week headline the recession is over, even doctor doom is now doctor less doom and more less gloom

    And now this talking about beiing burned out, depression ect…

    If this isnt capitulation well i aint french ( im from quebec look it up )

    Were at a top, people this is it either were in a bull market and whe have to admit it to ourselves and lose the money we have invested hoping for a drop ( still holdin some FAZ from april , my ass still hurts )

    Or this is the top of the bear market rally

  • lester

    I am gonna be out all next week. I may pick up a SMALL Oct SPY position in case a black Monday type balck swan event occurs while I am gone. I would not wanna miss catching some of that. I can always sell after vacation if market continues to ramp.

  • http://trading-to-win.com/ DavidDT

    imagine what will happen if they cannot get it being so close?

  • Vardoger

    Have you seen the OI on the SPY 1000?? 232,000 calls vs. 12,000 puts. He prob couldn't even find a buyer!

  • http://trading-to-win.com/ DavidDT

    I confirm – no such thing as Russian Mafia

  • annamall

    Good idea Clam! (or just close or else theta will eat up premium even if market goes down)

  • annamall

    they might commit Bull suicide! LOL

  • http://www.facebook.com/screasy v8muscle

    Does anyone want to tell me wtf is going on or where the hell the trend is?

  • http://trading-to-win.com/ DavidDT

    you've been visiting wrong blogs :)

  • mediatik

    Im getting dizzy watching this tape

    Im out, im calling my Girlfriend i need a BJ

  • Bankrupt

    you holding FAZ for 4 months?

  • annamall

    hahahah that's coming from someone who knows right? 😉

  • thelefteyeguy

    no trend…like the all the recent Fridays…after the 1hr…ppl just start the weekend 😉

  • annamall

    The market can stay solvent allot longer than a person always. (it likes to take our $$)

  • molecool

    LOL :-)

  • faafa

    Newbie trying to watch the tape and learn. All I'm getting is more confused.

  • Iguanadon

    Set the robot systems on Auto-Trade and start the trek out of Manhattan.

  • mediatik

    i am an idiot i know no need to remind me, its too late to cut loses so ill die with this shit, i was lucky enough to place so good bets on oil, nat gas and metal companies in march so im not complaining

  • molecool

    We are bears mate – just a bit frustrated after a historic and relentless bear squeeze. But I'm still holding my puts, n'est-ce-pas? 😉

  • thelefteyeguy

    awww….happy ending

  • mrclam

    Lester, by small I hope you mean far less than 10% of your account! Stop trading 50% of your account in options! Any strong trend will wipe you out!

  • Iguanadon

    Unfortunately for you, this is the exact wrong time to try to learn anything related to technical analysis. Nothing is working the way it used to right now. Be nimble and when in doubt, sit out.

    I need to start reading what I type….

  • annamall

    Dollar getting taken out to the woodshed for a nice beating!

  • annamall

    hahahahah! touich'e Iggy

  • thunda72

    Lester's posts aren't as asinine as Katzo's were, at least.

  • molecool

    Theoretically yes – but if we get a drop here it'll be fast and hard and spreads won't offset any of the losses I've taken for two weeks now. After all – I would be offsetting vega as well – might shoot myself in the foot this way. This would have been a better idea further down.

  • Keirsten

    It appears they're just keeping this contained between S1 and R2 so far today- I'll be closing down my trading to head off on a weekend vacation in a few hours, but that's what I'd be keeping tabs on for the duration. Nice bouncy bounce trading if you're trading on a 5 min chart. (can't believe we're reduced to this.)

    Anyway- my thoughts on the island pattern remain. If we go sideways and do not fill that gap, even if it's for several days running, the pattern is still valid *if* we get a fairly even gap down. The island itself can have several candles- sometimes even weeks or months of candles in a valid pattern, as long as the gaps share space. If it fills yesterday's gap today it's not an island. In any event, I wouldn't plan my trading anticipating it.

    Secondly- those shooting stars are still good to go, and today and Monday need to confirm. They do not require another tank today (although that would be nice.) Look back at the last several shooting stars to see price action in the days after.

    The glass half-full from my POV happened yesterday afternoon- no, we didn't get a mega tank, and we sure didn't get one this morning, but a strong rally yesterday should have ended that way- STRONG- and it didn't, and this on a day where they broke historical records. G/L today everyone.

  • thelefteyeguy

    im such a noob…took me 13 mins to figure out what UE stands for…btw..looks good so far

  • molecool

    Yes, but this is a more longer term outlook – Bill is not a 'trader' per se. So, what he's talking about is the precipice of Primary wave {3} – I think we are still a few weeks away from that one.

  • mediatik

    En effet, mais je suis brulé .

    Translation ( i hate this sh+t )

  • annamall

    Ditto Clam :)

  • lester

    I am think 5-10%, no more and I am serious about that.

  • salvadorveiga

    Hey Mole I’m starting to think US dollar may be at this point no?

    http://1.bp.blogspot.com/_l3Np4NrEMCU/SnLY0ylF8XI/AAAAAAAAAYU/bGkRU3aIvbk/s1600/dolar.jpg

  • annamall

    Wooo hoooo have a good time sistah 😉 I know you will!

