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What Would Socrates Do?
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What Would Socrates Do?

by The MoleAugust 23, 2010

As my short term equity charts have all slowed down to the point of ambiguity I decided to ignore them all today and apply a slightly philosophical approach to make sense of it all.

After all it was Socrates who said:

A good decision is based on knowledge and not on numbers.

Wise words indeed and what it means for us traders is that all the fancy tools and indicators in the world are completely useless if we fail to put them into context or are able to interpret them to our advantage.

I mentioned this last Thursday – for the past year we have basically been gyrating within a hundred handle channel on the S&P 500 – with the exception of one meaningful attempt to breach it, which of course failed. Although the bulls still act as if they own the place there has been zero progress for either side. This tape is coiled up and wants to finally escape this dreaded channel.

Seems to me there are two forces at work here – one is gravity as dictated by our time cycle as well as the wave count, both of which are suggesting a correction is needed. The other is escape velocity defying said gravity through various machinations by the Federal Reserve in collaboration with the major banksters intent on socializing any losses incurred during the 2008 market melt down.

For the first six months of 2009 escape velocity was winning the day, partially aided by heavily oversold long term conditions. Upward momentum however started to slow in September 2009 and we saw a gradual increase of corrective waves after which a final short squeeze last April completed what we now count as Primary {2} of cycle wave c.

Since then we had a few fast moves to the down side but any attempts to escape the channel shown on the chart above have been thwarted. At this very moment we are smack in the center of this channel – which appears to be the equilibrium between these two opposing forces. The bears are exchanging strikes with the bulls but no winner has emerged just yet. However, it seems pretty clear to me that which ever side is able to breach this channel purgatory will take the price for the immediate future.

So, this very simplistic chart has some very important implications. As we are now in the center of the storm each side has an equal chance to score another touch down. If you look at the quarter channel dividers you notice that they also represent important energy points at which reversals or break outs happen. Only to be presented with another hurdle about 25 handles later. Make no mistake, my dear steel rats, this is a hurdle run and at this point both the bears and the bulls have to hurdles to go.

My suggestion at this point is to do what the market tells us. It’s quite simple – every breach of a line to the upside will diminish the potential of an medium term slide to the downside. If we bust through the upper yellow line then the odds of this happening are reduced by a minimum of 50%. Similarly this applies to the downside. If we push through 1040 it greatly adds much needed credence to the downside potential. And only a push through this year’s lows at 1010.91 will give us a real chance to see Primary {3} unfold as expected.

I know that this is a very simplistic chart but I actually am pretty elated about being able to bring things down to a very basic common denominator. We are in the eye of the storm right now and each tick up or down adds credence to these two opposing forces. Instead of guessing where the market will go we should simply watch this chart and adjust our delta exposure accordingly.

Of course if the Zero (once TOS fixes their data problem, mbmbl… grmbl…) or any of our other short term momo charts are presenting a clear picture I will let you know immediately. Right now however it seems everything is in flux.

Cheers,

Mole


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.
  • DarthTrader

    And the Corollary

    “Figures Don't Lie, but Liars Figure. “

  • http://www.mylifemytrade.com MyLifeMyTrade

    My read (SO FAR) tells me that we either have a nasty finish to the day.. or we have nasty gap down tomorrow.

  • ShadowTrader1

    Well put Mole. As you have stated before, we are very tired and ready for SOMETHING BIG.

  • http://evilspeculator.com molecool

    I completely understand – the last year has been hell and everyone is worn out (as maybe reflected by traffic across the financial blogosphere).

    Unfortunately 2010 may go into the annals of finance as a 'do nothing' year. I remember Jesse experiencing that in his career several times and he stated that there is simply nothing to be done. Of course sideways strategies do work but these periods are difficult to anticipate when emotions are so high. Maybe my equilibrium analogy may breathe a bit of sense into this whole mess – one of the forces has to take over the other one at some point. Hopefully soon – quite frankly, I don't care which way it swings at this point as each breach will bring upon a rather meaningful move.

  • ShadowTrader1

    Remember that Friday is the first revised GDP for the 2nd quarter. It was originally 2.4%. Many are expecting it to be revised down to around 1%. The anticipation of this will most likely weigh on the market as we get closer. IMO. If it is not revised down much is even up (more lies from liars figuring – Right DarthTrader?), then the market will probably shoot up quite a bit and cause a massive short squeeze even up further.
    I cannot imagine the bullish version but at this point I trust nothing.

  • ShadowTrader1

    A trade I have been loading up on over the last couple of months that seems to be working for me is a large amount of puts on FAS. Long dated. Financials are starting to breach their July lows even though the market is still holding up. Keep in mind over time these 3x ETF will all die no matter what direction they are poised. Its the math. Buy out far enough and you win. Buy the right direction and you win big!

  • chronographics

    Morning Fellow Rats
    A EURO chart for you all,an important line breached in the last few days from the 1.1871 low. Osc showing signs it may be O/s BUT we all know that it can be buried at this level in a strong downtrend – thats why it is important to always use multiple timeframes.
    What this chart is also telling me is that we may see a retest of the underside of the line – this would be the “C” wave in a irregular ABC – before heading lower. It is also telling me that if we punch immediately lower the support zone 1.2490 – 12600 is not very deep
    http://screencast.com/t/NzVlNjJiNj

  • chronographics

    I found the best way to do nothing last night was to go to sleep :-) Still short Euro

  • BobbyLow

    Another “wives tale”: Mutual Fund Monday

    On Monday, August 9th, Spy Volume was one of the lowest if not the lowest volume full non Pre-Holiday day of the year at 121 Million Shares Traded.

    Today, Monday, August 23rd, current Spy Volume is at 106 Million with an hour to go.

    Average Daily (3 Month) SPY Volume is down to 246 Million.

    Now I understand that this is Summer but the 3 Month Average has almost all SUMMER days in it.

    So as Clara used to say in the TV Commercial, “Where's the Beef”? :)

  • ShadowTrader1

    Keep an eye on the VIX. It has a bullish flag that started back in early May. It could take a couple days or weeks to pan out but the energy appears to be building quite a bit.

  • ShadowTrader1

    BB on the SPX 30 min are beginning to pinch again. I feel like we are in the early part of a massive roller coaster ride. At the beginning when the coaster slowly ratchets higher and higher and higher before the big drop.
    Or
    On a catapult waiting while the feds crank the band tighter and tighter before my launch up into orbit only to end in a fiery crash. LOL.

  • Tronacate

    A big drop will come out of nowhere…..just relax and be positioned so you don't have to chase.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I agree with you. Any drop that STARTS with a news *always* gets faded. Or at least creates a big shakeout.. Truly big drops come out of nowhere like the April top

  • ricebowl

    I thought you were going to say that Socrates took the poison pill!

    “One thousand September 80 SPY puts? Done!”

  • ShadowTrader1

    Ok . . . Relax . . . I can do that. Just one question Tronacate. Am I knapping in a roller coaster or catapult. I am just saying!

  • Darkthirty

    Wasn't scrotaltease the substitute teacher?

  • amokta

    Oh my, how the mighty spx have fallen again?

  • derekste

    obviously you're joking… but I'm putting in a placeholder comment for a month from now when we come back and this would have been a wildly successful trade.

    /a man can wish, can't he?

