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Where Were You On 9/1?
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Where Were You On 9/1?

by The MoleSeptember 23, 2010

I just received a very nice email from a new Pimp-A-Thon sub who after seeing the Zero in action today seems to like what he sees. But one comment of his gave me the idea for this post:

I learned about your website from Tim Knight’s post following Sept. 1 when the rug was pulled out from under the bears. I wished I’ve had the zero then!

Well, as the Million Dollar Man quote goes: We have the technology! Since ThinkOrSwim has recently bestowed us with more historical data (or was it hysterical?) let’s just see what the Zero did in early September:

I think the chart should be clear. We all remember the divergence that developed in starting August 24th into the end of the month. This was followed by a drop to 1044 on the 31st which was accompanied by a push above the zero mark. That in itself was a textbook divergence. And of course that was followed by Ben’s candle of death on September 1st wiping the floor with anyone caught shorts. You can go back to my posts back then and you will see that I was extremely suspicious – one of the reasons was the Zero as well as the non confirming daily Zero.

I have put a bunch of comments on the chart – feel free to discuss them and your own thoughts in the comment section.

Since I have been getting dozens of email about how to get the freebie I may as well put the info into this post:

How To Join The Zero Pimp-A-Thon

If you are interested in joining the Zero Pimp-A-Thon you don’t have to write me an email anymore. Just go here to sign up. Simply choose ‘Zero Pimp-A-Thon’ from the selection of available products – enter your info – and you’re done! Please be aware that this free trial is not available to existing Zero subscribers. Sorry – I have to somehow keep the lights running deep down in my evil den of doom.

After you sign up I strongly suggest you peruse the tutorial, which you can find here.

You may notice that the ‘daily Zero’ has not yet been covered in that tutorial since it’s a relatively new edition. I may just use the article posted on the Slope as a template as I think it describes its use pretty well. You may also want to pull up the ‘zero category‘ on my blog which gives you dozens of postings with great examples of how to use the Zero to your advantage.

The Primary (hourly) Zero and the Zero Lite (5-min) run only during NYSE hours and are both available here or from the menu bar on top of this blog.

The tutorial has links to both, Firefox and Google Chrome auto-reload plug-ins – which keeps you from having to press that reload button manually like a mad monkey. I suggest you set it to 20 second intervals as that is how often the Zero is being refreshed on the servers side. Please bear in mind that the daily Zero only gets updated manually once a day – usually right after the closing bell. If you’re using IE – well – shame on you and this is a great opportunity to switch to a real browser πŸ˜‰

If your desktop is already crammed – have no fear. There is even a Windows QuickChart utility available for Windows, which allows you to pop the Zero up on your desktop when your boss isn’t looking. A new version has been posted today, so if you had any trouble logging in then please go and download the new version.

What else: I sometimes put little sticky note comments on the Zero chart during trading hours when I deem it appropriate. No, these are not trading signals but rather my interpretations of what’s going on. Most Zero noobs appreciate those hints as it expedites their understanding of how to read this valuable indicator. But no worries – you should catch on in a matter of days – it’s not brain surgery after all.

Finally, your trial subscription will also give you early access to all my blog posts – you will receive an email when a new post is available. That’s it for now – thank you for your interest and if you have any questions or difficulties just shoot me an email to admin at evilspeculator dot com and I’ll get back to you within a 24 hour period.

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.
  • Long_John_Silver

    Hey Mole – thanks for all your comments on the Zero during trading hours – always helpful as I'm not sure I'm quite getting it yet, to tell you the truth.

    For example, after that “conductor's swing” you point out, it looks to me like the Zero is painting a pretty serious divergence ending in that descent below the zero, lasting about four sessions.

    Am I seeing this wrong? Whatever – as I say all your comments are helpful so please fill in all you can. I just might need a tutorial for the pattern-impaired in any case – cheers, ljs

  • ds2

    That 8 followed by a 5 sure looks bullish to me. I might have chickened out on the -2 tho. Looks like a good divergence w/ the beginnings of some follow through. How does one keep from getting shaken out? Now a few days later Mole has drawn a descending divergence line in the green box above. What if we extend that all the way through today??? Does it fit? I can't really tell. I'm nervously long a small position at this point. Fortunately it is in the Q which doing much better long than the ES.

  • http://evilspeculator.com molecool

    I knew you guys would jump on that big spike on the 1st and 2nd. Yes, but consider that this was the first big wave and everything after that looks like a divergence. But a 'real divergence' happens at the 'end' of a medium term tend, not at the beginning. That's what I meant. Maybe you guys disagree but I would personally not mistake a slight decrease in the initial buying frenzy as a sign to go short. Hope this makes sense and does not come across as mental masturbation.

  • http://evilspeculator.com molecool

    WOW – did anyone see that jump in the AUD/JPY just now?

  • telacimr

    Guessing it's BOJ intervening again.

  • telacimr

    The first intervention gave back half its gains in about a week. Would be funny if this one gave the gains back even faster. The wheels might fall off the global market cart, if that happens.

  • http://evilspeculator.com molecool

    I actually recorded some video of the move:

    http://www.youtube.com/watch?v=_NeCvBCZbC8

  • telacimr

    Nice.

  • chronographics

    yah They say its BOJ but no confirmations :-)

  • http://gemstowear.etsy.com Jan

    Nice, Mole. I hope many get on the zero wagon, especially since it includes your charts and commentary (can't trade without them IMO).

    I was zzzz'ing out when that BOJ intervention occurred. Holy shit, if you hold overnight you must have your trigger finger ready for this kind of shit. WTF.

  • raised_by_wolves

    Mole, you take out NoVolumeMeltup, and I'll take out Millivanilli (or the other way around if you prefer).

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/f2ad416a-9008-401e-bd42-c1651b6765e5/00002184.png

    How about throwing stars followed by a close range attack?

  • 99er
  • raised_by_wolves
  • raised_by_wolves
  • chronographics

    Yup this is true and every little bit helps. I am away most of next week so wont be posting much, BUT I do think next week could be fireworks. So I might leave a few call levels.
    Hope you stay safe and profitable :-)

  • Tooncez

    it's not happy here either.

  • raised_by_wolves

    support@thinkorswim.com has heard from me for the umpteenth time.

  • RFScooter

    Have things taken a turn for the worse after the takeover? I'm always keeping my eye out for something better…

  • raised_by_wolves

    Thanks Crony. Have a better one :-)

  • Tooncez

    Related to the last post, For fun – a back-test of divergence between tnx and spx to the downside crossing a threshold.
    The threshold was just missed this week:
    http://screencast.com/t/ZmFhNTg3Z

  • raised_by_wolves

    That's my impression. I'm not giving up on TOS yet, but let me know if you find a better broker/platform.

  • raised_by_wolves

    +1

  • RFScooter

    I've been with just about all of them. Some I don't mention in polite conversation…makes me feel dirty (*mbtrading*cough). And I might be changing again shortly because I have a day job and thus limited to what the company filter will allow. When mole posts hot chicks I can't read the site for like a week until it gets dropped from the front page.

    btw, I saw your photo from earlier. Very nice. My sister is professional photographer so I've learned to appreciate it as an art form. There is something special about a carefully developed, well thought out black and white photo.

  • raised_by_wolves

    By the way, I supply BOJ with trend line analysis for free. Should I start billing them? πŸ˜‰

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/8e4cbe65-bc09-491b-bf9b-3bad203e7a8c/00002187.png

    Nice save, huh?

  • raised_by_wolves

    "btw, I saw your photo from earlier. Very nice. My sister is professional photographer so I've learned to appreciate it as an art form. There is something special about a carefully developed, well thought out black and white photo."

