Wait It Out!

If you have been visiting the lair for more than a few weeks then you probably know that the Mole is pretty adamant about cutting losers short and letting winners run. If you are still holding short positions at this point then you are most likely considering whether to cut out here or to leave at least some lottery tickets in the running for a possible continuation of the ongoing correction. For some people this is one of the hardest aspects of being a trader and IMNSHO it is one that separates the hardened steel rat from a regular field mouse.

But in a way this question can be reduced to a very simple exercise – and it goes like this:

  1. Has my target been reached? If yes then take profits – if no then proceed to #2.
  2. Is there any new technical information (your soggy bottoms and any rumors don’t count) that changes the context of the ongoing campaign? If yes then proceed to #3, if no then do nothing.
  3. Does this information represent evidence that requires us to change or cut the current campaign short (i.e. new resistance/support, opposite entry, reason to lower stop, etc.)? If yes then take action, if no then do nothing!

So if you project this simple exercise on the current tape on the E-Mini then my conclusion at this very moment would be to do nothing. Yes we have received new evidence in the form of a new NLBL on the daily chart. This means that 1656.75 becomes our new line in the sand – which means I will remain short below it and long above it. I also enjoy that ST diagonal that now comprises three stabs higher, suggesting to us that a big seller remains present there.

On the NQ I’m seeing an expanding range which is good news in that we are most likely going to see acceleration here once that expanding diagonal breaks. However it’s bad news as of right now in that a lot of outside candles represents shitty honeypot tape you don’t want to get drawn into. By all means play the swings if you know what you’re doing.

A few words regarding gold. Yes, it’s driving us nuts again but recall that it has done this in the past. And every single time the pain has in the end been worth the final reward. Thus when I see another entry here I will close my eyes, think of England, and then take the damn entry! The bus moves fastest once everyone got off – never forget that.

Nice entry on platinum this morning – I hope you grabbed some of that. Just wanted to let you guys know that I’m holding this sucker into 1556.


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Cheers,

This entry was posted on Thursday, August 22nd, 2013 at 1:37 pm. Both comments and pings are currently closed.

  • Pervergence

    ES RTV sell failure apparently…..

  • DarthTrader

    /ES ABC target 1654.50 missed by a .25 this morning which is close enough but it looks like market will take another shot at it. This morning the /TF (Russell 2000 futures) was 2.1 points away. AS it stand right now the high a few min ago was only 1.4 away from completing the ABC. If completed before Close I will take profits on remaining longs and go short . . .

  • Pervergence

    ES 60min RTV sell looks still in play???

  • amokta
  • Sean

    Looks like a battle between the 50d & 100d ma… neither direction would surprise me (though the hourly chart is looking more “toppy” than the daily chart is looking “bottomy”), but whichever way it goes it looks like we got a compressed spring here thanks to the fiasco today that’s gonna poke some eyes out, can’t wait!… adding to the fun is the giant boner CNBC has now they actually have something to talk about… though it’s like a neutered dog’s boner: gross, funny and useless all at the same time…

  • bdoone

    If you extend Mole’s ES diagonal back another day to Monday, you get another touch of the HOD.
    So 4 days highs: 1657, 1656.75, 1654.75, 1654.25

  • Ronebadger

    barely, at this time

  • BobbyLow

    CNBC should have a Warning Label at the bottom of your TV Screen that says “Watching CNBC can be Hazardous to your Financial Health”.

    We were due for some kind of bounce. Whether or not Today’s Bounce has any near term legs or not, I think we’ll have to tune in tomorrow to find out. :)

  • Sean

    Looks like that is the 50d ma providing resistance… interesting that this looks almost exactly like the setup leading into the rally after 7/5: the 50d was resistance for several days (after a test of the 100d) until there was 50d/NBL cross on the same day at 1623, and we went from there to 1705…

  • Dyellowflash

    A failure here and down move would trap 6 months of buyers in the mkt. Looks like we are playing the big stakes today.

  • bdoone

    True, but that consolidation was 50 pts off V-bottom, so different context.

  • Dyellowflash

    here’s what i see.

  • bdoone

    An unnamed website ridiculed Cramer/Liesman’s circle jerk yest. at the top. Pretty funny seeing Cramer telling Liesman how great he is because he called the initial down move an overreaction and rally is on.
    After Cramer gets done praising him, Liesman says, with fake modesty, ‘I’ve been doing this a long time.”
    SPX tanked 20 pts shortly after segment concluded. Buyer beware!

  • amokta

    ‘The bull market effectively came to an end on September 3, 1929′ ?