    Go forget about this shit for a nice long (:-)) extended weekend. You deserve it!

    Got your email from last night btw heheheh!

  • OldManRiver

    This market will likely remain at current levels until the 30-year bond auction is over early this afternoon. There is insufficient foreign buying and the Fed will need the help of primary dealers.

    Who's missing?

    11:04 AM Noticeably absent from this week's tsunami of Treasury sales: China.

  • http://trading-to-win.com/ DavidDT

    don't be to hard on yourself – a lot of retail got caught in ultraetfs without clear understanding that they are just day trading instruments – and then they kept wondering why when xlf +1% uyg is +.3%
    that is how tuts make money on dumb asses like … a lot of retail :)

  • thelefteyeguy

    another happy ending to the week…good news stories to aid the frustrated

    have fun!

  • byhiselo

    whats the least expected?…a sell-off on month end with all the 201K money coming in on mon/tues?…pfffft

  • Keirsten

    I can't wait to escape- even if it's only for a few days! Just killing time before I head for the airport this afternoon. :-)

  • thelefteyeguy

    …SSH and SSC

    i love it

  • mrclam

    Just IMHO, if you do this at the end of the day today, and unload them at the start of the day monday, you will be mitigating a lot of your theta loss, and I would put the odds of a vega change at fairly low. If you expect heavy selling, I assume that that's going to take at least a few hours, not just a huge 20 point overnight gap, right?

  • lester

    I watch a 4 min, and I bet ya'll thought I used the 1 min..

  • Iguanadon

    Those who can, do.
    Those who can't, teach.

  • TenYear

    CENX: nice base, above 50 and 200 day crossing up. Breakout nearing.

  • Iguanadon

    Actually Lester we thought you'd somehow rigged up a 4 microsecond ticker…

    😉

  • thelefteyeguy

    i dont know…i think a pop is coming…USD is tanking hard

  • dumamae

    I think votes should be up to paying subs who fund most of this blog

  • http://trading-to-win.com/ DavidDT

    welcome to the club

  • Vardoger

    Someone just sold a shitload of dollars, heads up

  • http://trading-to-win.com/ DavidDT

    why none ever shares the phone number?
    thay must be make those GFs up!

  • Keirsten

    Yeah- but notice how they keep downplaying the importance of the consumer with their Mr. Rogers style spin. 70% of GDP is somehow no longer important in the “new economy.” Funny how they were so slow to call this a recession based on specific economic guidelines, but they have the power to call it over based on hope, with no solid economic data as proof- just pie in the sky magical thinking.

    Oh well- our job is just to trade the tape and take care of ourselves and our own in the midst of the mind twisting nonsense.

  • lester

    this crap is ridic, SPY bouncing like a mattress in a whore house…

  • Stainless_Steel_Hamster

    It was Herr Mole (doubtless a stainless steel mole) that started the reference. I Just follow suit.

    How about some comments on my alternate count?

    Best regards

  • PRSGuitars

    It's actually $TICKX (like $TICKQ is the NASDAQ TICK), where it shows him the way the market is trading in advance. It's a GS proprietary indicator similar to what was stolen recently, given only to a select few retail traders.

    He is using it as a contrarian indicator, however, like $CPCI should be used… but he's got $CPCE! Just read it outright and everything will be ooooook….

    (kidding Les…)

  • thelefteyeguy

    someone must think the bond auction this afternoon will do very well?

  • ablebonus

    My bear dream is that we have a few more up days to fill out Erikd's roof (one more touch at 1010ish which is the 38.2 retrace from 2007 peak to March low).

    Then we can gap down (Thursday, Cisco reports after the bell Wed) for the island reversal.

    Seems like Keirsten and Stainless Chicken have the right idea that today will end up around 13 month EMA around 986.

    Staying neutral but hope to get very short near 1010, and cover a little over the 38.2 line if necessary. Good luck.

  • disrespekt

    this market makes me feel like I am sniffing solvents

  • Fujisan

    Wow, does anyone watching EUR/USD? It sprang back to the previous channel! I wish I kept my longs!

  • Stainless_Steel_Hamster

    Dear Herr Mole

    Any comments on a possible ABC (wave 4) from 741 to 990 or 1190

    It's been a while that I wanted to ask but only today did I register on discus.

    Best regards from a fellow european (though from sunnier lands than germany)

  • PeterK80

    Wow… UUP getting creamed

  • lester

    Mole,
    I will leave it in the hands of the blogging Gods. I retract my comment about the whore house. That type of comment does not help.
    Lester

  • gusrock1414

    K, I am headed for an extended weekend vacation in a few hours and I can't wait to be on the plane with a coke and rum in my hand. I think we all deserve one. When is the evilspeculator convention?

  • http://trading-to-win.com/ DavidDT

    re-shorted UE 1.4240 (that was my second target – damn, I need to read what I write) – going to sleep, stop 1.4267

  • annamall

    Yes very true, but you'll need an awefully big drop ( I D K where your puts are) if they are OTM.

    You know I wish you the wery wery best! :-) and keep that foot, you'll need it!

  • nsysblh

    Yeah, I see my 5 min chart looks like crap. Lucky I'm not attempting to trade this mess…just gonna hold on and wait for one side or the other to win out.