    Thanks, did you notice that my photo wasn't a single horizontal composition but three verticals side by side?

  • raised_by_wolves
  • raised_by_wolves

    Prophet charts are working again. Hurray!

  • RFScooter

    I did. Very nice work. Not only that, but it reminds me of the house I grew up in. Double nostalgia.

  • RFScooter

    Unfortunately all bulletin boards are blocked, but I just started watching Mad Men from the beginning about a month ago and just finished season three. Joan is definitely top 5, but I've got a thing for the teacher. Carefree but possibly has a few screws loose. Why I pick the crazy ones I do not know. The nomad chick was bangin…she's a close second. Never did understand who those people were. And number three…

    http://www.drfunkenberry.com/wp-content/uploads/2010/02/christinah.jpg

  • raised_by_wolves

    I don't have TV so don't watch Mad Men so didn't know who else I was missing. Doesn't matter though because I'm loyal to my secretary πŸ˜‰

  • raised_by_wolves

    Any interesting situation for tomorrow would be if $SPX moves up and $VIX moves up too so that $SPX/$VIX stays flat.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/aa008c29-1f79-4b54-8a67-c11c432145f2/00002188.png

    This is in no way a prediction. I'm just going through scenarios before bed.

  • raised_by_wolves

    Hmm, the opposite would be interesting as well.

  • http://thefxspeculator.blogspot.com Onorio

    I just wanna say something about the BOJ intervention….

    LMAO!

    USDJPY broke yesterday low and is now 100pips bellow today high…..SUCKERS.

  • chronographics

    Interesting, I think as they (BOJ) have the printing press – it's not like they have to use their Foreign Reserves to support their currency. I think the real test is where will the Yen be in a month or three from now :-)

  • legobear

    Yeah, there's is huge speculation of intervention. I think China is buying Yen to counteract BOJ. As you point out, Yen is almost back to where it was before the supposed intervention now.

  • chronographics

    Its kind of like this, BOJ used to intervene (selling Yen) and then later suck it back out of the system, however now they are not doing this ie they are just selling straight Yen for USD and leaving it in the system – hmm more Yen same amount of USD – unless Helicopter Ben drops another load of Dollars. Think this is why this time the BOJ has just done a straight sell. BOJ don't get margin called Think they can keep this up for some time. Don't confuse this with the raid Soros and others did on Sterling a few years ago.

  • chronographics

    They (China) are buying Jap Bonds

  • legobear

    Oh yeah, it's what I meant :)

  • 99er

    Some Charts

  • gsavli

    anyone else feeling stupid besides me with this durable goods news?

    ever since this rally started, every stinking piece of news at 8:30 is used for pushing tape a bit higher. “Badger farms sold 0.7 less badgers this month” – bam, and tape goes 2% higher in premarket.

  • rae17

    Yes – and in two weeks the badger farm sales will be revised from +0.7 to -0.5.

  • 99er

    Chart: DX
    A bullish Gartley has evolved into a bullish Butterfly.
    http://99ercharts.blogspot.com/2010/09/usd_24.html

  • Schwerepunkt

    Holy Mother of GOD!

    And I'm not even Catholic . . . ;^)

  • Eva S

    Don't worry, Schwerepunkt. Nobody's perfect. :-)

    There's still time for bears to realize the market is going much higher!

  • Bob the Horse

    Just watched all my gains on the Oct puts evaporate. Annoying. Typical Friday – will carry on running them for a little while yet however, I will get a pretty decent size short on the Euro at 1.35

  • amokta

    We go up, we go down, but we don't turn around?

    Futures up, oil up, (lean hogs up?)

    Anyway, still holding shorts – lets see todays action

  • Eva S

    I'm enjoying my AMD calls, +90% this a.m. Hopefully will go much higher. :-)

  • Nightwind

    I'm guessing that we are in the final 5th wave up

  • gsavli
  • bluprint

    ZL strong like tiger.

  • WTFed

    Time for Monks on Roller Coaster

  • http://pulse.yahoo.com/_WT77LFNXN7HDLZ6GUPXUJ25P5I Ed

    The SPX Inverted H&S is playing out. Not the H&S as we all thought. It is time to cover.

  • 99er

    Chart: ES
    Clearing out the stops…
    http://99ercharts.blogspot.com/2010/09/es_7285.html

  • WTFed

    Time to fade?

  • gsavli

    This is an excellent risk- reward short. I'm going to buy some puts – probably NOv 140 or 145.

  • gsavli

    most definitely.

  • Nightwind

    Copper breaking above bear wedge nearing previous peak

  • WTFed

    Now that we can all talk about the Zero. It would seem to this nube that it is signaling a trend change. What say ye?

  • amokta

    Nice, i think the Bulls have the run of the hoose

  • gsavli

    where will they run? NQ is 35 points from the new post-dot-com crash highs.

  • http://pulse.yahoo.com/_WT77LFNXN7HDLZ6GUPXUJ25P5I Ed

    David Tepper on CNBC basically says don't fight the Fed. Either the econ gets better on its own or the Fed will support the market.

  • Eva S

    I did point out the possibility of an inverse H&S 9 days ago. For some reason my post was deleted by the moderator and only the response remains.

    ————
    Eva S wrote:

    Is anyone seeing the bottom in semiconductors and a possible reverse H&S in S&P500 (with a 1131 neckline)?

    99er wrote, in response to Eva S:

    The possible IH&S may be trying to fool you; today's doji candle looks limited to the upside by several trend lines, as seen here:
    http://www.screencast.com/t/ZmFmOTdlNGU

    Link to comment: http://disq.us/mk26l

  • 99er
  • Moleasses

    wave 3 ended on 9/21 we are now in wave 4. we must make a new high to compleat but wave 4 often does abc of witch we are possibly in b,and c down still to come.so 9/21 top remains key to how soon we make new high! if 4th wave compleated on 9/23 then new high today. my target 1156-1159

  • Brishort

    Good day all!

    How to react to this morning?

    I am still standing aside this damn market.

    Won't post any chart that look bearish or go short unless this simple grid is fulfilled (in a top 5 reverse order, Γ  la Letterman):

    5) We have a real nice long (around 2%) red candle down on the daily SPX or NDX.

    4) We have at least ticked a 3 box reversal on P&F daily

    3) We are nowhere near 1130: the trampoline sadistic new toy of bulls

    1) the zero has shown us some below zera significant readings

    But THE most important one:

    $$ Bucky has shown it is a man and not a whimp. It is simply miserable here. And I don't believe in any serious market downwind without Bucky up.

    Good luck to all today!

  • gsavli

    …maybe.

  • 99er

    Chart: ES Daily
    S&P futures' upside appears limited. Buckle up.
    http://99ercharts.blogspot.com/2010/09/es-daily.html

  • Brishort

    Sorry for the spacing, Disqus and IE where I work (I have no other choice) screw up the formatting everytime I edit the typos.

  • OldChicago

    The market may well be bullish from this day on, but spx looks tired. We could just go side way since the bear couldn't take it down at the open. All the news there is are out.

  • gsavli

    AAPL is a laggard today in comparison to NQ, while AMZN is in a berserk mode.

  • Brishort

    Agreed and look at the $vix… bulls transformed it with $$bucky into their slaves and annihilated all their self counciousness to make sure they remain zombies. I guess that is an improvement over the bears trading accounts which they just simply annihilate…. but writing this is not even funny 'cause it's scaringly true.

  • http://evilspeculator.com molecool

    Which Zero? The ZL signaled a potential bear trap yesterday and that's what we got.

  • gsavli

    I really don't know anymore, whether this is still a short squeeze, or momentum trade or some wicked “new bull market” shit with bulls and inflation theorists just jump into stocks, no matter what.

