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Bag & Tag Time!

Bag & Tag Time!

by The MoleJuly 18, 2013

This morning the Convict taught you how to trap a bear and I hope you guys paid attention. The basic idea was that the RTV-S in play had decent odds of failing and as soon as yesterday’s highs were breached jumping into a counter setup was an appropriate strategy ahead of your RTV-S buy back being triggered.

Well, ladies and leeches – it’s bag and tag time as crude just busted out of the gate at max velocity. The bears have no idea what just hit them. As ole’ Tyson once said – everyone has a plan until they get punched in the face.

Quite frankly taking partial profits here is permissible as we are far outside the hourly Bollingers. But that doesn’t mean this puppy won’t have legs after an obligatory pull-back. Boo-ya!! Nice one, Scott.

EUR/USD update – if you wonder why it keeps getting smacked down right now look no further than the weekly NLBL at 1.31499. But make no mistake – this thing has bullish mojo to spare. It’s trading above both its daily SMAs and above both weekly SMAs. Only a pullback below 1.3 would make me consider bearish positions. I think it’s looking pretty dim for my EUR/USD exchange rate over here in Europe. Damn you Bernanke!

Here’s a freebie as I’m in a good mood this evening. AAPL at its 100-day SMA but it’s also kissing its 25-week SMA. Major inflection point for our once so glamorous tech company (thanks for nothing Tim S. M. Cock) and I want to be long above 433. There is some weekly resistance at 449 but let’s get there first and then we’ll see.

But wait – there is more! Please step into my badly furnished lair:


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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 the usual social media waterholes.
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  • molecool

    Yeah, that’s me holding the camera. Don’t ask me why me left arm is so much skinnier than my right.

  • SirDagonet

    yeah, right…. and that’s my girlfriend behind the lens… for a moment, I didn’t see the other letters and thought the “D” was your failed attempt to strategically place a smiley face on her…

  • Darth_Gerb

    ladies and leeches….LOL

  • Darth_Gerb

    I agree with the partial profits.
    T’s do not always end at the HIGH.
    this morning could have been a top, with Monday being a secondary high.
    time will tell

  • DarthTrader

    Cool, I closed out longs and went short as the /TF ABC up completed at 1052 area. You got to trade the signals your methodology gives you. banked some short profits as well so I can wait and see what happens with low stress

  • ridingwaves

    Or it was a NQ bull fake out buy last and msft miss..

  • badflightrisk

    And Detroit files bankruptcy

  • Darth_Gerb

    Daaaam, look at the 4pm Spoos.
    how much profits did the RATS take?
    (Gerb looks over at Ivan)

  • AmazingLarry


  • Rightside_ot_trade

    Mole so gold didn’t make the list with its ID; is the context just not right?

  • SS_JJ
  • AmazingLarry

    I actually made it on the pumped side rather than the dumped side for once:

    Thank you, NLBL and patience. Once a rat, always a rat. ES rules!

  • Darth_Gerb

    as much as I like, *NSFW*

  • molecool

    I already reported on gold twice in the last two days. So I think that setup has been fully explained.

  • amokta

    Detroit bankruptcy. Red swan event or no big deal?
    How come pensions pot is not in a protected pot. Was Jon corzine working as finance director there?

  • molecool

    GOOG missed – down 5% after hours.

  • Rightside_ot_trade

    yep. and we got a new daily sell line to boot

  • springheel_jack

    Nice call on oil this morning Mole πŸ™‚

    Just following up on the discussion this morning at slope. I wasn’t around if David was ever banned but I was banned here twice, once by you and once by a moderator. You don’t remember because it was a REALLY long time ago and we were just joshing you. No criticism intended and no hard feelings at all mate. I always liked your chartwork and I’m glad you’re doing some posts at slope again.

    Sometime in the next year or so we’ll have a chance to all have fun on the bear side again for more than a few days. πŸ™‚

  • Schwerepunkt

    No surprise. They should’ve gone belly-up years ago.