  • http://evilspeculator.com molecool

    Zero subs:

    I am an idiot – I just remember that I have the Zero running on NinjaTrader via my DTN feed. So as a work around I set it up on my other system and it's working fine :-)

  • Tronacate

    Need to break down through 1800 on the NQ

  • jigdaddy

    WTF? lower low today and my options positions dont have higher high! arghh!!!

  • ricebowl

    Lower ^VIX.

  • ShadowTrader1

    Thats right. The VIX is lower. Why? No more fear. Why? Because mom and pop is out of the water. Why? To many sharks. The market is dead.

  • nyxjf

    Those are mighty accurate trading signals. What are they!? geron?

  • sloth_bear

    Very nice post Mole!
    I really like the way you transform numbers in knowledge!

  • funkypenguin

    Agree- Mole is this a trading system you are working on

  • amokta

    been there before! – result of low (implied) volatility?

    'Only when investors perceive neither significant downside risk nor significant upside potential will the VIX be low.' – is wikipedia reliable?

  • equity_momo

    This market feels so fked. Although VIX is odd.
    If Fridays low doesnt hold i fancy a proper shake out.

  • http://www.mylifemytrade.com MyLifeMyTrade

    In the previous thread, I did mention that 73.5 was a textbook stop run… we got the dump into close. Now next piece of the puzzle is to open below 1060 tomorrow … 1060.5 would have created mega-bounce in RH.. So, lets look for gap down below it.

  • http://evilspeculator.com molecool

    Yes, that's Geronimo – it's been kicking ass lately :-)

  • DudePlunger

    It started firing trades again? Did you change the code to the bear side or leave it as was?

  • DudePlunger

    Today's price action was very intriguing. I took a short position on /ES @ 1072 at 3:15PM, with a stop at 1085. I'm looking for 1 trend day lower this week, whether it be a typical 30 handle down day or a flash crash down to 980, I will take my profits at the end of the trend day. Otherwise, I will hold with my stop in place for the time being.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Expecting gap down and go day tomorrow. Remains to be seen if the housing data will accentuate the down move tomorrow OR if it will be used to suck in bulls…

    1060.xx is a very key level. Gap down below it is very instructive IMO.

    Below 1060, there are tonnes of levels that could produce sucker bounce.. but any bounce should hold at 1060 IMO. I wouldnt be suprised if we see 30 handles down tomorrow.

    Of course, we could also have another stop run towards 73 area.. I doubt it though.. 3 of 3 of this down move from 1127 is about to be unleashed IMO

  • DudePlunger

    Agreed. Ideally, I'd like to see us gap down below 1060, and close around 1030-1020 tomorrow.

  • DudePlunger

    I wanted to reply to myself and say that the low volume in August may hold us back for another week or two. It's possible we hold support here yet again, and head back into the 1070 or even break today's high for a higher retracement (July 6th had a similar daily setup.) But the probability and the risk vs. reward is there, you can never be certain in trading and right now we have very solid patterns on the charts that point to significant downside action. Theoretically :D.

  • raised_by_wolves
  • raised_by_wolves

    Mole, I found a way to make your chart more complicated 😉

  • DudePlunger

    Prechter would be proud. DJIA/GLD is his favorite chart.

  • raised_by_wolves

    The daily candle closing below this trend line increases odds for bears, but if bulls can push above it tomorrow, watch out for a fractal-pattern-powered blast off.

    http://content.screencast.com/users/raised_by_w

  • raised_by_wolves

    Bears have to break that bitch—not Prechter—the Bollinger Band. Think bears are up to it?

  • raised_by_wolves

    That would add credence to gravity.

  • raised_by_wolves

    And that would add credence to escape velocity.

  • Brishort

    EWI is so predictable, it is getting sad. At least they have an “ab” alternate count.

    I stand by the fact that today was in the end only ab and that squiggle “c” is still pending to come, maybe as early as tomorrow. If so, it am expecting it to be an opportunity of a lifetime to short, next bus stop being below SPX 1000.

    Good night all!

  • amokta

    supposedly, they look at the bigger picture, so less concerned about short-term gyrations (why then do they produce the STU!)

    nb put/call ratio – low

  • DudePlunger

    I don't know if they are. But I think eventually they will and I like the risk vs. reward on this current setup. We will see if they can do it as early as tomorrow, or if the bulls will hold support.

  • convictscott

    RBW, Excellent point :-) Some points on the daily shooting star candle formed today on $spx.

    What the shooting star represents is a failed attempt by the bulls. By itself it doesnt really mean much statistically in terms of edge, but when the market is making a series of lower lows and lower highs (see chart below) The odds are high, above 70% that a break of the low of the daily shooting star candle will cause a continuation of the move.

    This is because the obvious place for bulls to place their stops is at the low or just below, so if price gets to this point bulls selling out will add a little downside “kick” to a market which already wants to go down (short term trend is down)

    http://www.masterkillers.com/wp-content/uploads

    So for those who arent short, perhaps a good place to get short with a clearly defined risk and good risk/reward is 1064 (update, it already triggered that level while i wrote this) with a stop at 1080.50 (es u0)

    The flip side of this, is that breaking the high of a shooting star candle is VERY BULLISH short term, and nearly always results in a “popped stops” type rally.

    So in this case we have a neat place to get out of the trade if we are wrong.

    Trading today is very simple. Stay short, get out on break of the high. If aggressive pyramid up from here. Ordinarily this would be a trigger to get long, but in the current circumstance over head resistance in the 20 moving average and previous spike highs mean that the upside is not enough to be an attractive risk/reward op.

  • rg64

    I saw the put/call ratio to….interesting indeed!

  • amokta

    for me to raise, but for others to remark on its significance (if any)!

  • http://pulse.yahoo.com/_QHLEHTWXIS4NNUGDDHMQUOMKEQ Leigh Bateman

    In ancient Greece (469 – 399 BC), Socrates was widely lauded for his wisdom. One day an acquaintance ran
    up to him excitedly and said, “Socrates, do you know what I just heard about Diogenes?”
    “Wait a moment,” Socrates replied, “Before you tell me I'd like you to pass a little test. It's called the Triple Filter Test.”
    'Triple filter?” asked the acquaintance.

    “That's right,” Socrates continued, “Before you talk to me about Diogenes let's take a moment to filter what you're
    going to say. The first filter is Truth. Have you made absolutely sure that what you are about to tell me is true?”
    “No,” the man said, “Actually I just heard about it.”

    “All right,” said Socrates, “So you don't really know if it's true or not. Now let's try the second filter, the filter of
    Goodness. Is what you are about to tell me about Diogenes something good?”
    “No, on the contrary…”
    “So,” Socrates continued, “You want to tell me something about Diogenes that may be bad, even though you're
    not certain it's true?”
    The man shrugged, a little embarrassed. Socrates continued, “You may still pass the test though, because there is
    a third filter, the filter of Usefulness. Is what you want to tell me about Diogenes going to be useful to me?”
    “No, not really.”
    “Well,” concluded Socrates, “If what you want to tell me is neither True nor Good nor even Useful, why tell it to
    me or anyone at all?”

    The man was bewildered and ashamed.

    This is an example of why Socrates was a great philosopher and held in such high esteem. It also explains
    why Socrates never found out that Diogenes was shagging his wife.