    I do know though, that I'm literally tired of this shit.

  • http://evilspeculator.com molecool

    Was not deleted by me. BTW, I proposed that H&S in late August πŸ˜‰

  • http://evilspeculator.com molecool

    This is gonna get ugly…

  • Eva S

    If not you, it may have been Wolfie. I understand 99% of posts here are bearish, but bullish posts should be allowed as well.

    BTW, semis were an excellent leading indicator! Go VLTR!

  • WTFed

    The 5-min Live chart on the right. To get a divergence, does the white line need to regress all the way back down to the zero line?

  • http://evilspeculator.com molecool

    Again, for the umphteen time: The ZL strongly suggested a bear trap yesterday.

  • Bob the Horse

    Right – am short to the gunnels ( wtf are gunnels anyway) on EURUSD, about 1.3485 ave price.

    That's me done for the day, back on Monday for fun and games. Today was a shocker.

  • http://evilspeculator.com molecool

    Look back at my posts of the past six months – half are bearish and half are bullish.

  • http://evilspeculator.com molecool

    Why was today a shocker? It was a clear possibility.

  • Eva S

    You complained about the lack of participation on this blog. You should not allow your moderators to remove good posts, at the very least.

  • yudhisthira

    Want to reshort at some point in case yesterday was the 4th of C.
    5th wave in progress.
    http://screencast.com/t/MWYyMjQ3OW

  • Bob the Horse

    In P&L terms – price action didn't particularly surprise me but the magnitude did. Anyway, on the bright side, has taken the EUR to a decent selling zone at 1.35 so I am happy being short EUR and equities into next week.

  • malverd

    Gunnel (fish), a family of elongated fish
    Gunnel (ship element), the top edge of the side of a boat πŸ˜›

    BTW, I'm watching the weekly S&P 500. If today closes above the 6/21 high of 1131.23, then not so good for the bears. Otherwise it will have acted as resistance…

  • http://www.stringmandalas.com LosGatosCA

    ES indicators – 6 timeframes at 11:35 EST:

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

  • Bob the Horse

    Easy pussycat. Just repost it and stop whining. It takes a lot to get comments removed on this blog – even Katzo was tolerated for a bit. Not long though.

  • Eva S

    It was NOT a lot – just a bullish prediction! LOL!

  • OldChicago

    And today a bull's trap? The sentiment is so strong since 9/1. If we can get bullish them, we should be bearish now. No? :(

  • Moleasses

    hey losgatos,just curious,why you dont use all sessions?

  • Brishort

    Dear Mole,

    Another non time sensitive question related to HS and maybe even Geronimo. (BTW, what are the recent stats on Geronimo? I may be interested to start with it but the latest stats date from Feb 2010 from what I could see).

    Instead of going with futures on SPX, have you ever tried running the stats if you used SPX CFDs on SPX as provided by Forex.com or CFXM.Com?

    Friction of costs is then only the spread always standard @ 0.50 (therefore 1$ roundtrip). It turns out to be less than futures from what I understand.

    Possible benefits:

    1) FX brokers mentioned integrate with C2, Tradezulu, tradebullet, ninja, tradestation or whatever else you look at.

    2) You broaden your appeal to worlwide as FX brokers don't have as much regulations than fut or equities brokers.

    3) Foreign clients can avoid the US regulatory burden and deal with the UK instead but with the full technology equivalent to any US platform.

    4) Foreign clients will benefit from the 100:1 margin for trading the CFD and the US clients will have (new regulations) the 50:1 margin (new CFTC max). It is also real-time margining which keeps all in check.

    5) Your clients benefit for recognized and solid counterparties, which is not always obvious with other smaller brokerage firms in the US

    6) Clients do not need to have an account only for futures, and can be at least dual products, i.e. FX & equities indexes via CFDs.

  • BobbyLow

    Speaking of the Bull/Bear Argument, one of the few things keeping me sane today are the SPY Calls that I put into my account to control the amount of bleeding that could occur on days like this. Another few points to the upside and I'll probably be Delta Positive. So todays move is a disappointment but my account is still alive.

    BTW, Bullish or Bearish is no longer my main issue. My issue is survival among the HFT's, Buy Bots, and whatever else driving the market.

    Also for Eva, I can't imagine anyone deleting your post. There was nothing in your post that was offensive. There are many occasions that traders who participate on this Blog trade to the long side myself included.

    Based on what I see in the real world, I have to hold my nose to go on the long side but when I do it is because my survival instincts have ultimate control over what I do in this market. This unfortunately for me was not always the case. The most difficult choice I have to make is to continuously fight my personal logic and what I consider the illogic of the Stock Market.

    OTOH, the Tape is the Tape and does not have to be logical because whether a Bull Shit move happens or not, the Tape has the power not me.

  • Deja Vu Trading

    While bulls might be celebrating and believing this was a true “breakout and back test”, quietly, behind the scenes, large traders (bears) are probably celebrating. What the bulls fail to consider is where we are now and what it took to get to this point.1. Volume so low that brokerages are losing a ton of money and having to lay off workers. Take a look at Charles Schwab stock over the past few months to understand. (When is that low of volume a great time to buy?)2. Near 10 year highs on % of bulls surveyed.3. RSI negative divergence confirmed today — higher close on lower RSI4. NYMO negative divergence confirmed today — higher close on lower NYMO print5. Extremely high ISEE readings on index callsAlso, does this look familiar to anyone?http://stockcharts.com/h-sc/ui?s=$CPCE&p=D&yr=0&mn=8&dy=0&id=p10687613879&a=202131234All I would suggest is that people exercise some caution here. Not that I suggest it’s going to sell off or anything…80% short 20% cash

  • amokta

    According to Anthony D Allyn, “time to give it all back”

    If he is wrong, he will be another 'Guru' we will have to strike of the list market Guru's !

  • http://thefxspeculator.blogspot.com Onorio

    Well….just another POMO day.

  • Brishort

    Sorry scrap the friction cost point, cost is higher. This may be a moot point then for scalping.

    To better measure the friction costs, what is the average scalp win in % for both systems?

    Thanks!

  • http://www.stringmandalas.com LosGatosCA

    No particular reason. Maybe just habit.

    The afterhours are very thinly traded, so while they can precipitate large opening moves (like today) they have little volume.

    I'm certainly open to advice on reasons why I should.

  • 99er

    From someone who has posted everything from beer reviews to poetry and all sorts of videos, believe me, it's probably impossible to get deleted here except perhaps by accident.

  • yudhisthira

    The Zero 0.00 line looks impervious.
    Another divergent peak to go short term, perhaps.

  • Eva S

    I wonder if Gary UK will show up today…

  • Long_John_Silver

    That's 'gunwhale' on a boat – cheers, Captain Silver

  • Long_John_Silver

    Keep your ideas coming – AMD was a goodie –

  • Eva S

    OK, I will assume my post just evaporated spontaneously & will not mention it again & will not take this against Wolfie. :-)

  • 99er
  • amokta

    I have yet to read his blog today!

  • Bob the Horse

    I'm sure he has another persona which is ultra-bullish – no doubt he is on some other blog taking the plaudits.

  • raised_by_wolves

    Eva, I wouldn't delete one of your posts without a good reason such as you posting flashy pictures of girly men.

    Because DISQUS sometimes randomly eats comments, I always copy what I write before I post.

  • Eva S

    The dollar still looks bad. Where is the next line of reasonable support?

  • Eva S

    LOL. Sorry about accusing you…. I thought you were sleeping and not seeing that I was writing about you. πŸ˜‰

  • raised_by_wolves

    Mole even made it explicitly clear for everyone: “Again the daily zero seems to disagree despite a third day lower.”