  • convictscott

    Jack – the recent post you did on slope with some long term potential turning points made a lot of sense to me

  • Darth_Gerb

    I remember. πŸ˜‰
    every blue moon I sneak over and peak at your blog.

  • BobbyLow

    Hey Scott,
    I see you’re up and about. I’ve just taken myself off of a 3 week “self imposed exile” from ES” and thought I would share a reaffirmation of another reaffirmation of yet another fucking reaffirmation of why it is best not to break my own rules.
    Here I was, just going along with a fine proven system that fit my personality and was very happy. I’ll leave out most of the stupid details but basically I was foolish and allowed some “perceived news and other bullshit” to awaken a bias and traded against my own system. Not only did I do that, but I began trading options again which to an addictive personality can become a one way ticket to financial ruin. When I finally asked myself what the hell am I doing? I couldn’t help but think of a term that I believe you coined and that is I am “Trading like a fucktard, fuckstick” or something to that effect.
    Fortunately, I pulled myself out of a major dive before serious damage was done and I’m back on the right path again. I’ve banned all news, government reports, thoughts on anticipated Bernanke reactions and anything market related other than what my chart tells me. I don’t want to know anything but my chart.
    I’ve come to the conclusion that news, knowledge of and or anticipation of any news is my current drug of choice and has been a serious problem for me since I began trading 15 Years ago. I have no choice now and must stay away from this crap one day at a time. This is coming from a guy who for the past 3 or 4 years has proclaimed very loudly right here on this forum that news and the perception of anticipated news is nothing but bullshit. Yet I still allowed it to trap me one more time.
    Damn, I feel like I’m at a meeting if you know what I mean. Anyhow, I survived this latest slip and to make sure I stay on track, I’ve reinstated my contract with what’s left of the Tony Sorprano Crew to beat the fuck out of me if I stray from my rules again. πŸ™‚

  • Darkthirty

    Is esn3 dead at market close tomorrow or at the open?

  • convictscott

    Bobby – great to see you back my friend πŸ™‚ Fuckranaut (N) – astronaut heading to the planet fuckhead πŸ˜‰

    Actually as a long term 12th step fellowship member (7.5 years clean so far) I feel the AA/NA approach of putting down your demons one day at a time has a lot of merit for trading. Every day I sit in front of the screen I affirm that I have only a single day’s reprieve from the way I used to trade which blew up accounts. Every day I remind myself that no matter how much knowledge I have I am still only one drink/one drug/one unplanned trade away from being that same old guy.

    My battle with bias is as old as my history with the markets. I think I have it beat and then it comes at me from another angle.

    RULES RULES RULES are the only way to survive long term, when your own brain is your mortal enemy in this game. I actually proclaim loudly against bias for a specific reason – if I tell everyone else that directional bias is stupid (and it is) but then engage in it myself, it makes me a fraud, which is a no-no for me. Keeps me on the straight and narrow.

    My version of the 12 steps for traders

    1) I am powerless over the markets and my trades have become unmaneageable

    2) I came to believe that following A RULE BASED SYSTEM could restore me to sanity
    3) I made a DECISION to turn my trading results over to that system

    and so on

  • convictscott

    Bobby – take a look at this chart with Mole’s new StretchStat/Volstat indicators on it. Price is defined as bullish when stretchstat is above its bollinger, and bearish when it is below, sideways in the middle. Volstat is also defined as high, normal or low.

    Examine your system to see if there are any points at which it falls apart (there will be)

    This has been a “great leap forward” in system design for Mole and I

  • springheel_jack

    Hey Scott, like the work you’ve been posting mate πŸ™‚

    Yes I’ve been doing quite a bit of work on this trendline theory stuff. There isn’t a really good book on trendlines out there at the moment & I’m thinking I might write one at some point. Quite a bit of the work in the reference textbooks on trendlines is just plain wrong in my view, as they’ve been considering the trendlines as derived from the patterns rather than it being the other way around. The market structures and cycles aspects are very interesting and I’m planning to run all the main US indices as far back as they go to see if what I’ve found on SPX holds true on those as well.

