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Winter On The Horizon
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Winter On The Horizon

by The MoleSeptember 30, 2016

Winter is on the horizon and I’m not talking about the annual season. In my mind there is only one way to describe the price action as of late and that would be ‘highly unsettling’. Very little out there makes sense anymore and it ‘feels like’ as if the entire contraption is being held together by duct tape. As it’s the last trading day of this month and confusion is on the rise a momo update seemed most appropriate.

2016-09-30_spoos_setup

Before we get to the momo charts here’s today’s E-Mini setup, which actually stands in pretty stark contrast to the remainder of this post. I’m currently long with a stop near 2135 but don’t recommend you follow suit unless price drops back toward 2142 or lower.

Once again a short position on a drop below is considered plan B. However depending on the velocity and participation I would probably like to see a little retest higher before taking out any short positions. Plus it’s Friday and holding any positions over the weekend is rather risk these days. If we’re pushing sideways again and end up closing near current levels then I’ll be sure to cash out my chips before the bell.

2016-09-30_skew_inverted

So let’s drive right into the deep side of the pool. The inverted SKEW has been producing a pretty clear descending channel over the past few years and a touch of the upper ranges is usually followed by a correction. I’d however say that we still have a bit of room here and although nothing is chiseled in stone a drop below 123 (higher on this inverted scale) would get me more interested.

2016-09-30_skew_vix

Here I charted the SKEW against the VIX and it’s now back in the red. Remember what I said about this chart and the compressed range? That diagonal is advancing quickly and I think we are running out of rope here. The bulls better kick this thing into gear now because there is not much time left.

Alright now to the really good stuff. If you’re not a sub then remedy this personal flaw by pointing your browser here.

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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.
  • Mark Shinnick

    Short miners earlier this morning. $ hanging in there.

  • Yoda

    Thanks Mole

  • kudra

    nice entry

  • Ladywandering

    good stuff as usual, have a great weekend!

  • Mark Shinnick

    These crazy 3x instruments offer both wild contangos and backwardations. The stability here has been the $

  • http://evilspeculator.com Sir Mole III

    Thank you :-)

  • http://evilspeculator.com Sir Mole III

    I think you should change your name to Mark ’49er’ Shinnick 😉

  • http://evilspeculator.com Sir Mole III

    Up-she-goes-y!!

  • http://evilspeculator.com Sir Mole III
  • kudra

    fake out?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Mark Shinnick

    :)

  • Mark Shinnick
  • http://evilspeculator.com Sir Mole III

    hey I just work here 😉

  • http://evilspeculator.com Sir Mole III

    LOL – I loved that episode…

  • BKXtoZERO

    I just put other half of VIX back on again, TVIX 17.85

  • Mark Shinnick

    Yeah..the show’s subject matter reminded me of Return from Tomorrow
    Book by George G. Ritchie, a MD who described to all his medical boards his observations (while known at that time to be clinically dead within a Army hospital) of the hijacking of persons bodies by disembodied spirits.

  • http://evilspeculator.com Sir Mole III

    How long are you holding those campaigns?

  • http://evilspeculator.com Sir Mole III

    And that is why we ignore the news… DB train wreck turned out to be a sucker play:

    http://www.cnbc.com/2016/09/30/deutsche-bank-spikes-after-report-it-is-near-doj-settlement.html

  • Ladywandering

    Is there any value in just extending out the line on the zero

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Ladywandering

    Or can you say divergence

  • BKXtoZERO

    last half was from last Thursday peak when TVIX was 17.90, I held that. Added 1/2, dumped a half. added half today, may close all if it rigth soon if strength persists.

  • http://evilspeculator.com Sir Mole III

    I was thinking about it but since it was already broken I didn’t do it.

  • http://evilspeculator.com Sir Mole III

    Short term then – okay, cool.

  • Ladywandering

    I was just doing it in my head thinking the break yesterday was a false positive – it’s Friday not doing much trading wise anyway. Thanks

  • http://evilspeculator.com Sir Mole III

    It’s possible of course. For now the tape is moving in our favor – no reason to mock with it.

  • http://evilspeculator.com Sir Mole III

    Are you actually working or what does explain your absence? 😉

  • Mark Shinnick

    Objective for this trade obtained. However, we are also at a inflection point for a gold miner intermediate trend change.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Yes, it’s that time of the year when Managers crack the whip.

    It’s month end also, no trades for me.

  • http://evilspeculator.com Sir Mole III

    That would be 3 for 3 profitable ES campaigns in the past week :-) Anyone trading along here?

    https://uploads.disquscdn.com/images/7894e576df12a3dbbac96c013956342e179976125b3edf8e50c162f9b6a44109.png

  • http://evilspeculator.com Sir Mole III

    No beer for you, gold gerb!

  • BKXtoZERO

    You didn’t tell me :-(

  • ZigZag
  • Mark Shinnick

    …only by not being short :) Waiting to strike.

  • Mark Shinnick

    We better stick together.

  • http://evilspeculator.com Sir Mole III

    I hope it’s not contagious!

    Seriously though – it’s still early days but from a LT perspective it’s a possible early accumulation entry. I’ll be sure to keep an eye on this.

  • ZigZag

    Yeah, small like 1 /xc (mini corn), 1 /zo and 1 /zw call spread with tight stops.

  • http://evilspeculator.com Sir Mole III