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Bear Traps Galore
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Bear Traps Galore

by The MoleMarch 2, 2016

As I pointed out just yesterday: Nobody has a crystal ball in this game, and a ‘good call’ usually is the product of ample preparation combined with a generous helping of luck (that or a source on the inside). That said – we really avoided one big nasty bear trap there yesterday.

2016-03-01_zero

That signal explosion on the Zero stands in stark contrast with the minuscule participation we saw on the way down, which in itself was highly suspicious. Once again the Zero saves the day and if you were caught short after the open hoping for a reversal then you are a certainly not a Zero sub. Which by the way is a character flaw that is easily remedied.

2016-03-02_spoos

I just put up a very small long position with a stop near 1966. The bulls need to kick this thing a little higher now or risk a reversal before the week is over.

2016-03-02_crude

Crude is currently threatening a daily NLBL and may just get out of the gate here. Thus, having missed an entry two days ago by just a few ticks, I’m taking advantage of another touch of the diagonal to grab some long exposure. My stop has been placed below 33.34 – and now it’s in the hands of Mrs. Market 


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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  • CandleStickEmUpper

    Mole, the Zero produced many blue down pointing arrows as the market headed higher during yesterday’s session. Can you please educate us on when to ignore those signals and when to act upon them?

  • MK Ultra

    The bear isn’t finished yet………………

  • ridingwaves

    Mrs. Market makes sense to me for some odd reason…

  • Kato33

    Although new to the Zero my rule of thumb is that the reversal signals are good for non-trending days and much less effective on strong trending days. Again the hint came with the strong early participation on the Zero

  • ridingwaves

    yep, this next down move will be fast and mean….

    just picked up 1R of VIX L, will add some more on push higher as the bulls are now just eating dessert after their bear feast….

  • ridingwaves

    bulls sometimes forget it’s bear season….I made first bet on their memory lapse

    http://s8.postimg.org/j4um6uefp/bullish_you_say.png

  • BKXtoZERO

    CL still looks more bearish to me here but on the edge

  • http://greenlander1.blogspot.com/ Greenlander

    I’m flatterooskee here. 1 hr maxed out and up against trendline so out of longs for now. Thought we might have had a chance to touch 200 yesterday but I got my exit signal and took small short which I am tentatively guessing will be 1-2 days

  • http://greenlander1.blogspot.com/ Greenlander

    30 min

  • https://evilspeculator.com Sir Mole III

    Correct.

  • Time Bandit

    There was over a 10 Million Bl Build in supply this week. Even though this report is bullshit, this is a giant number. If supply meant anything right now, Crude should be down a few dollars at this moment instead of 58 Cents. It could still tank but this is why I wait for the close to judge. So unless you want a quick scalp, I think you might be peeing in the wind trying to short crude right now.

  • http://greenlander1.blogspot.com/ Greenlander

    What’s that COPP indicator? Never seen that. Do you like working w it?

  • https://evilspeculator.com Sir Mole III

    Well my stop nailed that low perfectly…

    http://media3.giphy.com/media/aNxye5v608TwA/giphy.gif

  • https://evilspeculator.com Sir Mole III
  • ridingwaves

    I like it and I do change it on short and long term charts…. a momo indicator….Zero much better as CC is like drip coffee and Zero is Nespresso

  • OzarkHillBilly

    Hey at least we know where the bulls are drawing a line today.

  • ridingwaves

    textbook example of what you just mentioned just happened

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

    back in 2013, I was big into straight lines, lines in the sand, battle lines.
    Scott in his usual manner, mocked. as first, hurt ensued. but over time – deep thought.
    Lines are helpful, but disappointment will occur if they are your crutch.

    Here is an example of yesterday. not one line, but TWO Major lines, crossed. THE NERVE!!

    so,
    First place winner is a Cadillac Eldorado,
    Second place – a set of steak knives
    Third place – a nice pair of bear book ends.

    ps. Activity at work is increasing exponentially, most likely I will be going into hibernation next several days.

    -GG

  • BKXtoZERO

    ooops! what a change of fortunes (again)

  • http://greenlander1.blogspot.com/ Greenlander

    stopped out of short. prob will stay on sidelines until close

  • ZigZag

    That was yesterday’s pullback low to the tick.

  • Mark Shinnick

    Yeah, ultimately…only lines….but symbols of agreement. To me they are like borders into different assumptions.

  • Kato33

    I’ve been in and out of the PMs over the last couple of months and am currently back long both GC and SI from 1233 and 14.80 respectively (1/2R each). GC has been painting higher lows and lower highs, i.e., triangle over the last several weeks.

    I longed SI first after its downside move below the 25h yesterday led to nothing more than sideways action. Not the most disciplined entry but worth 1/2R in my book. My GC entry came on the break above the 100h and supported by SIs strength. Completely possible that the triangle breaks down out of this thus 1/2R campaign.