  • raised_by_wolves

    AAPL has maybe 100 points to go before I short it. That's not a big deal when you look at the last 20 years with log turned on.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/c447077e-485c-4bae-8c47-62cfa0c4dc64/00002189.png

  • raised_by_wolves

    I forgive you. This one time anyway. πŸ˜‰

  • 99er

    Not too concerned about lower support at this point. Check out SPX on a weekly basis: we're at the 61.8% retracement from the absolute high. Will someone with a longer-term chart share theirs? Folks: “Timber!”

  • Eva S

    VLTR is another good one. A long way till it fills the gap.

  • Anonymous

    Depends on your definition of Ugly – after all it is a relative term, few more of RBW’s beers and it all looks good :-)

  • raised_by_wolves

    $INDU has actually been relatively kind to bears by not moving below purple. That would have been a evil fake out. What actually happened was the same familiar fake out that occurred repeatedly in November.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/df094308-f6d0-4f97-8e3a-7ec9cd8b1f7a/00002190.png

  • sloth_bear

    Hi 99er,
    I'm just passing by…
    Here is what I see:
    http://screencast.com/t/MzVhYmZhZTIt

  • 99er

    Thanks. Despite all the FX intervention by so many central banks, I think the shit is about to be thrown by China; since CNY is not traded, look for an effective Yuan devaluation by other means.

    Also: look at SPX on a weekly close. The weekend may be off to a great start (for Bears). Yummy.

  • 99er

    Seattle is said to be a gloomy place: do you have a similar chart with down channels?

  • Moleasses

    line in the sand 1144es selling with 1145 stop?

  • WTFed

    Congrats on ZLs success yesterday Mole. Now to learn to use it as well as you do, or even half as well. Ok, I'll settle for a quarter.

  • http://pulse.yahoo.com/_WT77LFNXN7HDLZ6GUPXUJ25P5I Ed

    I follow Ron Walker ..Last night he said” 9/23 Commentary: Today I added to my long positions on SPXU and TZA. Both the 15- and 30-minute charts flashed sell signals on the S&P 500 and Russell 2 K, prompting me to take my positions after the gap fill. You can see how I did it in tonight's video at TheChartPatternTrader.com. I'm all in.”

    He must be hurting pretty badly now.. 2 lessons we can all learn from his misery, respectfully,…always allow possibility for the opponents (bulls) to win and as Richard Eckhardt had said…the damn charts don't work 98% of the time.

  • OldChicago

    This tape feels like HAL is in charge, wearing bulls & bears off.

  • Eva S

    I only was short JPM (via puts) and sold it yesterday. It was pretty clear that only banks were weak, and tech and especially semis were going up. That's why I bought the AMD calls.

  • WTFed

    Am I correct in seeing a massive divergence on the ZLI? Anyone seeing that?

  • http://evilspeculator.com molecool

    Sorry for being quiet – I just submitted another Slope post which should be posted in an hour or so…

    Remember, today is the last day of the Zero Pimp-A-Thon – so take advantage of it now.

  • BobbyLow

    I don't expect anybody to remember or care, but back in May, I posted about making close to a free trade by buying 8 December SPY 105 Put Contracts for a gross $7.13 per share costing a total of $5,706 and then Legging in a while later with short puts against the position. In May, there were 7 months to go and Hell P3 was just around the corner. Since that time, I have Legged in and out 6 Times with Short December Puts that have reduced my net cost to from $5,706 to $1,787.

    It is with regret, that discretion has become the better part of valor and I have just sold those December 105 Puts for $1,634. which resulted in a total net loss of ($153.) RIP

    I suppose that I could claim moral victory because if I had not continuously tried to work my net cost down by selling puts against the position, my net loss would have been $5,706. – $1,634 = ($4,072.)

    I still own 28 other SPY Put Contracts most of which do not expire until March and June.

    So as of right now, I am Net Delta Positive while being Long Term Short and Short Term Long. With EOM and EOQ Dressing coming up next week who know what could happen? I sure as hell don't.

    In the mean time, this is partial capitulation on my part which means that the market could go into complete flash crash at anytime. :)

  • OldChicago

    Which time frame? The sideway movement almost killed the divergence on other indicators.

  • WTFed

    The ZLI (5- Minute). It may be resolving, and I may be totally batty, but since the spike on the open, the white line has been trending down with lower tops while the ES has been climbing.

  • yudhisthira

    Impervious 0.00 Zero line again.
    Five waves up from yesterday bear trap. Maybe just one of five.
    Zero lite making higher number than last little bump up.
    Divergence my resolve to upside, you think?
    AUD/JPY supporting up move.

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Hey there.

    Could you please elaborate on what you see on a weekly of SPX that makes you think yummy? Thanks very much.

  • WTFed

    You are correct in that the Zero line is seemingly impenetrable and from the looks of the Tutorial, you really get things moving when you diverge then break it. As it stands right now, the divergence I was seeing is looking like it flattening out with the ES.

  • raised_by_wolves

    If you're talking about that massive spike up on the Zero Light at today's open followed by smaller spikes, that's not the type of divergence that Mole gets excited about since that is the beginning of the move up. Mole explained this recently.

  • WTFed

    Thanks. I need to do more reading.

  • 99er

    I tried to make a chart using Prophet (it sucks) but perhaps you have better software: the SPX is very close to a 62% retracement of a major high (1576) and this would mark the top of the second right shoulder in a complex H&S (1220 as the head). The rise since the neckline appears to be a Bear Flag. (A picture is still better than words so I'll try again later.)

  • raised_by_wolves

    Unless there is a break below the daily MA(208), I would not short $SPX with or without a complex H&S within a monster Bear Flag. I would feel a lot more comfortable shorting 30 points lower or maybe 100 points higher. Not here. No way.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/49afde32-0599-47fd-995d-2ca72a82e9a1/00002191.png

  • yudhisthira

    0.00 line again. Are we watching computers at work here?

  • amokta

    Are you still brearish – market seems to have run away up!

    Eva, no doubt was wondering (im paraphrasing) if its time to eat humble-pie?

  • BobbyLow

    FWIW, the last 5 – 15 minute Candles on ES have been a Doji with about an average 1 1/2 point range. Must be saving up energy for the EOD run.

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Ok, thanks for that, I'll do some fibs here.

  • 99er

    30 points lower it is. Have a great weekend!

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Me again. Is not the 62% retracement the 122O level? It is on my chart?

    Perhaps I am missing your point. Sorry!

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Yes, still more bearish than ever, loaded with shorts still, not a lot of breathing space left, but I can trim postions if need be. We'll be off and running soon, you can stick a cork in this and call it a double top, the bulls final effort. Watch out next week, it'll be cooool.

    And I'm at the Ryder Cup!!

  • OldChicago

    Did he (Mole) go by the daily ZL?

  • amokta

    Lets hope so,but only time will tell.
    enjoy the ryder cup (is Tiger there – i think not??)

  • WTFed

    ZL knockin' on that zero line now.

  • Eva S

    I admire your resilience, but I think we may go to 1200 very quickly. I would not short the SPX.

  • Eva S

    Without the ladies Tiger just cannot succeed.

  • amokta

    :-)

  • Moleasses

    we are going down,5wave b wave count up compleat.next stop c wave down 1111es to compleat abc 4th wave, then up to new high at 1158 to finish 5th wave.

  • OldChicago

    AAPL just made new low for the day. Will prob. take Naz with it.

  • omelette

    i have to disagree in general. The divergence WTF was referring to was on the ZL which applies more to intraday moves.

    The beginning of the move up mole referred to was on the hourly chart and meant to be a longer sample. Also I would argue that if you consider this move up as starting at 1040 then we are not at the beginning.