  • http://dartht.blogspot.com/ Darth_Gerb

    A person born on this day will be 83 years old. If that same person saved a Quarter every day starting at age 6, then by now that person has accumulated ~$7,100 today. (Assuming this person is still alive and kicking)

  • amokta

    Interesting, but with all the inflation, would have been better to save candy bars :-)

  • Pervergence

    /GC starting to perk up

  • Sean

    Totally agree, that’s why I’m currently short… and not sure I have the balls to go long if those lines are crossed since we would need to push through the 100h BB pretty strong, and not sure that would be anything more than a bull trap… especially since the only reason we got a bounce today was because people think the Fed is not going to taper since the jobs report disappointed… feels like the type of market that short setups have a higher probability of success than longs (and when I don’t have a day job maybe I will prove that), also seems like we are more susceptible to crashes than spikes up, so I am definitely adding a risk multiple on long trades vs short trades (tighter stops and/or smaller trade sizes on longs)…

  • Sean

    Are we not allowed to name that site around here? We should be able to admit that we all look at smut once in a while… as long as it is not affecting your job or relationships it’s perfectly healthy and natural… … wait, what site were you talking about?

  • Skynard

    NAZ must have reopened. Ha, those QQQ 72 puts just triggered for .33.

  • BobbyLow

    I haven’t had CNBC on for about 3 Years or so. But I used to have it on in the background for the preceding 12 Years. After watching those Bullshit Artists for over a decade I can honestly say that even though I still don’t know that much about the markets, I know more than they do. And I can say that with absolute conviction.

    IMNSHO, Cramer is a Carnival Barker and Liesman is a Shill for the Banksters. Don’t get me started about the “Expert Panel” that used to come on at the EOD to tell us what’s hot and what’s not.

    They did have one guy who was pretty good (I can’t remember his name) but he appeared to have a nervous breakdown right on the air and I think he’s now doing video spots on the net.

    Better off flipping a coin than taking advice from those bastards.

  • bdoone

    ‘unnamed website’ kind of inside joke since I figured everyone here would know who I was talking about.

  • Pervergence

    that is one big ass OP on the es daily…..

  • Darkthirty

    or reefer

  • Sean

    Everyone chill… “the President of the United States is monitoring the situation”… also, “the President is very concerned about any situation that affects the US economy”… ugh… too… much… stupidity…

  • Pervergence

    The candy bars would be gone for damn sure

  • DarthTrader

    If the person had kept each quarter saved in his possession then many of those quarters would be 90% silver. Those quarters are now worth 19 times their face value so the actual value would be somewhere around $65,000 . . . Assuming approximate $3000 Face value of Silver quarters

    You can thank the Fed for the Devaluation of our currency!

  • Skynard

    Spike high as resistance, do not think we have another 20 pt sell off. Good place for a stop though.

  • BobbyLow

    I have an Off The Wall thought regarding the NAZ. I wonder the main reason that the Naz has been stronger than sister indices is because while the DOW, SPX, RUSSELL and just about every other index has hit all time highs, the Naz has not. It actually needs to go higher by over 2,000 Points to claim an all time high.
    Just a passing thought. . .

  • Darkthirty

    !!!

  • Skynard

    That is interesting, usually it leads.

  • http://dartht.blogspot.com/ Darth_Gerb

    Bingo, NAZ don’t lead?, then don’t chase.

    but it’s a bull market, right? ;-D

  • Dyellowflash

    omg – shorted a tonne of ym at 14982 – bcos 1982 was my yr of birth. I think I will ditch my ST tag and hold this comfy for a while

  • DarthTrader

    /TF & /ES both completed ABC’s up in the last hour I closed my longs and am short as I noted earlier

  • amokta

    [Hussman] “Anytime you hear pronouncements about QE from FOMC members, just insert some complete non-sequitur. It’s likely that QE has no greater cause-and-effect relationship with the economy, and the headline will not be any worse for it. For example:

    Fed Governor Bullard Cautions Against Slowing the Pace of Spitting Watermelon Seeds Into a Can, Citing Continued Economic Risks.
    Fed Vice-Chair Janet Yellen Pledges to Keep Knitting Enormous Wool Scarf in Order to Provide Support for U.S. Job Creation.
    Fed Chairman Ben Bernanke Pledges to Keep Playing “Highland Laddie” on the Bagpipes Until Unemployment Rate Drops to 6.5%.”

  • Skynard

    More the merrier:)

  • phylum

    Cable is coiling

  • Pervergence

    Gap down on Bucky would sure leave a pretty island reversal…

  • SS_JJ

    LMAO! Post of the day :-D

  • SS_JJ
  • http://dartht.blogspot.com/ Darth_Gerb

    TLT, weekly candle ‘hanging out’.
    I have no idea what the end result will be by Fri close.
    http://stockcharts.com/h-sc/ui?s=TLT&p=W&yr=2&mn=0&dy=0&id=p43577266186

    -DG

  • Skynard

    Spoos on the move finally:)

  • Darkthirty

    yup, was wondering if it’d wait till the open.

  • Skynard

    Ran the stops by .25 tick then turned tail. My VIX calls and QQQ puts should be hopping today.

  • Darkthirty

    saw that, like fib #s though, how accurate are the charts, really? Did a chart layover earlier nice divergence between DJI and ES

  • http://evilspeculator.com molecool

    Seriously??

  • Dyellowflash

    TP-ed the one tonne of shorts from 14982 at 26 and 28. Left only 2 trackers to see things through. Keeping it frosty until 0 is up & running at night. GL everyone.

  • DarthTrader
  • Skynard

    Nice! Dollar still showing strength.

  • http://evilspeculator.com molecool

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