  • naveenkumar

    so fujisan , wats coming next on euro breakout or the channel ????

  • Bankrupt

    dollar and equities selling off

    this is my day!

  • annamall

    hahahah :)

  • Keirsten

    Have fun Gus! We should have scheduled our flights to meet up on a layover! LOL Coke and rum…. maybe I'll have one (or three) too and toast to you. I think we'd all have a blast at an ES convention! Talk about wild. heh heh.

  • annamall

    USD getting just smoked like a whitefish!

  • annamall

    me too Fujisan! I went short USD/JPY at least! 😉

  • salvadorveiga

    damn disqus…

    I'm thinking this for USD

    http://1.bp.blogspot.com/_l3Np4NrEMCU/SnLY0ylF8

  • C C Rider

    OK, Mole I'm out. This shit stinks. I f you can't figure out the smell, go fuck urself.

  • rhae

    I have been having terrible internet problems today,,,
    I don't use $TRIN much… but it seems helpful to help track the intraday trend…

    using H.A. Candlesticks which are more trendy. http://screencast.com/t/mC3JNUfbQm

  • http://www.finz.tv/posse bhbgrouptrader

    hey fellow canuck….where u from in quebec? Montreal here and a fellow poster mostly lurker and mole fan.

  • annamall

    link not working Sal :(

  • Stainless_Steel_Hamster

    Disqus ate my second answer

    from 2007 to march 2008 was wave 1, wave 2 took us to the june 2008 high

    from there you can count 5 waves down to 741 in november (the 1k spike in oktober being wave 4 of 3)

    from then we took an expanded ABC A 741 to 1k
    then B to 666
    then C should be 1,618 (NOW) or 2,618 (S&P 1190) of A

    clear enough?

    best regards

  • http://dreadwinaard.livejournal.com dreadwin

    I'm currently watching FCX as a possible play. Lots of action on the 5-day chart. 60 looks like resistance (look at 2006 and early 2007).

  • Vardoger

    flight to quality. equities unsure what to make of it

  • Bankrupt

    its disqus problem rider

  • PRSGuitars

    Not to be crass, but, it could also be smoked like…

    this heaping joint I'm about to enjoy after a ridiculous market. The benefit of developing contingency plans — you can genuinely be smoked out (like a whitefish! which is I guess what I look like, as a white guy, when blowing smoke rings…) while the trading day continues to be insane.

    I've mostly given up on scalping for the day, I'm doing much better trading my plan than trading even the vwap band reversion scheme I usually employ on days like this. Pretty sure I do myself a favor by taking a little bit of a removed approach to wacky days rather than try to run up and down every little curve.

    http://screencast.com/t/S289cyNa5y3

    Gotta live a little on these days, too. v8muscle and I were stalking a 2hr stoch sell signal that, obviously, manifest itself as a 200 pip run in the opposite direction. So, that required a change of plan.

    Accumulating SPY 99 Aug puts above the pivot while hedging long with /es… 40% filled. Let's see where we can drop this to when there are no buyers remaining…

  • rhae

    $TRIN suggesting time for a little downage, looks like last intraday swings lasting about and hour ( remember it's contra) almost everyone knows that but maybe 1 person doesn't

  • annamall

    nighty night D! :)

  • dingos

    Lester, a gambling problem is not to be taken lightly. Market trading can be the worlds largest casino for gamblers. Your comment yesterday about freezing is not a good sign. If you do have gambling issues (look up the signs on line) – it is much better to catch it now that after you run up a mountain of debt.

  • grednfer

    I don't normally trade currency futures……but I'm really liking the /6E thing ….. what a rally! I bought at the trendline this morning @1.4108…….seems to have support now at 1.4247.

    I have no idea if its more profitableto be long 6E or short DX? Any experience with that?

  • charles_smith

    Site went down there, I thought I saw black helicopters over Mole's pad in Hell-aye but it was just some rioting and looting going down i.e. nothing unusual.. thought maybe the PPT “squad” was doing a takedown of this site as well as the USD.

    Trust your system or don't trade. Past couple days are noise.

  • AudioTactics

    Are you referring to a Treasury bond auction today?

    If so, you're about 2 weeks too early.

  • thelefteyeguy

    add an “l” to dollar…at the end

  • annamall

    hahahahaha that was funny! LOL Count me in on that one!

  • springheel_jack

    Totally with you Sal. That is what I'm positioned for.

    $USD bottom between 72 & 76 three to five weeks from now & then major rally in $USD.

  • C C Rider

    Active moderator, no doubt.

  • Anonymous

    e throwover of B triangle / C down to close the gap

  • annamall

    I don't have any experience with the forex futures, I am still a newbie in FX, but sounds like a great trade! Good for you! :-)

  • tranchefoot

    I guess that short position was oversubscribed. The fuckery in equities is rivaled only by the fuckery in FX. Do you have an opinion about what's next? 9.4% unemployment vs 9.5 expected or some such thing. Who cares???