    That being said, given the sideways action and inability to pierce through the Zero line to the downside today, I'm not convinced that this divergence will pan out…

  • WTFed

    Thanks for the response omelette

  • http://iberianviews.blogspot.com/ catracho

    Is Zero showing some neg divergence on the 1 hr??

  • http://www.mylifemytrade.com MyLifeMyTrade

    Top today for a one day 40 pt bear wonder on Monday.. then back to normal. For this to happen, we need a close BELOW HOD.

  • BobbyLow

    So I thought to myself, self, if the plan is to scalp SPY Calls and go from overnight setup to overnight set up while trying to not get killed with negative Delta, why did I buy November Calls to add to my October Calls?

    Why did I need to buy Theta if I wasn't planning on using it? Why did I want to expose the trade to getting killed with Vega if the market decided to croak overnight?

    Before the COB today, I will close out my November Calls and I have already bought more October Calls that also have better Gamma for half the price and half the exposure.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I expect top to 44.5-44.75.. More likely 44.5

  • WTFed

    Looks like it to me.

  • BobbyLow

    This market is so fucked up that Disqus just had another brain freeze.

    And Jeez, now I'm rooting for the Bulls.

    Why do I feel so dirty? :)

  • raised_by_wolves

    You sound like you know what you're talking.

    Since Mole is still giving away 14-days of Zero for free, I don't think he'll mind me posting this chart for clarification. This is the divergence I assumed WTFed was talking about.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/8e8e432b-aee5-451a-bd8e-b9b8c577b12b/00002192.png

    Are you saying that it would have been tradable if the white squiggle had gone below zero?

  • yudhisthira

    11445.5?
    No ramp to end of day?

  • raised_by_wolves

    Sorry, I think I was the blinder leading the blind.

  • Alpha

    “First thing I did was I took $20,000 out. Went down to the Schwab office in Encino. Walked in, said 'Hey, I know nothing. I am making this movie.' [They] set me up with all the Series 7 stuff,” says LaBeouf.

    “Went to George Soros' house for dinners. Hung out with Donald Trump and talked about real estate,” he says. “I'd hang out with Jim Chanos. Nouriel Roubini was like my closest friend through all of this.”

    LaBeouf turned $20K into $650K. Sure, i'd like to see his statements, but come on, this trading stuff is easy.

  • http://iberianviews.blogspot.com/ catracho

    Looks like Mole bashing on SOH….

  • WTFed

    That was exactly what I was talking about.

  • yudhisthira

    Dang.

  • raised_by_wolves

    Okay, good, at least I identified the right thing even if I was wrong about it.

  • WTFed

    I saw that. What a fucking liar.

  • yudhisthira

    RUT resisting any pullback.
    Everything else coiling for EOD perhaps

  • raised_by_wolves

    Looks like Mole successfully defended himself. . . .

    "Ahem - Tim and I are friends and he is the one who posted this (I can only submit drafts). Now if the majority here doesn't want me to post about the Zero anymore than I will discontinue of course. But since I run my own blog I suspect that there is a silent majority who may appreciate this post and a handful of squeaky wheels (i.e. bearish fundamentalists) who generally disagree with my existence."

  • WTFed

    as was I my friend!

  • http://zstock7.com/ zstock7

    FCX 86.6, getting closer to my 88 short sell target

  • BobbyLow

    I'm watching that too and it is helping me stay in the November Calls I want to close out before COB at least for the time being.

    Otherwise it's the typical 3 PM mini head fakes depending on how fast the chart is set for.

  • raised_by_wolves
  • roncofooddehydrator

    At this point a final pump into the close seems inevitable

  • raised_by_wolves

    While blue has made a lower high on the Zero, it has not made a higher high on the tape. Is it really a valid divergence as some of the comments here are suggesting when the tape is flat? Yellow and red were obviously valid. My rule of thumb is trade it if it is obvious and don't trade it if it isn't obvious.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/3840c4e6-aaf4-4c23-aed2-7955d9ab0a5b/00002193.png

  • omelette

    i think the divergence in question was the one on the lite chart on the right.

  • http://evilspeculator.com molecool

    Yeah, it got pretty ugly over there. Frankly I don't think it reflects the majority. There's one big asshat called yazzer who has a beef with me – probably some loser I banned in the past – LOL :-)

    Meh – I can take it – maybe six months ago I would have been upset – things have changed.

  • http://evilspeculator.com molecool

    Hey, where have YOU been?

  • OldChicago

    Is this topping or consolidating? Vol. is anemic, even with all the buying the price isn't advancing much on Naz. Any opinion>

  • http://zstock7.com/ zstock7

    Gonna try a short on BIIB, based on…One of its drugs is being replaced by a competitor.

  • yudhisthira

    Sine wave between VWAP and upper band all day.
    Beautiful.

  • raised_by_wolves

    Yeah, you, WTFed, and I were talking about the lite chart on the right but now catracho and WTFed are talking about the hourly on the left. Would you mind commenting on that as well.

    "Is Zero showing some neg divergence on the 1 hr??"

  • http://www.mylifemytrade.com MyLifeMyTrade

    Been busy taking up the ass

  • raised_by_wolves

    I knew thick-skinned Mole would be impervious to yazzer's uncomplimentary comments.

  • WTFed

    Even though I'm still confused as hell, I'm glad we're all talking about it. I want to master this mofo.

  • Brishort

    Meh… suffice I say we need a 2% long red candlestick on the daily on SPX or NDX to start considering a bear trend scenario and look at what we got…the exact opposite.

    So bull? I couldn't buy this market if you paid me to. Maybe with trailing stops, but even there,t his tape is so crazy, it feels rotten and highly risky. If the upward movement is all POMO, then this is legalized cheating. So I'll just have to live with myself as not profiting at all. I am now almost happy I got hurt so bad on my Sept options, but have since started healing with absolutely no positions, because otherwise I can feel other's pain.

    This is one ugly bitchy sadistic tape for the bears…. I am still short in my retirement account, and taking it up the … there but not selling either. The upward movement since Sept is simply incredible. I would be rich if my bearish positions had just caught half of this upward move.

    Bulls must really be getting very full of themselves and how intelligent they are. And financially they certainly were, but I don't know if any of this tape is healthy for the market long term. We will see…

    Still standing aside, tape too strong for me to short here, none of my TA signals are indicating any weakness yet.

  • omelette

    i think your post pretty much covers how i would have interpreted it.

    I will add that given the common occurrence lately of higher highs on relatively no zero movement i don't usually pay much attention to negative divergences on the hourly. Seems like the positive divergence plays are alot higher probability.

  • http://www.mylifemytrade.com MyLifeMyTrade

    A near perfect set up for a huge down day on Monday. Target ESZ0 1104-1107, which will be a buy.

  • convictscott

    Any actual basis for your opinion, or just blind faith? Market internals were very positive today, breadth 4.58. Once again the bears failed to close the deal after a ramp up on fumes, and how the shorts had to cover again.

    Once again the bulls look at their charts and are given objective undeniable reasons to get long.

    Its the same old story

  • convictscott

    Brishort, I did an experiement recently with a mechanical system using SPX CFD's on cmcmarkets.com

    I'm generally opposed to bucketshops and the counterparty risk they give, but it was with $500 as a test. It worked pretty well.

  • Long_John_Silver

    He explained it but I'm morel confused – isn't the ZL supposed to be predictive? If not, when is it not? IOW, what is it we're to look for – I'm inferring, a change at the end of a move….but isn't that the beginning of the next move – ?