    What’s also interesting is the way that the structures on the 1min chart are essentially the same as on the monthly charts. The chart below is the 1min chart over the last four days. You can see that the bulls had a perfect opportunity to make a new HOD this afternoon when the rising channel was established and then dropped the ball soon after. I’m thinking that the short term high may be in:

    Glad to have you guys doing headers at slope. You’re just as happy making money on the long side as the short which is as it should be. Direction neutral trading is the only way to go really.

  • springheel_jack

    Golden days here back in 2009. A long time ago but good times πŸ™‚

  • amokta

    Good advice – very easy to get into biased thinking

  • springheel_jack

    That’s very good advice.

    We’re just random specks of dust in a tornado to the market. We have to put all bias aside and just let the charts do the talking or we’ll just see what we want to see. .

  • convictscott

    Interesting stuff mate πŸ™‚ Direction neutral stuff is the ONLY way to survive. If you define yourself as a bull then you don’t sell when it is obviously time. If you define yourself as a bear then you die the death of 1000 cuts top picking.

    FWIW I tentatively agree with your hypothesis about a short term top being made today. Certainly market internals support giving the bears a shot right here, and I’m about to do a post to that effect. I have found a dramatic increase in edge by waiting until price confirms any potential setup – I give up a few points but avoid many bad trades. Todays setup is the one attached.

    The problem for the bears at this point is that the bull move has been so strong that it almost certainly has gotten dip buyers feeling frisky. If the bears make a move here, drive price down for a week, then get overwhelmed by dip buyers – then a whole new leg up is the highest probability, with overbought momo completely erased.

    That EP 666 guy on the slope has to be the dumbest trader I’ve ever seen – he makes Amotka in the early days (he’s much better now) look like Soros!

  • convictscott

    The market is a turd – the last thing I want to do is roll it in bullish colored OR bearish colored glitter – I might start to think it’s pretty πŸ˜‰

  • amokta

    Nice πŸ™‚

  • SS_JJ

    LOL! That is quite a compliment you got.

  • springheel_jack

    Yup bulls and bears by conviction are just setting themselves up to be dogmeat at different times. A good trader makes money whatever the direction. I’m not fully sold on the short term high as I was expecting a bit higher, but there were some bearish looking trendlines developed today on TRAN, WLSH and SPX that all support a short term high, though they’re wedge trendlines, so we could have an overthrow of course.

    I think a new leg up is the likely outcome for a retrace. I have two decent looking pattern scenarios and they have highs in the 1725-50 area and 1775-1800 area respectively. No way to know which one will run until we get there and there could be a third option of course that I’ve missed or that there aren’t enough data points to predict yet. I think it will be one of the two though with the lower target more likely of those two.

    I think EP666 is joking about his trading strategy. I hope so anyway. Either way he is a conviction bear, which isn’t a healthy state of mind for a trader.

  • springheel_jack

    It is pretty, like a black widow spider, and needs to be handled with similar care. The market will rip your guts out if your attention wanders but the mathematical structures are beautiful.

  • convictscott

    I posted these charts in a post a week or so ago. I think they are still the most likely options. IMO the odds are around 40% that we get a short term tradeable top (of at least 3 days of bearishness). Given the risk in the setup I posted above, I need about 2:1 return to justify taking a 40% trade. I believe there is enough evidence to justify taking this lower probability, higher return trade – but it is certainly not anything special

  • convictscott

    He is MUCH better now, but Amokta 1.0 was breathtaking

  • convictscott

    Oh JJ – you should still be in your EURUSD Long and your stop should be raised again to 1.3088.5 You could consider reinstating the other 2/3 of your position on a break of the daily high.