  • PRSGuitars

    LOL — yeah i was trading /e7 the other night until I calculated that I traded 11.87% of the volume in it (and I am by no means anything more than an intermediate trader – so 12% of open mkt volume is scary as hell!)…

    /6e moves like /es but it's forex, so pips FLY by.
    Be careful. If you try to scalp it WILL rape you. Nifty but terrifying. So seriously, do what you did today — position trade with it (or hedge by selling one /e7 against the /6e you take in a direction — synthetic half-lot of /6e).

    /DX is thinly traded so forget that. /e7 is thin enough to freak me out, so focus on the most liquid and safest product and you'll be fine (/6e was recc'd to me as the best futures euro out there…besides, the /dx is a basket of currencies so it doesnt give you the right exposure unless you just wanted short /dx, diversified…ie, i'd stay with /6e, its the most straightforward and liquid by far)

  • rhae

    I better go find some coffee, Tape about as slow as Moleasses

  • GDII

    can i read this way, even ppt boys dump $$$ like this, they still cannot push spx any higher.
    how long can they last?

  • BigHouse(Aka Mr Vix)
  • annamall

    I know Mole, you have had your share of crap lately. :-( sorry I also have had some crap slung my way, car cost me a fortune, dentist is even worse and the market sucks. there must be some planet BS going on!

    thank you for the FX charts and yes, I bought spy calls on all dips at least for a day trade, because the USD being bitchbeaten, that is good for equities, especially oil, material, agriculture.

  • LuckyJim

    Hello Mole, I like your blog. Sorry to read you’re going through a difficult time.

    I have this note posted on my desk: activity bias: the need to do something in an extreme situation. Doing something will give only a sense of control and relieve of pain.

    About those puts. Maybe you should cover them. Too bad you didn’t have a clear exit strategy in place. Especially with naked long puts it’s essential to determine beforehand how much you are prepared to let the market go against you.

    But what I find most confusing is that you bought naked puts, while you have (also) been posting bullish scenarios. Wouldn’t a bear call- or putspread have been a better strategy? I have been putting on bear call diagonal spreads (short ATM august calls, long OTM september calls) and bear putspreads.

    So maybe you should think twice before saying that Lester has a gambling problem.

  • Styrfart

    Hi, guy's and mr mole!
    Just wanted to say hi, as I've been lurking around your lair, and trying to learn more about TA.
    40ish guy from Stockholm, Sweden! Have nice weekend!

  • springheel_jack

    +1 BTW to dingos. Couldn't agree more.

    Lester, I'm voting for you to stay on, nbut only because I'm concerned you'll watch anyway & just lose the good advice from the many here that are concerned for your welfare.

    I am a natural risk-taker but I will never have a gambling problem because I dislike losing too much. You however clearly don't dislike losing enough to stop. You are chasing your losses, over-betting & trading on optimism rather than a system. You do have the classic symptoms of a problem gambler.

    No-one here wants to see you blow out another account. No-one who depends on you wants that either. You should stop Lester.

  • Iguanadon

    Disqus went down. Couldn't get to this site or Slope or Kenny's blog.

    Or do you think the PPT was behind it?

  • annamall

    Nice chart BH thank you! :)

  • annamall

    Have fun you too, your'e not meeting up are you??? hehehehe. j/k. have fun both of you!

  • PRSGuitars

    TICK is slowly spilling over…any ideas? Or is this market just falling on its face in slow-motion?

    http://screencast.com/t/vieATPBB1zj

    Remember — absence of buyers = synthetic sellers. The absence of an event is just as significant as the event. Look at the 950-1000 AM EST drop…

  • annamall

    hahahaha! :)

  • BigHouse(Aka Mr Vix)
  • annamall

    Welcome! Nice to see you! You too.

  • PeterK80

    USO looks like it is trying to break out of a pretty big head and shoulders…

    http://screencast.com/t/Rez5imzn7

  • thelefteyeguy

    silver is up huge

  • http://bulldodger.blogspot.com scrow774

    The market has been really frustrating for me recently. This whole week I have been slowly closing out of a lot of my put positions and opening additional call positions to bring my accounts closer to delta neutral (I've been almost completely short on the markets the past couple weeks). Thing I have been trying to do this whole week is really pare down my watchlist to focus only on those stocks really setting up in strong bullish or strong bearish patterns. In essence, reducing the degree of speculation and making it more of a playing the odds kind of game (less Keno and more Craps).

    Current long positions : CMG (been in for a while), POT (Inverse H&S), GWW (been in 2 weeks), and JOYG (trendline bounce).

    Current shorts: SOHU (waiting for lower highs to become lower lows), GENZ (theres a reason I didnt close out near worthless puts), and closed out HMSY earlier today for nice profit.

  • lester

    anna,
    are you still long SPY Calls? I still have mine, watching for a breakout…

  • http://chaugner.blogspot.com chaugner

    market looks like one of those 1.50 stocks with 5000 shares traded a day … lol as I type this we see a breakout of 25 cents. Now take profits.