  • OldChicago

    FTSE, particularly DAX looks bearish on a short-term (5-day) basis. DJT, RUT(H-S), XLF (double top) all very bearish today, as well as BKX. XHB down 3%, and sitting on july low (H-S). These seem so obvious that we could get a bounce from this level tomorrow.

    SPX close slightly below 50% retrace of July low to 1120, with MACD divergence on the hourly. ISEE # bullish for the day. Breadth is even. Another possible bullish scenario is that the news on Home Sale has been baked in, unless it is super bad.

    Here is # SPX500 over 50DMA. (Data shown up to last Friday 8/20) – It's at a level of prior reversal. The tape could trade lower for a time though.

    http://tinyurl.com/259h2x3

    Wishing otherwise…

  • http://pulse.yahoo.com/_QHLEHTWXIS4NNUGDDHMQUOMKEQ Leigh Bateman

    In ancient Greece (469 – 399 BC), Socrates was widely lauded for his wisdom. One day an acquaintance ran
    up to him excitedly and said, “Socrates, do you know what I just heard about Diogenes?”
    “Wait a moment,” Socrates replied, “Before you tell me I'd like you to pass a little test. It's called the Triple Filter Test.”
    'Triple filter?” asked the acquaintance.

    “That's right,” Socrates continued, “Before you talk to me about Diogenes let's take a moment to filter what you're
    going to say. The first filter is Truth. Have you made absolutely sure that what you are about to tell me is true?”
    “No,” the man said, “Actually I just heard about it.”

    “All right,” said Socrates, “So you don't really know if it's true or not. Now let's try the second filter, the filter of
    Goodness. Is what you are about to tell me about Diogenes something good?”
    “No, on the contrary…”
    “So,” Socrates continued, “You want to tell me something about Diogenes that may be bad, even though you're
    not certain it's true?”
    The man shrugged, a little embarrassed. Socrates continued, “You may still pass the test though, because there is
    a third filter, the filter of Usefulness. Is what you want to tell me about Diogenes going to be useful to me?”
    “No, not really.”
    “Well,” concluded Socrates, “If what you want to tell me is neither True nor Good nor even Useful, why tell it to
    me or anyone at all?”

    The man was bewildered and ashamed.

    This is an example of why Socrates was a great philosopher and held in such high esteem. It also explains
    why Socrates never found out that Diogenes was shagging his wife.

  • http://evilspeculator.com molecool

    “It also explains why Socrates never found out that Diogenes was shagging his wife. “

    Funny but very doubtful – Diogenes was born between 412 BC or 404 BC and Socrates died around 399 BC. So, at Socrates' death Diognes was between 5 to 13 years old – doubtful he would have shagged his wife unless he was into some serious MILF as he got older (and Socrates wouldn't have known anything about it).

    Besides, Diogenes lived in a tub and ate a diet of onions – doubtful any woman wanted to shag him 😉

  • yudhisthira

    I hope we get back to TOS when fixed. The ninja is hard to see on the blackberry.
    May be mute next month. Plan to get the Samsung Epic 4G with hi def screen. http://tinyurl.com/2g6qhwn

  • amokta

    Futures selling off a little – Prepare for P3 sh^rk attack time ??
    Mind you, if we could relay on the futures market, we wouldnt need the Delorean

  • DudePlunger

    I would love P3 Sh^rk attack time. I had my ass handed to me in June and July. I'll go into detail.

    I took my account from $13,500 to $19,000 in May. After a few stop outs, I was down to about $16,000, and was fumbling around betwen $14,500 and $17,000 all of June, until early July I had 4 bad trades, that took me down to $10,000.

    So I've been there since July, and have only taken 5 trades in all of August, only waiting for the best opportunities. 30 handles down tomorrow would go a long way to helping my account.

  • raised_by_wolves

    "Besides, Diogenes lived in a tub and ate a diet of onions - doubtful any woman wanted to shag him ;-)"

    So that explains why I've never been shagged.

  • Thespookyone

    Breadth wasn't even, you broke the July divergent lows on the MCO's on many indexes-most importantly the NYSE traditional. Summation gapped down hard, the STVO topped below 0 and rolled over, 50/200 EMA crossover South, the large separation between the 5 and 10% indexes will probablt accelerate summation lower. Can't say I'm wishing it otherwise, LOL.

  • http://evilspeculator.com molecool

    Your case is different – you're plain ugly.

  • Wave_Surfer

    Plus that story breaks down because it WOULD be useful information for Socrates to have.
    So the 3 filters still works pretty good.
    I agree if something is just a rumor and hear-say, is bad and it is something that I don't care about at all (useful to me – If it is useful to me, I will care about it – kind of definitionally) then I really don't need to hear about it.

    Again, if the information is so critical to me that I may choose to murder a person over it, then it is very useful to me. In fact, I have yet to hear any news that is so useful that I might consider murdering a person because of the news.

  • raised_by_wolves

    Actually, Anna called me cute when I showed her my picture.

  • Biowolf

    Mole, its not the bulls vs the bears its the Feds vs the bears and that´s a big difference.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Lets pray the housing data tomorrow is positive.. thats all we need along with gap below 1060.. and then we will see sub-1040 tomorrow.

  • http://evilspeculator.com molecool

    Not that I'm a big fan of labels to begin with – but I bite: The Fed aren't bears? Right, they are skunks…

  • http://evilspeculator.com molecool

    Oh, tell me more! What happened then? LOL :-)

  • http://evilspeculator.com molecool

    Okay, now on a more serious note. I have developed a system of triage when watching the news via my Tivo for the past few years: Every time I see a news report I ask myself 'does this apply to me or is it useful to me?'. If not I jump ahead – 90% of the stuff that makes it on the news has no bearing on my life. The remaining 10% is depressing but that's another story.

  • chronographics

    MLMT, the market will do what it wants tomorrow whether or not the housing data is good or bad.
    I learnt this in the FX market many years ago, it goes like this:

    If it is as expected then the Market will do Y
    If it is as expected and the Market doesn't do Y and does X instead its because everyone was already positioned to expect the numbers and they are simply taking profits.
    If it was worse than expected then the Market will do X
    If it is better than expected and the Market doesn't do Y and does X instead then everyone was already positioned for the good news.

    There will always be an excuse to explain what happened just trade the Technicals and be Disciplined :-)

  • Biowolf

    <html><head>

    <link media=”all” type=”text/css” href=”/telusbeta/static/deg/css/wysiwyg-3933289048.css” rel=”stylesheet”>
    </head><body>
    As usual, you are right. Name ist Schall und Rauch.

    Aug 23, 2010 09:50:08 PM, wrote:

    molecool wrote, in response to Biowolf:

    Not that I'm a big fan of labels to begin with – but I bite: The Fed aren't bears? Right, they are skunks…

    Link to comment: http://disq.us/l4rfa

    Biowolf wrote:

    Mole, its not the bulls vs the bears its the Feds vs the bears and that´s a big difference.

    —–
    Options: Respond in the body to post a reply comment.

    To turn off notifications, go to: http://disqus.com/account/notifications/

    </body></html>

  • http://evilspeculator.com molecool

    At this point I give up. I have tried for two years now and I simply can't drill this into the skulls of certain steel rats.

    The news do not matter – traders/investors will simply interpret it according to what they want to see.