    I thought I understood it until it was explained. Perhaps the obvious eludes me –

  • raised_by_wolves

    My order to sell my SLV calls just got filled a few seconds before the bell. I think SLV may still have room to move up especially if a short squeeze gets triggered but I become a little more cautious when SLV isn't outperforming equities (1% up versus 2% up). So, I decided, “If I can get top dollar before market close, then I'll take profits.” I got top dollar probably because some shorts chickened out and decided to cover instead of holding overnight.

  • convictscott

    That shit on slope is weird. The last 10 bears in the universe huddled together for warmth.

    Fucking losers. Glad to be long today, happy to take money off saps like that

  • http://evilspeculator.com molecool

    That's one issue I have been battling with: Do I consider divergences separated by several days? I think it's wise to keep an eye on this one and perhaps to look out for a continuation. We have barely made new highs here – so if we push higher Monday/Tuesday on an even weaker signal I would give this more credence.

    Make sense?

  • http://evilspeculator.com molecool

    LOL :-)

  • http://evilspeculator.com molecool

    Ouch! Vaseline is your friend.

  • http://evilspeculator.com molecool

    Yes, it's all about time frames – today was a POMO day and of course the signal degraded a little after the initial ramp. But it never dropped below the zero mark and that indicated that we would probably retain those new highs. Divergences happen when you see HIGHER prices along with LOWER readings. In theory the tape pushed a bit higher with a lower reading – granted – but in the context of an early POMO day ramp it was nothing to get excited about. Context is everything. I would have gotten more excited had I seen a pattern like this at the EOD.

  • http://pulse.yahoo.com/_WT77LFNXN7HDLZ6GUPXUJ25P5I Ed

    With due respect, you have the same psychology I had in 2003 when I short the market on its way up (and cried like a baby) until I learned to become REALISTIC rather than FATALISTIC about the market …and learned to stand in the WINNING side of the trade.

    I am (humbly) on the winning for now,…this is how I will play it next week…. BUY the DIP. This is the path of least resistance and I am sure the bulls would do the same.

  • convictscott

    Is it a case of discounting the divergence that comes initially after the ramp off a very large positive reading?

  • raised_by_wolves

    Weren't the yellow and red divergences on the hourly were predictive? The one showed that the tape moved up too fast and would likely pull back. The other showed that while the tape moved lower the internals strengthened so smart bears should have exited their shorts and maybe even considered going long (blasphemy, I know).

    On the 5 minute, the tape only went below zero once today, right? And it bounced right back above zero and is now pointing up, right? I'm not a veteran user of the Zero, but I didn't see anything that was predictive of tomorrow (er, wait it's the weekend, isn't it?) going significantly lower.

    I still exited my long position, some Oct SLV calls partly because SLV/SPX was down today and partly because there's a lot of theta burn over the weekend.

  • Piano_Man

    actually, I had the same perspective. tagged stops on the way dn yesterday and killed many shorts today.

  • http://www.stringmandalas.com LosGatosCA

    ES indicators – 6 timeframes at End of Dya, End of Week:

    http://www.screencast.com/t/MDRlNjY4ZG

    My start-up has lost some ground in the GE Challenge to some up and comers.

    If you voted for my start-up's idea following the instructions at http://www.filtrationdynamics.com/vote

    then please click this link to ensure that your vote was recorded:

    http://challenge.ecomagination.com/ct/ct_a_view_idea.bix?c=ideas&idea_id=E3ABA25A-02EF-40B4-9CE3-6952E1786C05

    You should see “Thanks for voting”. If not, please click the “Vote for this Idea” button.

    Thanks and have a great weekend.

  • yudhisthira

    Well, I will go for that kind of Monday.
    I will doubt the buy there, but I think you did call the ES top today as it occurred.

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    10 plus me then.

    Being a contrarian, and with a double top, and no late day breakout, I'm still comfortable.

    I only have FTSE and Dax puts, and neither of those indices made new highs in the futures.

    How much longer does this POMO stuff last?

    Hard being a bear now, but little is easy in life. Apart from golf, piece of cake that is!

  • mothwhoflysbackwards

    another graceful winner

  • Eva S

    SLV closed at the exact level as in 3/2008. It could go higher still.

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Good call I reckon, it's a sidge of all-time highs. Yeah, it could break out, but a profit is a profit ( I vaguely recall them).

    Well played.

  • Eva S

    Agree 100% with you, Ed.

  • http://evilspeculator.com molecool

    Pointed up for mentioning 'path of least resistance'.

    Brishort: Sorry to hear about your losses – I have been trying to warn everyone about the bullish potential here. It frustrates me to no end that I may have not been more clear.

  • http://evilspeculator.com molecool

    LOL – thanks, I needed that :-)

  • http://evilspeculator.com molecool

    He is not mean spirited in any way – on the contrary – has helped a lot of folks here. But just like yours truly Scott despises opinionated know-it-alls who jump at bashing others whilst never having an original thought themselves. Which sadly is 90% of all retail traders. I could be a lot more popular myself would I spend my time stroking people's egos. Instead I focus on what is and not on what 'should be' or what may be politically correct. There is no politically correct in trading – there are only winners and losers. Scott is consistently on the winning side so I humbly suggest you listen to what he has to offer.

  • Rally_in_red

    All the action in all the markets the last 18 months has had, have and will have only this purpose:

    To pump up Zombiebanks balace-sheets.

    It would not surprice me if markets reaches all time highs before they start to sell.

    No matter how bad news will come out, the dips will be bought, channels expanded, and truth will be bent until they win.

    News doesn't matter just profit.

  • chronographics

    Gary, no use being a contrarian when everyone else is being one too :-) Too many were looking for the downside that is why we are here now. think it was DudePlunger who asked you the other day where you would be wrong n what your rules are – I didn't see a reply, maybe I missed it? They say even a broken clock is right twice a day but if it's digital just once. Its brave calling a top or bottom and putting it out there for all to see but to do so consistently when one is getting it wrong is foolhardy as far as real trading is concerned. But that is just my opinion :-)

  • http://pulse.yahoo.com/_WT77LFNXN7HDLZ6GUPXUJ25P5I Ed

    One other point.. if the manipulators can deflate the BOND Market…a lot of the money (XXX billions) dove into bonds during the past 18 months may find its way back to the stock market. If so, you will see the mother of all rally and we may easily see SPX 1,300 in a year.

    Watch TLT.

  • chronographics

    Eventually (probably) the bears might be right, but unless you exercise caution and prudence in your trading you will have ended up as a pelt on some Bulls wall in their fancy log cabin. No good being right if you are unable to partake in making profits on the way down.
    I might have a Bearish bias at present in the medium term but don't let that affect my trading (maybe thats why I am still trading after 30 years?) too many here can't see the wood for the trees. This is the best Trading Blog on the web but so much of the good advice here seems to be ignored.
    The long term successful traders I see here are the ones trading both sides of the tape when the opportunity occurs

  • convictscott

    Actually just a winner πŸ˜‰ I really did not want to take the long signal that was generated. And my rules told me that I have a valid market edge by going long, so go long I did. I have nothing attached to the outcome, I have losing trades around 30% of the time, it would not surprise me in the least to be wrong several times in a row.

    My story is that I was a consistent LOSER of a retail trader for many years. I had successful business which were able to top up my losses. I made all the usual mistakes (not sticking to stops, position sizing, etc) but at the heart of everything was that I would get opinions about market direction. From the moment I formed those opinions, its started the process of expectation bias where my subconscious would block out evidence contrary to my position.

    The reasons for this are obvious, I was attached to the outcome, attached to being right, and fearful of the feelings that failure in the markets would engender (my brain associates failure in the markets with being unlovable in a parental sense and hence life threatening – ie I was in irrational fear for my life if I failed in the market) The brain has a genetic function of being a PROBLEM SOLVING MACHINE. If I lock my keys out of the car, my brain will give me a list of options… where is the spare key, can I find a coathanger and break in, where is a rock to smash my way in.