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    For you e-wave noobs (I consider myself one as well), here's one example of why I love it regardless of where we go from here.
    http://tinyurl.com/mkhpfz

  • BigHouse(Aka Mr Vix)

    FAS seems to be breaking out to the upside out of my triangle…Lets see if its for real…

  • http://zstock7.com/ zstock

    QQQQ needs to retest 37, next couple of weeks-it's in a 5 week up, two weeks down pattern on my chart any ways–this is week 5

  • annamall

    Great chart Peter! thanks I am still learning FX and that is a perfect inverse
    H&S

  • annamall

    Hi Les, Yes, I have been buying on the dips, call me crazy, i may be the only one out there. :)

    but you may tryi (when you do more trades in the future) (SMALL ONES) 😉
    to do Vertical spreads. But ie 1 sept 100 call, sell 1 sept 105 now if you do something like that right now it would cost you a debit of 1.82 and you can make 3.16 (that's great) 100% if the SPY goes to 105 by Sept OPX.

    The most you can lose is 1.82 lester, yes you limit your upside but it's all about risk to reward!

    Small base hits, add up to home runs Les! :-)

  • PeterK80

    If we break 36.40 with some volume we could see quite a jump in oil here…

  • annamall

    Frustrating for everyone with a capital F! Don't feel lonely, allot of us are in the same boat!

  • LegendC

    Getting ready to go short on SPY.

  • ckeltner

    Must have pissed someone off. Didn't see his first comment but there was nothing to the second to have it removed from what I saw.

  • KidDisco

    To paraphrase one Mole: This is fucking ridiculous….

  • Keirsten

    Okay, I'm off to an adventure- have a very good weekend everybody and let your mind go (if you have on left that is after all of this.)

    Keep an eye on the same thing I called out yesterday- a close below 99.10 on SPY would be delightful for bears. Take note that even with the dollar tank the market barely reacted. 99.52 is R1. Just my two cents which is just about what my puts are worth as of today. 😀 G/L! CYA next week.

  • annamall

    Here is a trading idea LOW RISK nice reward on SYNA its down 10.51 today on news the CEO is going to retire
    BFK
    Stock @ 25.46 now about 40% down. yikes
    I put on a sept 27.50/30.00 call spread for .60 debit, possible gain 1.90

    Lester these are the kinds of trades that you should try….plenty of open nterest in both strikes.

  • Fujisan

    I need to spend some time to do an analysis to answer your question, but all I can say now is that his type of run up will repeat. If it closes at this level, this is the highest close since June 2, and if this run up repeat, that will be a breakout of this multi-month triangle formation and there will be more upside.

    I'm planning to go long upon a pullback.

  • Fujisan

    I need to spend some time to do an analysis to answer your question, but all I can say now is that his type of run up will repeat. If it closes at this level, this is the highest close since June 2, and if this run up repeat, that will be a breakout of this multi-month triangle formation and there will be more upside.

    I'm planning to go long upon a pullback.

  • annamall

    WOOO HOOO can you put me in your suitcase….Have a wonderful time my friend! :-)
    :_))

  • annamall

    oh yea! that's why I wouldn't short this market here at all, the commodities will hold this thing up and even maybe make that 1000 mark quite soon.

  • anotherone

    Mole, I hope you can get some R&R this weekend. TK's advice sounds excellent in these circumstances. I appreciate the effort you've put in while this insane rally has been happening.

    Now I'm off for some R&R myself.

  • lester

    except for F as you mentioned…

  • Guest

    Mole,
    Just a note to say how much I appreciate the quality site you have built here, including a great community for comments. I’ve been following ES since you and Berk started it and the site has become one of the greatest. The best participation should come from a range of perspectives and traders with various levels of experience. You have attracted a “family” of commentators who add strength to the trend analysis each and every day.
    Lester adds in his own way. He has asked questions that I would have been afraid to ask, but yet I was able to learn from the responses. Like all commentators, he presents a unique perspective. As long as someone is not rude and off topic, I enjoy reading all comments.
    Thanks for hosting a great site.

  • Fujisan

    Have a good weekend, Keirsten. See you on Monday!

  • PRSGuitars

    http://screencast.com/t/ziaxDFYf66

    So far, rangebound market. The vwap is flat as it'll ever get. Just an observation. What's the day's best plan? Is it betting on a big breakout? If so, watch the $TICK for a heads up…

    The best plan is likely trading a rangebound market. If you can't do that (lack of daytrades or limited experience intraday trading) or don't feel comfortable, SPEND THE DAY PAPERTRADING. Consider it on-site work training… this is one job where skill development is OFTEN overlooked.

  • annamall

    yea Ford is smoking crack! hehehe I bought a bunch of shares @ 3.10

  • The Unknown Trader

    I bought at 25.25 (just 50 shares, high roller here), and it's about to bore me to death. Also annamall, it was a bit more than the CEO retiring. I think they also gave somewhat of a weak forecast going foeward. But anyone who puts a trade on this stock (or any other) should do their own due dilligence first.

    I thought it was worth a small position on the theory that it received three downgrades today, and it was down over 30% at one point. I thought with such a large drop it should retrace a decent amount intraday, but so far every time it's tried to get through the 25.70s it's been rejected.

    Of course, it hasn't been getting a whole lot of help from the general market either.

  • lester

    thanks, I bought a 3% position of Sep 25s.

  • KidDisco

    What are the odds that fund managers would want to sell off today because, hey, its the end of the month and they want to book profits?

  • tranchefoot

    Sunday night should be interesting!