  • rtlguru

    I notice people commenting on the VIX acting weird and their puts barely up while market is done. This isn't surprising considering were in the last week of August. Remember that VIX is estimating volatility about a month out. Sept expiration is only 4 weeks away, but the market is pricing in little volatility until after Labor day when the big boys come back. I've been selling options for 5 years now, and this almost always happens during holiday opex months.

    Of course, this doesn't preclude a crash from happening. If you truly believe it'll happen in the next 2-4 weeks, you're getting great prices on lotto puts.

  • http://evilspeculator.com molecool

    Mmmmh – so do you trade it? I mean – do you sell vega ahead and then buy it back? Or buy it now and sell it later? Maybe a juicy calendar spread would do the trick…

  • chronographics

    I feel your pain :-) you certainly have tried… I remember in the Dealing Room trying to educate the new trainee Dealers on this, some got it some didn't. Those that got it also got other things and went on to be good Traders. Those that didn't, well they didn't last.

    Got to say any Rat that visits this site gets a great education on what to do and not do and tips and plans to stay out of trouble and make CASH. Even after all my years of trading I like spending time here it helps me get perspective sometimes and interaction with other makes me a more considered trader I think and that can only mean MORE of MR. C. ASH … Thanks Mole

  • Bob the Horse

    When I opened my Bloomberg last night on my Blackberry, the news headline said 'Stocks rise as M&A euphoria outweighs economic recovery concern'. Before my eyes it updated to 'Stocks fall as economic recovery concern outweighs M&A euphoria'.

  • http://oahutrading.blogspot.com/ steveo77

    Socrates would have made all the philosophers the kings, that was his main point. However, he would have to have gone up against the banksters, and not sure the philosophers got it in them.

  • legobear

    Haha, you'll often see that in the URLs too. They start out with the URL and the heading being the same, but often change the heading without changing the URL.

  • Bob the Horse

    FWIW,, I am going to have a small day trade long just below here, am bid @2628 Estoxx which should be just under 1060 esu0. Running a fairly tight stop on it though but it it works, upside target is just above ydays high which would be sweet.

  • gsavli

    this might be temporary bottom. hourly is oversold and someone is furiously buying US futures, as my level 2 is showing.

  • http://evilspeculator.com molecool

    Furious buying AH – it's either Bob or the Fed 😉

  • Bob the Horse

    Fillorama

  • gsavli

    well, he/it just stopped buying.

    the barrier dissapeared.

  • Bob the Horse

    Just went long USDJPY as well, @ 84.3

  • http://oahutrading.blogspot.com/ steveo77

    nice move, first night I was watching this for some reason

    http://screencast.com/t/ZjJkYWY1ZGM

  • Bob the Horse

    It is all CNBC are talking about this morning – has to be a climax to the move. More seriously, any sign of intervention will take this on a stop run upto 88 at a minimum, we have to be close to that.

  • raised_by_wolves

    Even if futures put in a short-term bottom and retrace some, $SPX should open below Mole's Larry level.

    http://content.screencast.com/users/raised_by_w

  • chronographics

    interesting timing, as I see a bounce here in EUR to 1.2730 odd took Profit on all my short around here.

  • raised_by_wolves

    I'm looking for ($SPX)*(UUP) to open below this BB . . .

    http://content.screencast.com/users/raised_by_w

  • raised_by_wolves

    I'm also looking for ($SPX)/(GLD) to open below this BB . . .

    http://content.screencast.com/users/raised_by_w

  • chronographics

    I haven't published one of these for a while – my Favorite the US Long Bond :-)
    When yhis GREEn uptrend line goes be very careful as it could get ugly on the downside – and don't think just because in the past year falling Bond Prices have been supportive of a share market that that will hold true this time – IT ALL DEPENDS ON THE REASON THAT THE PRICES ARE FALLING. Correlations can and do change quickly.
    The hourly Osc here has already turned down, the 2 hourly is more reliable against false signals but i also very high and starting to turn, previous turns have all resulted in sideways or downward price adjustments.
    Happy Trading i am off to sleep – Yes I have call levels set :-)

    http://screencast.com/t/NzkzMGVh

  • paros

    Bob, what makes you think today will be an up day? Still having your long in Estoxx?

  • Bob the Horse

    Just doubled up when esu0 hit 1054.50, I am running a tight stop on that. Look – I am playing with fire here so feel free to ignore me. We are still going to 920 but I am just looking for a counter-trend play

  • paros

    Thx for sharing

  • fisheggs

    Thanks Bob. So the forecast is that the market is still fucked

  • Bob the Horse

    It's totally fucked but my roadmap has always been that the meat of the move will be in Sep so the risk-reward here is not favourable for the shorts. But that is just an assessment of the odds

  • Bob the Horse

    Stopped out at 84

  • DarthTrader

    This market has been in Love with Fading opening Gap for couple of months now.

    Also look at all the lows in recent months they have a Thin Tail . . . Basically saying the market was pushed down good and hard before they ramped it up. Those spikes down drew in Fresh Bear Meat and pushed out weak Bulls so the reversal was solid and had a good chance of extending. Welcome to the world of Corporate Socialism

  • Bob the Horse

    Implied vol is a full vol point off the highs as well now so looks as though the put selling is kicking off.

  • Brishort

    I don't know if I am being punished by the STU gods for defying their primary count yesterday, but I stand ready to scratch my “ab” at any point.

    Reaction after this morning low will be key, as only 2 solutions left at squiggle level.
    Irregular flat, but Larry must really hold or we are indeed in iii of (iii) and it is useless to look at the market, we should be shorting with prejudice. Remember that the P&F trigger for a breakdown is as soon as 1060.00 is touched or broken down. Until then it could still bounce.

    Good luck to all!

  • bluprint

    Are you excluding early trading? ES is well below 1060 right now and considering fair value, so is the cash index. Unless it rebounds before the opening bell.

  • Brishort

    Yes, to keep it consistant, I go with what stockcharts uses, and it only includes the official session. 30 minutes is still a long time before the opening.

    However, I may be in the purgatory of EW count with only the official session. But since those are the only tools I am doing counts on and despite the last year, they held OK on their validity despite ignoring outside official session, I am sticking with those.

    Since there is a lack of studies on TA impact of the “outside official NYSE session”, I stick to the official one. I know we had many gaps that were nasty and worked overnight, but since P&F wise & EW squiggle wise, they still fit, it is just upsetting from a trading point of view, but should not affect the TA view validity.

  • Nightwind

    VIX appears to be painting an Inverse H&S with a 28 neckline breakout point on the daily.

  • Nightwind

    The STU gods only punish subscribers.

  • Brishort

    Of which I am… They know where I live! 😉

  • jigdaddy

    is that ZL reading accurate? -17??

  • tradingmom

    Just came to ask the same thing. I'm showing minus 18.

  • DudePlunger

    First step to trend day down is here. Just need to stay put without any significant bounce till the housing data, and then we fall into the 1040s and lower.

  • jigdaddy

    what time is housing data?

  • raised_by_wolves

    Good, I'm seeing ($SPX)*(UUP) move below BB(208,0.618) . . .

    http://content.screencast.com/users/raised_by_w

    . . . and I'm seeing ($SPX)/(GLD) move below BB(208,1.618) . . .

    http://content.screencast.com/users/raised_by_w

  • BobbyLow

    10 AM

  • gsavli

    when does the data come out?

  • raised_by_wolves

    Interestingly, SLV is up, way up, while GLD is flat; therefore, the SLV/GLD ratio is up.

