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ZeroFX Dance Mix
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ZeroFX Dance Mix

by The MoleApril 4, 2011

Over the weekend I have given that first week of ZeroFX quite a bit of thought. Obviously I am still fiddling with the settings as well as the final chart periods and that’s probably going to continue for a few more weeks. But as I was watching it myself I realized that screen grabs really only tell half the story. I intentionally update this indicator on each single tick and that produces configurations which simply disappear when loading historical data and looking at the chart after the fact. I even see slight changes after a chart reload and some of valuable divergences/readings are lost when pulling only historical data.

So as a possible response here is a little experiment I put together since last night. Please take a look at this and let me know whether or not you believe snazzy video wrap ups like this may be helpful to understanding how ZeroFX flows and how particular setups develop. For instance we may see a big spike that does not make it in the final time period (i.e. ZeroFX reading at a particular candle’s close) but that may hold valuable clues to an impending move. There may also be divergent readings that were more apparent at that particular moment and are not as distinct later down the line.

Anyway, this is just an experiment – if you like it then I’ll produce more – maybe I make it part of my daily wrap up posts. Heck, I already wrote all the video scripts – most of the work is done. If nothing else it makes for an interesting background to my various soundtracks. I strongly recommend you watch this clip full screen – otherwise much of the detail won’t be visible.

And no, I am not taking any music requests 😉

Please make sure to also check out Scott’s new post who’s back with a vengeance. He offers a nice perspective of where we stand in equities as well as on the FX side.

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.
  • http://evilspeculator.com molecool

    Jeezzz – where IS everyone?

  • ds2

    NCAA watching. Ok it's over now… This video is cool. I need to watch it a few times to see what it is really telling me. It could be much better if you would draw some divergence lines on it and maybe a bit of narration to tell us what you see playing out. Not that you have to give it all away all the time, but for a great tutorial that would be awesome and if you felt an inclination to do a daily wrap up type video, you might find LOTS more subs as people would really start to get it. Just my 2 cents.

  • Hungry_Joe

    Boredom or something, have been off the trading grid for a while. Sports circus was on here in India and that is distracting sometimes. Have been watching the zerofx though. Bear bus looks to be empty. Even the driver too seems to have taken off.

    Mole, would it possible for you to share something on the broad concept behind the zero. Just asking.

  • http://evilspeculator.com molecool

    Don't really want to put up a tutorial except for the one in place right now. Too early…

  • Planspieler

    I watched it once (maybe its because of that) and see no real edge in the Zero. But I like your FX calls that you outline graphically from time to time! my 0.02….

  • convictscott

    The dx, jpy, and es setups I posted have all been filled. If the market is going to reverse, it will probably try tonight

  • spicestory

    thank you for an update, remember you and others sharing the thought of not to put too much a weight on the /ES after hours

  • http://practicalt.blogspot.com/ Gold_Gerb
  • ronebadger

    When you say tonight, you mean our morning (Apr. 5) New York time, right? Aren't you in Australia? So, your tonight is our next morning? The market is confusing enough…

  • BobbyLow

    I wonder how this is going to affect those trading the NQ or QQQ.

    This is called a “Special Rebalancing” and could account for AAPL drifting down over the past few days. Of course the Boyz knew that this was going to happen in advance. Now after they've been able to do what they wanted to do, we get to know. Isn't that special?

    http://blogs.barrons.com/techt

    I don't remember seeing anything about this special rebalancing although there has been a lot of bitching about AAPL having too much weight. Of course it could never be adjusted a little at a time while it was going up because this way it probably wouldn't have fucked as many people.

  • captainboom

    This is how the boyz suck out the call premiums from the retail investor. I have a chunk of change I'm ready to deploy in AAPL when the time is right. Glad I've been sitting on my hands.

  • bshah

    gm folks… so absolutely nothing will make the ben train stop…
    I think Obama will be re-elected because he will get billions in campaign money from whom he helped to make trillions… Now we can see the separation line between two classes in Corporate america… only rich & poor… who can benefit from the system.. Middle class gets buried..

  • BobbyLow

    I had a nice QQQ Swing Combo Trade working that has now turned to shit. I just closed the biggest part of it and will take the rest off before the close.

    This is one screwing that I couldn't have prepared for.

  • DarthTrader

    His powers are being dismantled by his fellows on the Federal Reserve board and Jean Claude Trichet.

    Philadelphia Fed President Charles Plosser warned that “monetary policy will have to reverse course in the not-too-distant future and begin to remove the massive amount of accommodation it has supplied to the economy.” He added that “failure to do so in a timely manner could have serious consequences for inflation and economic stability.”

    Dallas Fed President Richard Fisher went even further, telling a European audience that “We’ve done enough” and “we’re at risk of doing too much.” Fisher even went so far as to say the Fed’s dual mandate of controlling inflation and boosting employment should be changed. He wants the Fed to have NO responsibility for employment, and to focus solely on inflation.