  • rhae

    ERY for golfers, maybe it is still congesting the big up day? http://screencast.com/t/58B12oeTlC

  • PeterK80

    USO breaking out of inverse H&S… just waiting for the volume to kick in…

    Short DTO big time

  • annamall

    3% is good, you can't lose much. The Risk to Reward at this point is good, usually gap downs like that fill at some point. G/L to us!

  • annamall

    nice unknow, that seemed to me to be quite overkill, so we shall take a small risk and get a possible nice reward. :)

  • ropey

    commodity inflation is gonna kill this market just like last time, they're gonna have to prop the dollar soon or later otherwise it'll end up with oil at 140$ a barrel again and demand destruction will hammer an already weak economy..

  • Fujisan

    I hope it won't gap up!

  • http://trading-to-win.com/ DavidDT

    slim to none looking at the $ action

  • rhae

    ?? $TRIN flat market taking off… what does that mean? fake out or $TRIN gets the dumpster? My settings anyway…

  • annamall

    me likey Peter, I am on board. :) that will propel the tape up.

  • dullmind

    Interesting graph, thanks.

  • salvadorveiga

    sorry sweetie Google is stupid sometimes pics hosted on blogspot work sometimes don't… if it doesn't just try clikcing a few more times until it does… here it goes…

    http://1.bp.blogspot.com/_l3Np4NrEMCU/SnLY0ylF8

  • TonyMontana

    Love your chart Rhae……but please explain that the red/green dot indicators at the top of the graph are?

    Thanks!

  • standard_and_poor

    This weekend I'll review the performance of the most recent stocks (from last Friday) that were added to portfolio.

    Lester is the
    katzo07 reincarnation – every site needs one.

    This tune is for Lester on this “Playas' day” : “Death in Vegas – 23 lies”.
    http://www.youtube.com/watch?v=ONxlnW0T3X8

    Great weekend Playa rats.

  • PeterK80

    :) Nice. Hopefully its not a fake out… looking good so far

  • springheel_jack

    No, I hope CC Rider isn't getting barred. I value his comments here.

  • thelefteyeguy

    nice call!

  • PeterK80

    There's the volume… oil pushing hard

    http://screencast.com/t/VpFFxde5

  • annamall

    excellent!

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

    iii of iii of 5 coming soon, it appears that they're going to close the market at its top and set it up for a black monday, as i suggested yesterday

  • annamall

    I am in USO 38 sept calls! :) thanks for the tip Plus one

  • annamall

    Have a good weekend S&P! great video and song many thanks after a tough week! :)

  • annamall

    Looks to me like the (thugs ahem ) MM's are trying to sweep out some bulls before pushing higher. God they are like blood thirsty vampire hogs!!!!

  • springheel_jack

    That really isn't fair to katzo. Katzo does some good EW analysis, and does not have a gambling problem.

  • springheel_jack

    If equities correct next week, USO will have a tough week, but I'm thinking we could see oil at $80 before the end of August with rising equities and tanking $USD.

    After that oil looks like roadkill & I'll be shorting it in a big way.

  • zenith191

    That sure is one huge move down in the USD. Perhaps this is finally wave 5 down. Once it is finished this will put the first nail in the equities markets coffin as the dollar takes off.

  • lester

    Good luck and happy trading all. I will be taking a break for a while.

  • PeterK80

    Why cant it ever be easy!? ha. Sometimes I hate this game…actually most of the time.

  • springheel_jack

    That's what I'm thinking.

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    I think that's invalidated on $COMPQ if I've understand what your saying. Maybe (y) of w of B?

  • annamall

    Have a good time Lester and take a long break from this. it will be good for you and family! :)

  • annamall

    They never make it easy!

  • http://trading-to-win.com/ DavidDT

    well, I don't know about Monday, but I think bull will be really “surprised” next week
    something is really fishy going on…just a gut feel

  • Lordted

    Made one trade in the 1st hour and been out in the garden the rest… What a Zzzzzzz.

    Recall some folks on here discussing the 7th August? – 8th is a Moon.

    Have a good weekend America. Same stuff next week.

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    I agree — perversion, drunkenness, top calling, yes, but not gambling that I'm aware of. Where is that guy anyway?

  • fuzzygreysocks

    Revenue per Employee : http://tinyurl.com/mruhky
    (Full scale back at SPYsight)

    I'm cultivating an opinion that if the simple revenue/employee can be goosed upward so will the market.
    We've all been disgusted over the run of this market on fetid fundies for too long.
    Currently, this is my best explanation of how so much money can push the market up so high while many of us scream and cry for SPX drops to 700, 600, 500.
    As long as overall earnings keep coming in higher the market should keep running up, despite UNemployment & questionable housing data.

    Just something to consider.

  • DoubleNaughtSpy

    I know what you mean. Something just feels different. Yesterday we didn't get the usual last hour pop, and today seems awfully weak for an “up” day. It really won't surprise me if we sell off into the close today. Of course I have become battle hardened this year and not much surprises me a this point.

    Battle hardened = beaten to a bloody pulp. LOL

  • mrBozo

    Comrades (get used to the salutation)

    Watch ES 983.50 a close above (EMA 13 Monthly)the socialist win and this becomes a socialized Bull market.