  • gsavli

    scratch this :)

  • Tooncez
  • raised_by_wolves
  • Brishort

    Ok, now short with prejudice 😉
    Have to follow the signals. Will have to see if I get squeezed!.

    NDX & RUT outside P&F bear trap material I think, SPX still in the zone.

    See interesting new Stockcharts messages on P&F pattern on top in red. Notice as well very little price by volume support underneath. By ordre of significance on the messages : the links below.

    http://stockcharts.com/def/servlet/SC.pnf?chart

    http://stockcharts.com/def/servlet/SC.pnf?chart

    http://stockcharts.com/def/servlet/SC.pnf?chart

  • jigdaddy

    break 1040!!!

  • bluprint

    nice timing

  • BobbyLow

    July Existing Homes Sales down 27%.

    Not looking good. Who woulda eva thunk it? :(

  • SW6

    Bobby, do you remember weeks ago I thought 1060-1010 may be largely an air pocket? Guess we get to see what happens now.

  • Bob the Horse

    Got stopped on those longs

  • Brishort

    All major index now confirmed outside bear trap material.

    EW count currently valid is therefore that this is a third of a third. Lower close would therefore be ahead.

    Did I mention today is full moon?

  • SW6

    heh, heh Prechter and Hochberg are tsk tsk-ing you as we speak. :-)

  • Brishort

    Sorry, one too many third here!
    And the “confirmed outside bear trap” is from P&F 1 box reversal point of view.

  • DudePlunger

    It was 10am.

  • Wave_Surfer

    I thought they were saying it was a 3rd of a 3rd of 3rd of a 3rd?

  • raised_by_wolves

    You're saying, this is not a bear trap, correct?

  • Brishort

    If I get this right this is a iii of (iii) of 1 of P3

  • shortcover

    just wrote some covered calls against my SRS, FAZ…

  • SW6

    of 1?

    of 3 as in Minor 3.

  • http://chartsandthat.blogspot.com/ ultra

    3 at very many degrees of trend.

    bwa ha ha ha etc and so on…

  • DudePlunger

    I would count it as: Minuette 3 of Minute 1 of Minor 3 of Intermediate 1 of Primary 3.

    Minute waves typically take around 9-12 days. We are currently in day 5, smack in the middle and hence most likely in the 3rd subwave of this minute wave. Minute Wave 1 should carry prices below the low that Minor 1 made, which was 1006. After that, a sharp snap back rally should take place, and then the most devastating waves of selling we've seen this year.

    Things rarely ever work out that perfectly, but thats the count I have.

  • raised_by_wolves

    Actually, we really haven't had much of a down move yet.

  • Tooncez

    I'm not stopped out yet, but I have a bad taste in my mouth…

  • BobbyLow

    Yes.

    But we need a break of 1040 first and that would be nice.

    I”m on the Bus but I keep hoping we don't get a flat tire. I've been stood up at the alter way too many times now. :)

  • jigdaddy

    bears are being a bunch of pussies again and are letting bulls squeeze them….

  • Wave_Surfer

    or just a healthy bounce, so we can continue to fall.

  • amokta

    I am too busy to trade, so just watching the near-term gyrations
    Have we hit the generational low yet – is it time to go long again ??

  • raised_by_wolves
  • Bob the Horse

    Don't know about that but I am not going short again until either next month, or there has been a decent squeeze

  • BobbyLow

    10:00 – 5 Minute Candle on ES has one hell of a lower wick. 143,499 Contracts and maybe another stick save.

    But we shall see what we shall see.

  • Brishort

    Yes, does not mean it cannot bounce

  • bluprint

    EUR all over the place…

  • raised_by_wolves

    The settings I have on this little quick chart seem to be well calibrated for today's price action.

    http://content.screencast.com/users/raised_by_w

  • derekste

    when mole switched over to ninjatrader for the zero yesterday, initially there were entry/exit points marked on the graph.

    I don't see any now so either he took them off or there hasn't been a proper setup… was just wondering if there was an explanation for these as they don't show up on the ToS based zero.

    any input appreciated!

  • BobbyLow

    Anybody notice that the 10 Year has a new handle at 2.492 at this moment?

    I think it went all the way down to 2.0 in November 2008.

  • http://evilspeculator.com molecool

    Actually those were Geronimo entries/exits – any active strategies are shown by default and I had to disable them.

  • http://evilspeculator.com molecool

    What a shocker!

  • raised_by_wolves

    The sharp spike down at about 7 AM PST must have been a wave five of some small degree or other. So, I'm just going to relax while we trace out a correction.

    http://content.screencast.com/users/raised_by_w

  • DudePlunger

    I'm not a fan of the way we reacted to the housing data. That big hammer on every chart has me a bit worried, especially after a terrible July trading month. I took 20pts profit at 1052, and will wait to see how this plays out for the next few hours.

  • http://evilspeculator.com molecool

    The range over on NinjaTrader is a bit wider – still have to adjust it to match that of TOS. Without the latter running it will have to wait.

  • Brishort

    If this can help, here is my definition of short with prejudice:
    Short term leverage account is now for 100% of its value:
    Long sept TZA call 34 @ 8
    Short TZA call 50 @ 2.
    Synthetic position at 0$ premium as if long tza @ 40, except with 0$ margin and higher leverage.
    This is a 3rd of 3rd strategy where you must be convinced it is going down.

    If it goes up, maximum risk = 6$ (or all my account in my case!) with volatility increases as tza goes down cushioning the upside risk in addition to the 2$ premium received on the 50.

    Playing for 100% gain max until sept options expiry.

    Note: actual results may vary 😉

  • http://evilspeculator.com molecool

    If anyone cares about my opinion – I only count the cash (literally and in EWT).

  • Brishort

    I do care! ;-P

  • tradingmom

    Thanks — good to know. Helps put this morning into perspective — I was thinking that it didn't “feel” like a minus 18.

  • http://evilspeculator.com molecool

    Did anyone notice that we stopped at that 25% line on the SPX?

  • tradingmom

    We care, we care!

  • Brishort

    In the last paragraph, “if it goes up” is $rut, as tza is inversely correlated.

  • Tooncez

    TOS is working for me today.

  • derekste

    ah, makes sense. entry/exits looked great based off what I remember seeing. in the past, you had posted success/profitability updates on some of your programmatic trading strategies, something I would be interested in seeing again. is this something you've ever thought of automating? I'd be happy to lend a hand in doing so :)

  • bluprint

    I understand a lot of folks only count cash for purposes of EWT, but the reason I responded to Brishort like that is he posted 30 mins before open with futures at about 1052, at that point. His post read as if he hadn't even looked at /es yet… At that point, 30 mins before bell, I think it was pretty safe to say “It looks like Larry is dead”.

  • Brishort

    Let me further clarify this.
    In P&F, the bear trap follows strict criteria.
    It is a breakdown by 1 box only that is immediately reversed P&F wise by a column of “X”

    Since this morning breakdown P&F wise were at around 2-3 boxes depending on the index this morning, we are therefore outside the bear trap danger.

    There will be 3 boxes reversal and retracement, but it will remain in the downtrendline, it is then regular P&F retracement in a downtrend and not a beartrap announcing a stron column “x” reversal.

    Hope this helps!

  • http://evilspeculator.com molecool

    Okay, nobody wants to talk to me, so I'll take off for a while. Don't forget today is a POMO day, folks.