    Trichet has indicated that he will raise Euro rates 1 point this Thursday

    Change in the air

    Check back in May . . . see how he is doing

  • Clint

    I'm pretty sure you're right..unfortunately.

  • DarthTrader

    Green AAPL up to 341.41 from low of 336 on the way to the 350's this week I believe

    Next week down

  • skynard

    Mega neg divergence on the charts, see if it plays out.

  • amokta

    Im baaaack! – does anyone care, i suspect not 🙂

    Disqus playing up on i.e

    Silver had a good day, closed some july 35 calls.

  • volar

    Rut making all-time highs…

  • volar

    GOLD making new highs…

  • amokta

    Nice of gold to catch up!

    p.s. if a company gets nationalilsed (e.g. a bank), or if shares get 'suspended' from trading (e.g. fallowing a huge fall), then are OPTIONS on the stock still 'valid' and increase in value (e.g. puts if shares fall, then shares suspended)

  • BobbyLow

    Yep with some short term yields on safe investments reaching almost negative levels, small caps are the place to be to enjoy Ben's Wealth Effect.

    VIX at fresh low today. Risk is good for everyone. Oh, and a an 84 year old friend of mine who previously had his money in CD's, told my wife that they did real well in the stock market last week.

    Wow, is about all I can say.

  • http://evilspeculator.com molecool

    We do care amokta 🙂

  • amokta

    Good to know 🙂

  • AudioTactics

    I'm not so sure…

    As inflation starts to impact the voting base you will see Obama starting to apply pressure on Bernanke to move to a more neutral stance.

  • AudioTactics

    Any reason for the EUR/USD spike that began around 10am this morning?

  • volar

    yup.. look at this… if RUT is making news highs… this nonsense can continue into lala land

    http://content.screencast.com/

  • volar

    U have the RIGHT to sell the share at that price, and the seller is obligated to buy…. even if it is worthless

  • amokta

    Hi Bobby
    Was just musing over http://quote.morningstar.com/O
    All these options have a high volatility – is that a problem, if buying puts july, oct?

  • http://thefxspeculator.blogspot.com Onorio

    USDJPY testing friday highs, watch for a short squeeze if we breach 84.80

  • skynard

    Divergence looks to have completed;-) Boy if DX does not hold that 75 level one thing is for sure, Go Long!

  • http://evilspeculator.com molecool

    EUR gained against bucky 😉

  • skynard

    Fed t-60sec

  • amokta

    Time to go short silver at least for 24 hours

  • BobbyLow

    High Volatility Premium is a relative term. Options on stocks that often have large swings in price or when expected special events like earnings are scheduled tend to have a higher volatility premium than options on stocks that normally trade within a small range and have no known event scheduled on the horizon. This rule should apply whether we are in a Generally Low VIX environment as we are in now or like we were only a short while ago when the VIX was a lot higher around 30. The difference is in Scale. The volatility premiums are magnified during higher VIX. So you have volatility being affected by the individual stock, the risk of its sector and the overall market risk.

    As far as IRE, goes, do you expect it to go bankrupt? It's already at $2.40 per share. Otherwise, if you are thinking about OTM, make sure you understand the far right column where it points out the odds of breaking even. This could be a pretty low probability trade. I'm not saying that it couldn't work but it does look like a Lottery Ticket. It could pay off big but as its own numbers declare, it does not have a significant chance of working. It might need a little bit too much luck to work and trading on luck hasn't worked for me for a very long time.

    JMNSVHO

  • amokta

    Thanks Bobby
    I was just surprised with volatility figures at 80, and even '300-500'!
    Anna says she doesnt go for anything with volatility more than 30-40%

    Yes, probably lotto play – has bounced up, but looks to fall again perhaps, but may be the 'math' doesnt favour it being a short trade one should take

  • AudioTactics

    So helpful! lol

  • Smiddywesson

    The only thing that abhores a vacuum more than nature is the markets, and everyone's short the dollar and long stocks. A short sqeeze in the dollar would be so sweet right now. Bah hah hah

  • amokta

    My longterm chart suggests its time for dollar to bounce back strongly (but it could go to 75.20 dxy first). Unless its different this time

  • http://thefxspeculator.blogspot.com Onorio

    here we go…

  • BobbyLow

    I wouldn't mind seeing that myself. I have a small net long dollar position Via UUP.

    My SPY and DIA positions are working as they are supposed to even with the VEGA reaming they've received over the past few days.

    But it will take a few days for me to be able to distance myself from the screwing I got thanks to the re-weighting of the Q's. They completely decimated the Q Options. I try to not get mad when a trade goes against me but this was like getting hit from the rear while sitting at a stop sign. There was no sense in trying to save the Q's trade so I have pulled the plug on that one and moved on.

  • http://evilspeculator.com molecool

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