    ” Life is like a jar of Jalapeno peppers .
    What you do today, might Burn Your Ass Tomorrow”

    The Soviet Union never believed it could ever go bankrupt, either.

  • rhae

    sure…. the red /green dots are a paint bar I set up… for the ma cross, I used 1 sma (open) and 2 sma (close) … same as the ma's on the charts… but with the paint bar I can set alerts, without having to watch the chart… I did set it fairly tight but on the daily chart and for short term swing, I think ok

  • annamall

    yes, the USD has broke some technical support levels, so we may see a slight pullback but I am comfortable with those 38 calls for Sept. :)

  • charles_smith

    Sorry for all the hassles, Mole–technology breakdowns suck.
    Speaking of breakdowns–the DXY is a last-gasp move down IMO, not the “final death swoon” many are expecting. Whoever shorted today will be covering soon. The dollar bears forget Eurozone and Japan are even deeper in structural problems than the US. Every govt is trying to borrow megabucks and the EU & Japanese banks are complete trash, too. They're in such denial that they make the US look like Dr. Phil.
    There is a big fat juicy gap in the DXY at 89 and that looks “impossible” to fill–yeah, just like 666 was “impossible” in the SPX last year.
    Plus there are divergences in the DXY and the L-T chart is carving a bottom. Not to mention sentiment on the DXY is extreme. DXY pop and equities downturn will align, and gold will roll over too, even though yes it will go to $1300/oz, just not now.

  • annamall

    Mooooo jethrine! hahaha 😛

  • PeterK80

    I have that feeling too… the dollar has tanked and the market is not moving. Treasuries are up big again.. Who knows… (other than GS)

  • PeterK80

    I have that feeling too… the dollar has tanked and the market is not moving. Treasuries are up big again.. Who knows… (other than GS)

  • colonel_bleep

    Fifth 3rd Bank & BAC now have preferred stocks trading w/ yields lower than JP Morgan preferred. FITBP/ BAC.Z under JPM.I

  • annamall

    have a good night Mr. Ted and say hello to Britain for me! :)

  • rhae

    Note: ERY flashing a red alert now, But my stop lower… I always like to make sure I give all the money back before I get stopped out… :-)

  • molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • annamall

    he's been very nasty the past couple of days, no need for that here. to tell someone to fuck off, doesn't get it in this community or anyone who feels the need to put someone else down no matter how frustrated they are.

  • Bankrupt

    look at freakin cnbc headline:

    Stock Rally Likely to Last, But Don't Forget to Take Profits

    they suggest to sell!!! im very inclined to cover now

  • T_dub

    Aug 6th is a moon, right ? Where did you get 8th ? Could folks please remind me why Aug 7th is important ?

    Either way, I'm looking at this bull flag : the 100% target for which is 1028-1030ish. This number coincides with a fib cluster around 1025 to 1030. IF (and thats a big IF) we get there by Aug 6th or so, that might be the beginning of the salmon hunting season. Aug 6th marks the start of a Puetz crash window (full moon after solar eclipse) – the results of which are supposed to be clear within 4-6 weeks. Feb 9th was the last one, we all know how that worked out after 4 weeks. To clarify, the Puetz crash window says that “IF” there is to be a crash, it is likely to occur around the first full moon after a solar eclipse. There is no guarantee that there will be one.

    Long time lurker here…. been waiting for what I think is the big wave C (not P3, LOL …).

    I hope to post more actively once the big dance kicks off. I hope I've learnt enough from all you great guys… will try to give back to the community now. See you with a bunch of charts over this weekend.

    – T-dub

  • springheel_jack

    You're listing those as though they were faults. LOL

    Katzo's mainly at SOH & Moo's nowadays, though I saw him at Xtrends today. His blog at Bostonwealth is good, and there are other good ones there too. Mortie's been on fire lately. Went long at ES 866. Wish I had too.

  • Vardoger

    Yup, dollar is going UP. Equity retrace.

  • http://trading-to-win.com/ DavidDT

    it either just consolidation
    or if my gut feel is right – some major event coming over weekend – total disconnect in magnitudes of moves – I am confused

  • springheel_jack

    All about consumer spending really, isn't it? That's well down and cost-cutting to boost earnings will depress it even further.

    Without a consumer spending recovery, earnings won't keep climbing. Revenues are falling overall, and not by a small amount.

    Still, while we eat next year's seed rather than planting it, the markets can climb some more.

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

    here's iv, then v and she's done

  • TonyMontana

    Thanks for your input Rhae!

    Have a good weekend! :)

  • T_dub

    By the way, your avatar rocks :)… I've been a Federer fan since just after US open 2002 – when the glorious Pistol Pete fired his final shot and was ready to pass the baton. Tennis rocks.

    Here is the bull flag chart that I actually wanted to post:
    http://www.screencast.com/users/T_dub/folders/D

    The flag seems to be breaking out and faking out all at once. Whats new ? :-)… Will wait and watch.

  • Lordted

    You're right… I must have misread it – the ol mincers aren't what they used to be!!

    http://www.new-age.co.uk/moon-dates.htm

    THis ias what I use.