  • OldChicago

    $vix looks like it's in correcting mode. EUR/USD seems to have slow down, perhaps one more push up. Noticed that GS/XLF did not correct as SPX did, but it didn't drop as much either.

  • Brishort

    And I appreciated your comment very much. You forced me to confront my own methodology. I was indeed caught and probably should have abandoned the “ab” scenario and Larry.

    I think you provoked an excellent reflexion in me. Knowing this, would I short the open or wait for my signals confirmation, and as you see from my later posts, I wanted to make sure I was not going to get caught in P&F beartrap.

    As I posted at one point, I followed my signals when I tought they were TA wise validated. You had an excellent comment, I just had to choose my camp as to how I would handle the open. Keep posting!

  • WTFed

    Maybe it bounced off there to put in a 4th?

  • raised_by_wolves

    Nice. I didn't notice. I haven't even looked at SPX today.

  • raised_by_wolves
  • Brishort

    Mole, it's because you inspire respect and pause as the master. We need time to digest every word 😉

    The young jedis are fooling around in the space bay, but pay respect and silence to any entrance by Yoda with a respectful, but silenced “attention” (military) “garde-à-vous” when the master chief enters the spacebay 😉

  • Planspieler

    Too many focus on the the time after Labour Day – smells fishy.

  • raised_by_wolves

    Dammit, every time I try switching to SPX, TOS crashes on me.

    http://content.screencast.com/users/raised_by_w

    You're talking about the 25% line between gravity and escape velocity, correct?

  • http://evilspeculator.com molecool

    Geronimo has been doing great – just have not been advertising it. And while the VIX was over 30 evil.rat was doing great as well – right now it's been set to silent (until the VIX goes over 30 again).

    Unfortunately most retail traders don't have the discipline to trade automated strategies. After a down month most people walk away and try something else – the eternal purgatory of the nomad retail trader. The ones who stuck around cashed in lately, but I didn't want to advertise that as some people may have interpreted that as Schadenfreude. Everyone is so sensitive these days – all those boys brought up without a father figure? 😉

  • OldChicago

    Did u noticed that we tag the trend line from May/June hi?

  • http://evilspeculator.com molecool

    You guys may want to look at the charts I post here. Just an idea..

  • http://evilspeculator.com molecool

    Ouch – write support@Thinkorswim.com.

  • Bob the Horse

    It's just reality – if every market participant waits until after Labor Day to make big decisions, then you would be a fool not to take notice.

  • bluprint

    “You're talking about the 25% line between gravity and escape velocity, correct?”

    That's how I took it, the next to the bottom line in the spx chart above.

  • Brishort

    Reviewing squiggles:

    Potential count on my abc may be that we had a truncated c @ 1075 yesterday.

    Therefore this would be:
    a = 1063.91 to 1081.58
    b = 1081.58 to 1069.43
    c = 1069.43 to 1075.41.
    1075.41 to 1046.68 would therefore only be i of (iii) of 1 of P3
    and we are currently working on ii

    I have no weighting on this scenario, just a current possibility.
    If this is ii, then it could retrace to 1075.41 without much damage.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=15&b=5&

    Why this scenario? as RBW mentioned, issues with SLV/GLD, bonds behavior, vix behavior etc.

    Just not enough momo currently for a iii of (iii)

  • raised_by_wolves

    I keep them tabbed. I don't know if you caught my references to Larry. I've been concentrating on Larry, Curly, and Mole, er Moe.

    http://content.screencast.com/users/raised_by_w

  • http://www.mylifemytrade.com MyLifeMyTrade

    All those who shorted today will be fucked with IMO.

    How? a point or two above the opening level – expect that to arrive around europe close at 11:30-11:45am

  • bluprint

    I'm not sure how you read the significance of that.

    1) Its validation of your methodology. The supposition that the 25% you have marked is significant has been reinforced.

    I'm leaning toward this interpretation. In other words, b/c of the test of that line by spx you are now more confident that line is an important point to watch and also more confident about the 50%, 75% and 100% marks.

    2) Resistance and being unable to break through it is a bad sign for bears.
    At this point I would think its too early to read that as a bad thing for bears. Things won't go straight down, no?

  • gsavli

    yes, this uptrend has been strong so far. and on low volume – so, nothing new here.

  • subevil

    Brishort i was just drawing out this chart when you post this comment

    i think zigzag 5-3-5 count is still valid, yes?
    http://tinyurl.com/28ug98t

  • rtlguru

    Anyone who shorted after the housing news deserved to lose all their money. You won't find a bad report that was more anticipated. Classic sell the rumor, but the news.

  • Tooncez

    Slightly confused by the wording – you mention 1010.9 and 1140, but the lines drawn look like 1130 and 1118.

    I like your levels though, it's reinforcing my naughty bullishness..
    http://screencast.com/t/NDEyZTkx

  • EvilTrader

    this market is addicted to gaping huge then fading. Not good for a trader´s health.

  • BobbyLow

    Yes the market is a cruel bitch.

    However, I did a buy a little SSO for a Day Trade to ease some if the pain.

    Once VWAP was broken and a few other things went in the wrong direction like the Vix, Russell and the Oilers, the handwriting was on the wall.

  • http://www.mylifemytrade.com MyLifeMyTrade

    This 1057-58 right here is the HOD IMO. We will likely go down from here..

  • omelette

    In your count, where do you have your P3 starting?

  • derekste

    I know you recommend trading at least 5 contracts for each geronimo signal, but can't quite figure out why? whether I trade 1, 5, or 500 contracts, losses will be the same %.

    I'm debating giving it a shot, but only have enough capital for two contracts (trade 1, keep the rest around as buffer to ride out possible losing streaks)

  • rtlguru

    Would not be surprised to see a print 4-5 pts higher to squeeze the last of the bears who have stops at 1060 ES

  • http://www.mylifemytrade.com MyLifeMyTrade

    I expect a major trade-able low to come in at around 1023-1025es tomorrow late morning.

  • WTFed

    Dude, didn't you just say, “All those who shorted today will be fucked with IMO.

    How? a point or two above the opening level – expect that to arrive around europe close at 11:30-11:45am”?

  • Brishort

    1129.24

  • Brishort

    It is anecdotical, but it is the anagram of the previous P1 top @ 1219 😉

  • WTFed

    I'm certainly green when it comes to EW, but if this is a 4, the better stop would be 1061.75, the low from 8/20, which was the end of 1, because 4s can't go into 1s. Apologies to Mole if I'm talking out of my ass. Hey , I'm trying!!!

  • Brishort

    Not exactly, you b wave is my current P3. I am not currently looking for exceeding 1129.

  • omelette

    top? or the start of your P1?

  • OldChicago

    NAZ, SPX all have a H-S on the daily chart. If this pattern holds (as they all twisted in the past being bullish), the target should bring us to the June lo.

  • Brishort

    Absolutely sorry, mutitasking at work and answering crap.

    So let's try this again.

    P3 top start @ 1219.
    and 3 of 1 of P3 starting @ 1129.

    Too busy to look up the letters correctly but you get the picture.

    Will have to leave for PM, but will follow post on my phone!

  • OldChicago

    Mole, You commented on VIX the other day. What do you think of the VIX now, with the drop in SPX? For some reason, it does not seems to be impulsive to me.