  • springheel_jack

    That looks about right I think.

    The short’s nothing special as a trade I agree. The long is most likely a very different story. I’ll be looking for a decent setup to trigger the long.

    I’ll be daytrading both when I’m around though I’m going to be away a lot of the next two weeks with very limited internet access.

  • convictscott

    Well TK is an extremely good chartist, way better than me or Mole. And I bet he still loses money because he is a conviction bear. That is kinda sad.

  • springheel_jack

    I think he does as well as he can being a conviction bear in a bull market. He scales way down in bull runs and picks his equity shorts very carefully to maximize relative returns.

    That still misses the point though that bias is bad. We all know that QE is a crock and state support of markets tends to end badly, but as long as the TA still works the direction is irrelevant. In the long run we’re all dead.

  • convictscott

    Agree – I also think he does as well as he can in the current circumstances

  • convictscott

    In 100% agreement – I’m stalking a long once the bears get all excited for sure

  • SS_JJ

    I got stopped out this morning. Out of the trade right now. Bucky is in the limbo zone on the daily:$USD&p=D&b=5&g=0&id=p16168982351

    I see the same story on the 60 min chart. We have a nice compression of the 100 h BB, so the next trend move should be interesting.
    For the time being I’m in sit and observe mode on that pair.

  • convictscott

    Where was your stop? I thought it was 1.3081?

  • Darth_Gerb

    good times?! Heck, he threatened to shut down the site.
    in fact, I think he did for a half day or so. I chalk it up to LA smog.
    wait, it was good times!

  • SS_JJ

    1.3079. I guess we don’t have the same data. My FX broker (saxobank forextrading) low for 07/18 was 1.30718 πŸ™

  • newbfxtrader

    Big red down on the /nkd. Hmmm anyone in that trade?

  • BobbyLow

    Thanks for your reply Scott.

    We’ve talked about the program before. The 12 Steps have helped keep me clean and sober for 23 Years.

    The 3 Steps for Traders you mentioned are absolutely spot on. In my statement tonight, I used part of Step 4 in making a searching and fearless moral inventory and part of Step 5 admitting the exact nature of our wrongs. Also, you are spot on about feeling like a fraud as in how I felt about “Talking the Talk but not Walking the Talk”.

    I’m going to tape your 3 Steps to my desk to go along with Patience and Discipline.

    Thanks again Scott

  • AmazingLarry

    Fuckin brilliant. I might have to use that one!

  • captainboom

    Perhaps it’s time for a relevant reminder about avoiding the news. Worth reading for those who haven’t seen it.

    Avoid News, by Rolf Dobelli

  • convictscott

    My bad i misread the print

  • convictscott

    Hey I didn’t know you were in the fellowship. It saved my life, quite literally.

    Alexander Elder is also one of us, and he writes about the 12 steps for trading in his books.

  • convictscott

    23 years is a super hero effort mate, well done πŸ™‚

  • springheel_jack

    Well obviously the market sucked much of the time, but there was a great group here then and a lot of witty banter. I remember Mole shutting down for a day or so though, and the trading was frustrating as ES was very influenced by Prechter then and had a strong bear bias.

  • springheel_jack

    You’re right, that’s really good. I’ve added it to my blog header πŸ™‚

    Feel free to use it mate.

  • Bun Dance Kid

    Thanks for the GBP/USD setup Mole. Long on ID break – held on through some whipsaw action. Now just nosed above preceding day’s high.

    Do you have a suggestion for where and when to move stop, currently below low of ID?

  • Bun Dance Kid

    Question about NinjaTrader 7 and Kinetick

    Am I right in thinking I can download and set these up to provide end of day data and it won’t cost me anything? Then if I want live data it will cost $50pm?

    Or do I need to have a CME trading account as well? Both NJ and Kinetick assume a level of knowledge I don’t yet have πŸ™‚

  • amokta

    Whats happening, why the market dithers while earnings burn?