  • standard_and_poor

    Fair enough, katzo07 ( Sir Calls-tops-alot) is a good lecherous, drunken double nought spy but he knows it – that's why he's so spoiled – give that
    bloke a good spanking. LOL

  • grednfer

    Thx…..I was wondering how to water 6E down…..At 12.5 per tick it could
    be painful if you get the direction wrong without a tight stop.

  • grednfer

    Thx…..I was wondering how to water 6E down…..At 12.5 per tick it could
    be painful if you get the direction wrong without a tight stop.

  • lester

    Thanks Anna,
    I do not think that I am set up with Fidelity to do spreads, but I will
    check after my vacation. I hear you about small base hits and actually
    closed two for a modest gain today. I still have some SPY Calls and
    will close today, hopefully for another base hit or double. Go bulls.

  • standard_and_poor

    You a re 100% correct mate, it's just my way of showing katzo07 affection – perhaps I don't have a gambling problem but I do have aeither jusrst have spellign problem. :  )
     

    ________________________________

  • standard_and_poor

    You too sweetness! ; )
     

    ________________________________

  • lester

    Thanks Anna,
    I do not think that I am set up with Fidelity to do spreads, but I will
    check after my vacation. I hear you about small base hits and actually
    closed two for a modest gain today. I still have some SPY Calls and
    will close today, hopefully for another base hit or double. Go bulls.

  • standard_and_poor

    You a re 100% correct mate, it's just my way of showing katzo07 affection – perhaps I don't have a gambling problem but I do have aeither jusrst have spellign problem. :  )
     

    ________________________________

  • standard_and_poor

    You too sweetness! ; )
     

    ________________________________

  • grednfer

    Thx…..I was wondering how to water 6E down…..At 12.5 per tick it could
    be painful if you get the direction wrong without a tight stop.

  • lester

    Thanks Anna,
    I do not think that I am set up with Fidelity to do spreads, but I will
    check after my vacation. I hear you about small base hits and actually
    closed two for a modest gain today. I still have some SPY Calls and
    will close today, hopefully for another base hit or double. Go bulls.

  • standard_and_poor

    You a re 100% correct mate, it's just my way of showing katzo07 affection – perhaps I don't have a gambling problem but I do have aeither jusrst have spellign problem. :  )
     

    ________________________________

  • standard_and_poor

    You too sweetness! ; )
     

    ________________________________

  • springheel_jack

    D'not ew lal meta.

  • PRSGuitars

    (posted this on today's post, just replying to you so you see this, too,
    since you seemed interested, grednfer)

    SO! There's /6E, which is the beast of the lot. $4700ish margin, $12.5 tick
    (YIKES!). This is the expert contract. There's also the MICRO /6E (symbol:
    /M6E) which is $472 margin, $1.25 tick (wimpy but smart scalability for
    establishing positions). This is the intermediate contract and is useful for
    smaller traders (myself included) trying to catch, say, a 2hr stochastic
    cross trade (ie, requiring a lot of time and being accepting of drawdowns if
    they come…). Then there's /E7, which is the flea-ridden dog of the group.
    I don't know margin req's because, plainly, it sucks (but it's tick size is
    $6.25). I posted a while back about my tribulations trading /e7 overnight —
    it has a spread, is SUPER thinly traded (I personally traded 26/219
    contracts during my trading hours — yeah, that's 12% of volume — not
    good), etc. THUS– if you want to be a baller, trade /6E. May the force be
    with you (sometimes I feel like scalping /6E is like the Jedi training ball
    in star wars, where luke has the visor over his eyes and the little floaty
    bastard sphere stings him while he tries to predict its movements…) If you
    want to drive in the middle lane, perhaps, try /M6E (but be mindful of
    commissions; I'm getting sub-5$ per round trip per contract and that's five
    pips of required gains to offset your immediate transaction loss).

  • PRSGuitars

    (posted this on today's post, just replying to you so you see this, too,
    since you seemed interested, grednfer)

    SO! There's /6E, which is the beast of the lot. $4700ish margin, $12.5 tick
    (YIKES!). This is the expert contract. There's also the MICRO /6E (symbol:
    /M6E) which is $472 margin, $1.25 tick (wimpy but smart scalability for
    establishing positions). This is the intermediate contract and is useful for
    smaller traders (myself included) trying to catch, say, a 2hr stochastic
    cross trade (ie, requiring a lot of time and being accepting of drawdowns if
    they come…). Then there's /E7, which is the flea-ridden dog of the group.
    I don't know margin req's because, plainly, it sucks (but it's tick size is
    $6.25). I posted a while back about my tribulations trading /e7 overnight —
    it has a spread, is SUPER thinly traded (I personally traded 26/219
    contracts during my trading hours — yeah, that's 12% of volume — not
    good), etc. THUS– if you want to be a baller, trade /6E. May the force be
    with you (sometimes I feel like scalping /6E is like the Jedi training ball
    in star wars, where luke has the visor over his eyes and the little floaty
    bastard sphere stings him while he tries to predict its movements…) If you
    want to drive in the middle lane, perhaps, try /M6E (but be mindful of
    commissions; I'm getting sub-5$ per round trip per contract and that's five
    pips of required gains to offset your immediate transaction loss).