    If I am in EMOTIONAL PAIN which I dont acknowledge (from a trade) my brain will help to solve that problem by
    – hijhacking my reality and making me think that even though the market was up dramatically on strong breadth it is actually good because the top is just that much closer now (Gary UK from today)
    – sending me to mental obsession to distract myself, mostly by redoing my analysis again and again.
    – making me think that the most logical thing to do is to give my trade “one more day”

    After 6 times in a row over 5 years of busting out an account (and by busting out I mean margin call game over) I finally stepped back. Did the psychological work necessary to change myself into someone who could be consistently successful in markets.

    My life experience was that my toughness (I was involved in “dodgy” business for many years, spent several long stretches in jail for v. bad things, and had a long history as a fighter of some renown) my resilience, and unwillingness to quit were very useful life qualities. Unfortunately, every single one of the personality qualities that made up my core identity were total dealbreakers for success in the markets.

    I had to change.

    95% of traders lose, and the difference between winners and losers is NOT the stocks they buy, its HOW THEY THINK.

    If you read the comments section of evilspeculator for a while you will notice that I NEVER MAKE PREDICTIONS ABOUT WHAT THE MARKET WILL DO TOMORROW. It is my observation that those people who consistently make calls about market direction have emotional attachment to those calls, and become blind to what Mark Douglas called “the flow of market information in the now moment”

    SO, as a winner, and consistent one, I try and do it differently. I dont make predictions about market direction, I make OBSERVATIONS about what the market is doing now. As those observations change the odds of future outcomes from time to time there are opportunities where we have a genuine market edge, in terms of probabilities and certainties.

    Yesterday, the fact that the market opened below its previous close indicated that there was a *possibility* that there was a temporary exhaustion of selling pressure, which pushed the open down in a gap. This by itself does NOT mean that the market will go up, but what it does mean is that if a little strength is exhibited after selling pressure has exhausted means that weak hand bears will be forced to cover, driving the market higher in a positive feedback loop where bears are forced to cover, attracting fresh bulls, causing more shorts to cover, attracting fresh bulls… The signal was a GAP OPEN BUY, triggered on break of es z0 1134.75 with a stop at 1117. This does NOT mean that the market has to go up at this point, just that there is a statistical probability that it will. Betting odds.

    What we had today was NOT pomo manipulation (except to the extent that the market has come to expect it, and bulls are a little more emboldened on pomo days). It was a simple observation

    FAILURE OF BEARS TO CLOSE THE DEAL again made the bears vulnerable to another short squeeze, which is what happened.

    The current state of the market is that unless the market stops and reverses right now (which given strengthening internals into the close is unlikely, but possible) the odds OVERWHELMINGLY FAVOUR A TEST OF SPX 1170. Whether that test passes or fails, I have no idea, nor do I particularly care. Its entirely possible that the whole P3 scenario will start playing out from 1170 or higher…

    I just dont care, since experience tells me that long or short, I will be on the winning side the majority of the time.

  • Fearless

    I went short on September 21, but I had some hedges against this kind of pop. I am glad I wasn't short the US market, though (I am short the Canadian TSX). The US will probably join the parade when markets around the world go into 2nd leg down, like what happened back in April. I recall reading a post on another trading blog on the theory that the US market goes into wave 3s directly due to the Bernanke pump that occur at wave 2 to make wave 2 looking like a bull wave.

    The PPT isn't the reason I am not short the US. I short the Canadian because I understand this market more.

  • Brishort

    Ed, I am absolutely councious of my bias. I have never traded anything else in my life but equities, options and indexes. So thrust me, I am trying to get out of that bias as you probably achieved in 2003.

    In my own way, without buying to dips, I came to peace with the situation by changing my focus and finding a self work-around to myself. Mole was inspirational that I finally decided to get into system coding with ninja. Something I had been lightly addressing under metastock but dropped years ago due to young kids, day job, etc. Now however, the stars are more aligned and I am ultra excited by what I see.

    Because what I see is that my TA knowledge is as good as ever, just my discipline is off. System trading and coding those years of experience is now coming much easier than I thought. Doesn't mean a billionaire result, but a very satisfying process.

    Furthermore, the technology has moved tremendously to make this much easier. So instead of blindly following C2 systems that sometime look very simplistic, I am going with the most proven approach, i.e. having thrust in me and coding my own system to my own values and risk tolerance, asset allocation, etc.

    In that process I can now peacefully divorce from the “no long position” discomfort I have if I do it myself. I don't mind coding objective parameters and following the risk allocation of going long it my system is aligned with my TA values, numerous parameters etc. I can code it and follow it, but for some reason, if a machine doesn't help me, I literally cannot sleep if I go long any equity by choice, it clashes somewhere I just can't explain why.

    But an equivalent situation of going long or short currency pairs is causing me no problem and I have no emotional disease preventing me from going long or short.

    Therefore this is what I am at. But thank you for expressing your thoughts, it forces me to introspect further more, and I finally think I can look myself in the mirror and believe I have a fair chance at profiting from all that TA knowledge accumulated… knowledge, money management & emotional control have never been an issue. By my incapability to go long when I place the order is still unexplainable. I think I now have found a way to overcome it.

    After investigation, besides Mole, I am pretty convinced I would not give any serious money to what I see on the C2, zulu etc. My conclusion is that I can hardly bear black box if I don't know at least who is behind and their TA analyst qualities. Mole has proven to me he is a capable analyst with a serious track record in TA. Whether the systems are successful or not (HS & maybe even Geronimo but I need to solve the cost friction on scalping) I am ready to try them.

    In preparing for this I discovered I was ready to code as well in Ninja… and that it was somewaht much less painful that I thought. I guess my time has come. Maybe one day I will be posting on C2 as well, not to make money from people, but to share my work and consider any subscription as a tribute of recognition of the quality I bring to people following me.

    Therefore I have a plan to address the long known weaknesses I realized I had, was able to control but could not overcome.

    Final word: I would trade the dips in this market, but blindly buying the dips, never. Because it is not about the market being a frustrating bitch only going up, it is about the action on the tape and I will trade the tape and my indicators if they are bullish when a dip occurs, but I will not yield to any conspiracy theory that the market cannot go down and that therefore I must buy it.

    If there is one thing I know, this market cannot be thrusted and bulls may have had the football longer than the bears, but when they loose it, they cannot adapt. Bears can adapt to being bull and know how to profit from a bearish market.

    Bulls in my opinion don't know how to adapt to a down market and are very bias one sided. The only thing going for them is that in their ignorance of how to handle the down side, they have been lucky because the market has been favorable to them for the last 20 years.

    But when another 1930 comes, they will be screwed just as bears have been for many months now. But bears didn't have the lollipop all thei life given by the nanny, they had to learn to survive in adverse circumstances. Bulls have always had the lollipop given to them.

    You can give a fish to a man and he will be fed. but if you teach him how to fish, he will be able to eat for a lifetime.

    Bulls don't know how to fish.

  • OldChicago

    Mole – not sure how to read the daily ZL. I thought there is a divergence from August hi. (top chart, & bottom chart). What's your take?

  • chronographics

    Said this to yo before CS yo are one of the few that has sorted out the hardest part of trading – oneself… I still struggles with this sometimes myself (always when I think I am too smart and think I know where the market is going) but always try to stick to my plan to keep me out of trouble. Mark Douglas / Robert Krausz/ Alex Elder all do good stuff on that side.
    Keep posting :-)

  • Brishort

    Don't worry. I had losses because I screwed up on my spreads to roll over properly the positions and ended up fucked and naked with high theta burn in expiration week. That is my fault on a technical too leverage situation when unhedging and not liquidating the spread but stupidly attempting to scalp.