    BTW. What's your opinion on POMO day? Lower treasury prices?

  • subevil

    yeah i realized
    misread some of your numbers and thought we werelooking at same count.
    just thought my count still valid and wanted to share

  • subevil

    yeah i realized
    misread some of your numbers and thought we were looking at same count.
    just thought my count still valid and wanted to share

  • raised_by_wolves

    (1) Done. Jeremy replied back promptly with hello and kind regards. He'll pass me to their tech team. (2) I will continue bitching: Not only does Prophet keep crashing on me but also Charts has been unbearably slow since market open. Practically, I can't edit studies during any higher than average volume episode. Sucks! (3) I did my homework, really, I did. Let me try typing in $SPX to see if I can show you. Arrgh! Crash again. But there, you can see my homework in the background—Larry, Curly, Moe, your gravity/anti-gravity channel, and a couple of my own that slice and dice the tape pretty nicely from my subjective point of view. See? Someone looks at the charts you post here (highly recommended for everyone else).

    http://content.screencast.com/users/raised_by_w

  • rtlguru

    Sorry for the late reply. My main trading strategy is to write options every month. I usually write front month only as you get most “bang” for your buck. I was heavily short August options and cleaned up on those so didn't have any Septembers.

    I resisted selling septembers yesterday but sold some select puts on GS and AAPL today. I rarely post my trades because I doubt most people here would want to be naked puts and calls.

  • http://www.mylifemytrade.com MyLifeMyTrade

    So whats wrong.. Isn't “This 1057-58 right here is the HOD IMO. We will likely go down from here.. ” consistent with “All those who shorted today will be fucked with IMO.. A point or two…… “

    Opening level was around 1055.. We got to 1057.. ok we went a point higher… And we did put in the high so far around 11:45am..

    So whats the problem?

  • Brishort

    P&F slight update:
    Please note that the approaching entire bounce of this morning low did not tick up a single “x” column on 1 box reversal P&F for SPX, RUT & NDX.
    See links below.

  • WTFed

    I guess the “ALL THOSE WHO SHORTED TODAY WILL BE FUCKED”. Because a “Tradeable Low TOMORROW at 1023-1025” would hardly qualify that statement. Maybe I'm just getting tired of Katzo-like pontifications. Forget I said anything.

  • Long_John_Silver

    We may not want to be, but it happens ….. (interested in your trades iow)

  • WTFed

    Consider me Bob-the-Horse 2.

  • Brishort

    Sorry, when I said entire bounce I meant $RUT who came within 1 point of yesterday's close. You'll understand that I watch $rut more closely… ;-p

  • amokta

    Wondering whether to hold shorts or not (med/LT trading) – what would Socrates do :)

    Also, when is a retracement infact a chnage of trend (on MT/ST scale?)

  • Brishort

    If this can help, my guideline to your last question:

    When the retracement exceeds the starting point of the previous EW degree deemed to be impulsing down. We don't have that now.

  • jigdaddy

    Hooooooooooooooooold!! (imagine william wallace from braveheart here)

  • jigdaddy

    if you miss katzo, he can be found on the dead blog formally known as xtrends

  • raised_by_wolves

    Copy/paste layout_preferences followed by trash, reinstall, and drag and drop layout_preferences seems to have worked beautifully. TOS no longer seems to crash when I view $SPX.

  • amokta

    Yes, this is of help
    Assumes one knows about counting the waves etc – hold on, thats why i subscribe to ewi stu!

  • amokta

    also can be found on the premier hotoptionbabe blog ?

  • http://evilspeculator.com molecool

    Yes, it has a big impact on people's psychology. But look beyond your feelings as it also paints a picture of a dysfunctional market. And as such this whole notion on this being a new bull market is questionable at best.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I understand that now.. Most people who shorted today would keep a stop couple of points above today's open I guess. Their stops will be run and then we will drop was my thesis.

  • amokta

    some of the high betas (or debt laden companies) are reaching april/march 09 prices (mind you, they made lower lows in mid 2008) e.g. UK – DSGI, YELL,

  • Brishort

    There truly is a correlation factor between downside movement of the market and posting on this site. It is fascinating! RBW, this is your next chart

    Mole how did you arrange that the wired stainless stell rats only get their electrical juice activating them when the market is down.

    Is that Yoda force you mastered?? 😉

    (trying to lighten the mood 😉

  • Gary_UK

    Thanks to Mole for his 'be patient' post this week.

    I have sat through some serious stress and pain this past 7 weeks, after being caught short early in July.
    Now I plan to get some serious payback for that over the next few months, and I will not, repeat WILL NOT cover my shorts until we hit 850 on the S&P. So there!

    The PPT Has fired it's little $2b bullet for POMO today, so now just watch this thing crumble into the close, back down to 1045ish I reckon.

    If you are short, hold tight, I believe there will be bounces, but there will be some very big down days ahead, 4-6%, and you don't want to miss those. Good luck to us all.

  • amokta

    Watch the vix – like obama, it always tells the truth, until it doesnt

  • finansreven

    Okay, the beauty of being at work when the market moves and with pre defined orders laying there is not getting tempted to overinvest or just do things for action.

    Half my short SPX were closed at 1063.5. Will keep the rest until close or maybe tomorrow.

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

    hi boss, just droped by to say hi and leave some notes…

    after open's drop there was a (bulish) divergence on LOD, but the strangest thing is the current ramp I have on very short term…a “save”

  • amokta

    I will close my shorts when we reach 400 on the dow (well, Prechter says so !!)

  • finansreven

    LOL.

    I have to admit I struggle with the exits. Specially when I am in front of the screen and paying attention, then the mindset not good enough. So I think I just should scale the positions after x points in profit and ride the rest within a predefined timeline (for example it will be closed within x days) and after some good days take some days off, just to not get into the action mood which can be quite costly.

  • SW6

    Full Moon 1:05 EDT

  • raised_by_wolves

    Mole, I drew these price levels on $SPX/$VIX back August 13th. I've added a red arrow.

    Then . . .

    http://content.screencast.com/users/raised_by_w

    Now . . .

    http://content.screencast.com/users/raised_by_w

    Pretty good shooting, huh?

  • amokta

    MLMTs next mythical tradeable low (say 1022) might be the next best thing, at least for a re-load/bank profit strategy :)

  • DarthTrader

    I repeat

    This market has been in Love with Fading opening Gap for couple of months now.

    Also look at all the lows in recent months they have a Thin Tail . . . Basically saying the market was pushed down good and hard before they ramped it up. Those spikes down drew in Fresh Bear Meat and pushed out weak Bulls so the reversal was solid and had a good chance of extending. Welcome to the world of Applied Corporate Socialism.

    ES is an ABC down to 1045

    This was posted about 8:30am the ES target sentence added at about 9:45am

  • DarthTrader

    The Key to watch the Bond & the Dollar. If bonds start to sell off take your short profits and get out.

    I did at the lows this morning. I may be proved wrong by the close but then I have a lot of room to change my mind at this point

  • DudePlunger

    Hey all. Just wanted to chime in to say I'm excited that I have an interview tomorrow at a new currency trading desk. The firm, (TradeStar, which doesn't have a website, one of the two things I don't like), is an equity trading firm that is forming a currency desk because of regulations and one of their partner is an exclusive forex trader that will be mentoring 5-10 traders. No salary, profits only, and maximum leverage of 200 to 1, but there is a capital contribution of $1000-$3000. Now I don't like that, and I will push hard to have them allow me to sim trade and then have them put up the capital themselves, but 1-3k is a small contribution as compared to other desks that charge 5k or more. So we'll see how the interview is tomorrow, but this could potentially turn out to be a very good opportunity.