    My positions were properly spread and hedged very aggressively (ie long put at the money and short deep in the money) for a long time BECAUSE of your warnings.

    So your warnings worked. It was a risk management of the leverage and position management issue, not a market directional issue.

    See… I do listen to what you say!!!!!! πŸ˜‰

  • chronographics

    Always good to trade the market you understand the best – it gives you an edge. me I mostly – but not always trade FX for that reason.
    No problem being short (or Long) just dont be blind to your view, have rules etc in fact just read ConvictScott's post, really can't put it any better than that. I personally dont feel that one can trade the markets solely based on EWT its just too hard and too many alternate counts to make money consistently. You may have a slight chance if you can count it yourself as you will know your “uncle” points but to do it from other people's counts even if they are very good is financial suicide in my opinion. You could try use their levels but you still need to then have your own plan for entry and exit set ups so you have control of your trade :-)

  • 99er

    This chart hopefully conveys my intended point: that prices appear to have completed a top (or double top) at the approximate 61.8% retracement level.
    http://99ercharts.blogspot.com/2010/09/spx_24.html
    Have a great weekend!

  • gsavli

    And i would be surprised if NQ would not test the prior high (2058, i think). Maybe after a shallow pullback, but it is here, it is a mere 30 points from today's close.

    oh, btw, you have a great talent for fluent, highly readable writing. Plus an interesting life path maybe equals a book one day. πŸ˜‰

  • http://evilspeculator.com molecool

    You are a true and veritable stainless steel rat as you gnawed yourself not only out of a physical but mental prison. Glad to have you here.

  • http://evilspeculator.com molecool

    Not that I know anything – but I keep you guys paranoid enough I hope πŸ˜‰

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Hey everyone.

    Did you know JPM bought 13, IWM shares at the Aug low to save 1040 from being taken out?

    I am trying to find the link to prove this, a guy over at Daveric's site knows someone works on the trading floor, saw it happen.

    Anyway, check any IWM chart with volume for the last hour today, see the spike?

    That was them unloading.

    Methinks the top is in, maybe a slight gap up Monday, altough Europe has shown weakness at the opens for a few days.

    Any bad news out over the weekend, and we could crash on Monday (in a global context it would fit, as China is shut for 5 days, so the US powers-that be, i.e. the Fed/banks would wreak havoc over there, as well as justifying the QE2 they need to be announced in August).

    Am I a mad conspiracy theorist? Maybe, we will see.

    Have a god weekend all.

  • 99er

    Chart: ES
    Love to hear everyone's opinion here but jeez, that's all it is…a fucking opinion. Show us some charts to explain why you hold your view. Here's mine.
    http://99ercharts.blogspot.com/2010/09/es_8416.html
    Have a great one folks!

  • http://evilspeculator.com molecool

    Keep trying – eventually you will be right and then you can tell us 'I told you so' πŸ˜‰

  • 99er

    Said earlier that China was going to throw shit at the fan. Well, Peru and Brazil bought USD today and I suspect that we will soon see Venezuela and later ASEAN countries like Malaysia all join in with China to put an end to this “China is a manipulator” nonsense going on in Washington. Just another fucking opinion.

  • Long_John_Silver

    Right – this is exactly what I was talking about – looked to me like the ZL was indicating a reversal was pending – not the case as it turns out. Btw I don't expect the ZL to be 100% accurate, I just want to learn how to read the thing as best I can – thanks for this and any further elucidation – ljs

  • 99er

    “I told you so.” Okay, I'm early. Let's revisit this Sunday evening; enjoy the beach.

  • Long_John_Silver

    Thanks for walking through this – I was looking at the five minute chart which seemed to indicate a trend of lower peaks, as your arrows indicate. That was what threw me –

    btw – Too true about theta burn over the weekends, I've just never heard anyone say that out loud before – cheers, ljs

  • 99er

    Chart: DX
    As ES completes a double top, USD futures are completing a double bottom. Good luck, Bulls.
    http://99ercharts.blogspot.com/2010/09/usd_3657.html

  • mothwhoflysbackwards

    I agree with almost all you said, especially the opening line ; -)! For myself, I wish I was right 80% of the time. I'm about 50-50, but keep a tight leash on my risk. 50-50 chance with a 2 to 1 (or better!) payoff is a very good bet.

    So when I look at odds of the future out come I relate that more to my risk to reward ratio then to a probability percentage of that stock going up or down. In other words if I was really sure (think its a high probability) It won't really matter if the risk reward ratio ain't there.

    You are right about people seeing what they want to see and that could be caused by emotional pain or not wanting to take a hard loss. The former you can over come in the moment, the latter … well its to late. Many people hold on for to long because they don't want to admit they are wrong (don't know about that parental shit) and sell too soon because a winning trade is good for the ego.

    Best choice I ever made was to sell my FAZ after a 44% one day beat down…. could feel the bile rising (do you know what bile tastes like? it's not good!). Looking back it was an “easy” sell from

    a mental stand point because it was so clear I was wrong that my “I wanna be right ego was gone”.

    Its kinda like that old drop a frog in a pot of boiling water he jumps, turn it up slowly he cooks.

    Yep, people don't want to admit they are “losers” and hold too long, its a problem, but it'

    s made worse by being called a loser. So if you really want to help people don't make it harder to sell by getting their ego invoved.

    It's probably not good for you also. The Romans had a custom, whenever a succesful commander was on his victory parade sombody would whisper in his ear “remember you are mortal”.

    Anyway no hard feelings. I think odds are we go up, the one quibble I have is who are these short covering bears? On FOMC day we popped the top of the range (1130) and yes I can see people going short at that level (or below)

    and covering quick once it was busted. Today those that went short yesterday had to cover. But who the hell is above this level? I don't think many people as they would have sold long ago. The break of 1130 triggered most of it. So short covering will not (IMO) be a prime driver of a move to 1170 (should it come). To get “short cover fuel” at 1170 we would need signs of a reversal and a bit of lingering around that level… that would get more fuel on board. Who are the fools who went short at 1170 and have yet to cover.

    Remember you are mortal.

  • http://rosabarba.livejournal.com Rosabarba

    Double bottom? Not lower low, with current trade below major support?

  • Fearless

    I actually don't use EW for my trading. My method is timing based and I posted a link in yesterday's post pointing back to what I had for the two turning point projections from two months ago. I was long on July 1st and got out on August 13 (again, trading the TSX mostly). I then went for two cautious scalps on September 1st and unloaded on September opex. I didn't foolishly short into September 20 because of what I knew two months ago. What's a bit different this time is that you can clearly see the double/triple negative divergences on most other major indices prior to September 21, except the Bernanke sponsored US. This was another reason I decided to stay safe on the Canadian side. Heck, the jackpot that's coming up in a month is on this side of the border, too.

  • 99er

    Possible but this is a 60-minute chart. Sloth Bear anticipated a move lower so this may prove to be a truncated fifth. Thanks for pointing that out.

  • chronographics

    Gary, this happens all the time, Banks write options, buy options, take positions and then will defend them to make money. Its just trading. The Circle of Life as they say. Why would they not do this? Same in the FX market its been going on for as long as I can remember and I used to do it as well, sometimes it works and sometimes you get your ass handed to you :-)

  • Long_John_Silver

    This is an extraordinary post, which goes beyond trading to embrace a much wider metaphysics & life perspective .. I think you're talking about stepping through the ego here, something that we don't like to talk about in the West, actually a taboo since we worship at the altar of the self, but which is the basis of a good deal of the metaphysics of the East –

    I'll be following everything else you post with the closest interest – thanks for this – ljs