  • OldChicago

    Nice chart/tool.

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

    I have a top in…

  • Brishort

    Good to see you back Hamster!

  • raised_by_wolves

    I'm following (JNK/IEF), waiting for either this to break down . . .

    http://content.screencast.com/users/raised_by_w

    . . . or this break up . . .

    http://content.screencast.com/users/raised_by_w

  • raised_by_wolves

    Break down just happened . . .

    http://content.screencast.com/users/raised_by_w

    Need to confirm that it's not a head fake.

  • equity_momo

    Max 200:1 leverage ? Yikes. I recommend you dont go anywhere near that sort of leverage!

  • sloth_bear

    time to short AUD/JPY ( & the market?):
    http://screencast.com/t/YjA4ZjI1OWI
    (stop above top of the channel)

  • raised_by_wolves

    I was suspecting that this candle wick was a top . . .

    http://content.screencast.com/users/raised_by_w

    Did you get confirmation from your indicators?

  • DudePlunger

    Why? That's actually very good. Imagine you have $1,000 in your account and you have been pretty consistent over 3 months (60% profitable trades, making 10% a month.) Now on your $1,000, that means you are making $100, but the numbers are very solid and if you only had more leverage you'd be making more. So the firm gives you an additional $200,000, raises your loss limits, and allows you to execute the same strategy, and if you have the same results, you make more money, in this case instead of $100 a month you'd make $20,000 a month. The key is for the firm to accept some of the risk on your behalf when increasing your leverage, otherwise 1 trade will blow out your account. If they take on the risk though, it's a win-win for everyone if you execute the same strategy or have the same results.

  • DarthTrader

    Yes I was labeling moves at 1:30 as false about a month ago but haven't been watching closely lately.

    I just noticed day after day the 1:30 move was false, we'll see if still the case

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

    if that candle is on my “top is in” i had possible reversal on some of my intradaday , but not sure it will make a new LOD

  • equity_momo

    Dude no offense but i know how leverage works. If theyre taking the lions share of your risk then fine but youll get stopped , sliced and diced using that sort of leverage. Trust me. If youre trading 200k of their capital and you have 1k skin the game , what sort of a move in the underlying does it take to stop you out? 0.5%. Thats a nats pubic hair. I know what these shops are like and i doubt theyre going to let you keep on rolling without stumping up another 1k each time to play.

  • DudePlunger

    Didn't mean to offend you, just wanted to clarify I knew how it worked and wasn't oblivious to the games of these shops. If they don't take the lions share of risk with that leverage, I wont join, period.

  • equity_momo

    I wasnt offended just making sure we were on the same page. I actually treat leverage as a 4 letter word. I realise if youre light on powder you need to use some to build up capital but its very easy to blow up. That kind of leverage imho is for dead men walking. Just a heads up – perhaps some retail traders here who trade around a small book can give you a better feel (im no whale but i rarely go beyond 5x leverage – i think youre going to end up with sloppy habits using excess leverage – what i mean by that is youll become a scalper. No offense to scalpers but i dont think day trading for ticks is the easiest way to build capital)

  • finansreven

    I think you underestimate the power of big money.
    Having an trading account at 10 000 dollar, then it is very easy to trade without the stress.

    BUT when you trade an account ten times larger, you will never be able to trade within your comfort zone, unless you are an experienced trader (and experienced traders will never take those kind of opportunities that you have been presented, because they have built up quite a nice trading account on their own).

    Add the fact that the leverage will punish your mistakes extremely hard, then I see a disaster in the making.

  • DudePlunger

    I'm actually pretty used to excessive leverage. My current trading account is with AMP Futures and they provide margins on the /ES of only $400. With my $11,000 account, that means I can afford to trade 25 contracts….but I only trade 1 and I hold it for an average of 12 hours. That's what I plan to do at this firm with currencies.

    I agree scalping currencies is a waste of money, the commissions become way too high. You can scalp the SPY or the /ES successfully, but I prefer the game of 3-5 trades a week, swing trading, as I think it offers the best risk vs. reward….other than holding positions for weeks/months at a time (that requires capital and discipline, both of which I am developing but do not have enough of yet :D.)

  • DudePlunger

    Another thing I forgot to mention is that if they take any percentage of my profit, I expect them to bear the same percentage of my losses. Also, if they ever increase my leverage substantially, I expect them to increase my loss limits and drastically increase the percentage of risk they are taking, otherwise they're just setting me up to blow up, as you guys have mentioned.

    I'm glad I didn't deal with these prop shops when I was first starting out, the leverage would've gotten to my head and I would've blown out in a heartbeat. But after making $30,000 and then losing $40,000, and getting to a strategy where I take things very slowly and focus more on risk management than making money, I should be able to make any potential partnership with a prop shop work to my advantage in being a professional trader.

  • raised_by_wolves

    Has anyone else's data flatlined?

    http://content.screencast.com/users/raised_by_w

  • Darkthirty

    TOS is DOA

  • DudePlunger

    Prophet charts stopped working. Use TOS charts.

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

    on emergencies you can always go to google and set up the lazy hamster, the fast rat and the rest of my 2 min chart indicators

  • Darkthirty

    How do you get ES on TOS?

  • BobbyLow

    Mine is working at the moment

  • Darkthirty

    Prophet isn't running on mine

  • DudePlunger

    /ES

  • raised_by_wolves

    Unfortunately, there are certain things I still can't do in TOS charts.

  • Tooncez

    Like what?

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

    did they try to hide the ramp in progress?

    we didn't get a true bottom on this last move, then we had a bulish divergence and now… no true top either, but maybe it could do the trick, otherwise it can get dangerous (as in ramp to EOD)

  • sloth_bear

    I'm very bearish for this EOD… What is your basis to call true tops and bottoms?

  • Brishort

    Out of scope question.

    Before I had a day job, I always used Metastock and loved it. I still have it at home but stopped subscribing to feeds, got expensive if not using it during the day, I now rely on stockcharts while at work.

    I see nobody does Metastock here. Any reason why Metastock is not loved?

  • Darkthirty

    thanks, can ya tell me how to change the time frames? I'm trying to scalp off a year chart

  • Tooncez

    icon to the left of 'style' in the upper right

  • Darkthirty

    appreciate the help

  • Nightwind

    Good program, I used it for years but now I use TOS and stockcharts to do the same thing.

  • raised_by_wolves

    Like custom timeframes necessary to calibrate variable moving averages (there is no ThinkScript method to achieve this).

    Like complex ratio charts that make use of multiplication operator (I intend to remedy this with a new ThinkScript).

  • raised_by_wolves

    I'll search for the settings after market close.

  • http://evilspeculator.com molecool

    Come on! 34 more comments – we can do it!

    Unfortunately there is a…

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

    Stainless Steel, daily MA(52) would be closest to 2 hour MA(208), correct?

  • neohguy

    It's cool and mild in Akron today.

  • ricebowl

    Possible formation of a nasty IH&S targetting ~1250 *if* the downside does not continue and break below 1040.

  • LilSpaniard

    Nice call on ZL mole

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