  • tradingmom

    Yes! At least that’s how I use them. If price respects a line, that tells you one thing, if it doesn’t, then the message is different.

  • strider

    high tested and failed.

  • http://greenlander1.blogspot.com/ Greenlander

    I see. I have enough momos but I’ll take a look and mess around w it.

  • Ronebadger

    Started a short position this AM…being careful

  • ridingwaves

    1996 would really be sweet entry spot…holding ammo for there but I don’t know if it can make it, Crude will tell the story

  • ridingwaves

    that little cluster on the lower yellow block near 1996 would seem to be great shorting area and maybe could be why a move happens before

  • https://evilspeculator.com Sir Mole III

    You’re welcome 😉

  • Objectively_Bias

    CL jumping higher like that after the inventory report is just nuts… Correct me if I’m wrong but how can storage reaching some of the highest levels on record be anything but Bearish?

  • http://greenlander1.blogspot.com/ Greenlander

    Yah maybe even a slight overshoot wouldn’t be bad to rope in more longs.

  • newbfxtrader

    Uh you are Wrong. What does supply and demand or profits have to do with price? Its ok to know the fundamentals but try trade the charts.

  • strider

    That helped

  • Objectively_Bias

    This is all I heard while reading that reply.

    https://www.youtube.com/watch?v=mxuwXczWQC0

  • newbfxtrader

    I have wasted tens of thousands of dollars trying to trade “fundamentals”. If you can do it, fine.

  • Time Bandit

    I wonder if anyone here noticed a sell off in crude after 4 PM yesterday. I’m willing to bet that this was in reaction to another report that is released to the big players late Tuesday afternoon? There was a big spurt of volume for about 15 Minutes as well. Even without any official reports, I believe big players already know what the real supply is long before any reports are written.

    My reading EIA reports is like reading the funny papers – nothing too serious about it one way or another. I’ve been trading crude for a few years and have seen 7 or 8 weeks in a row of a draw down in supply while price decreased every week. The same goes for so-called builds in supply with while prices were increasing. So I learned a long time ago not to make any decision regarding crude based on any reports.

    I’m also convinced that price is what ever the big players want it to be so I just try to go along with “flow”.

  • Time Bandit

    Same goes for Anal-lyst Reports.

  • Objectively_Bias

    I saw that as well. I personally don’t trade crude but find the current situation very interesting. Thanks for the reply.

  • mugabe

    It all depends whether the lines are part of a real edge. They may be, they may not be. Peter Brandt’s use of them seems to be. But I’m also reminded of a recent Steenbarger piece:
    There are two sources of edge when trading financial markets: 1) looking at new information;and 2) looking at old information in new ways. The traditional sources of
    information are so mined that there is no edge in looking at old things in
    traditional ways.

  • ridingwaves

    OB, the supply builds are one thing but when JPM and Wells announce setting aside over 1.5 billion for oil related losses I take notice and is why I went long, Pigmen bankers are great at throwing breaking balls, easy to swing and miss, sometimes they leave a hanger and you can hit it out of the park. Thinking evil here, if oil can crawl back into the 40’s, what they set aside can be deployed elsewhere, creating a 3 card kind of monte game, that 1.5B off the red side of p&l creates all kinds of arbitrage moves for them and their books

  • Time Bandit

    That’s interesting because it is thinking evil and it also falls in line with the old saying “Follow the Money”.

  • ridingwaves

    leverage that 1.5B by 10-15x (pretty normal in these times) and were talking some big change…at the same time it definitely hurts my thinking of the next turn to 1840 area

  • Billabong

    It was a AH report on Cushing…

  • BKXtoZERO

    Mark, nice line of business you are in, Helping people.

  • Mark Shinnick

    The gas will be if the thing actually saves some lives…it will all be in the data reported realtime by the machine.

  • https://evilspeculator.com Sir Mole III

    Okay I finally folded and bought an iPhone. I hated every single Android phone I have tried over the past few years.

  • https://evilspeculator.com Sir Mole III

    Zero snapshot for you left over leeches. JOIN THE DARK FORCE ALREADY!!!

  • https://evilspeculator.com Sir Mole III

    In case you are wondering – I bought the 5S as I don’t like large phones.

  • Mark Shinnick

    A lot of people feel the same way. While I just could never get myself to buy-into Apple’s exorbitant pricing…form and style I know sometimes make all the difference.

  • tradingmom

    Note the upward sloping channel on the 5 min signal.

  • BKXtoZERO

    small phone small d… well, you know 😉

  • Ronebadger

    hourly diverging…so far…

  • OzarkHillBilly

    Thanks for sharing. I’m about to have to buy a new phone, and although leaning towards just getting another iPhone, I was wondering about Android. My old 4S is beat to hell and actually got dropped in the toilet this morning (no questions please).

  • Ronebadger

    6 year old flip/dumb phone here

  • OzarkHillBilly

    Bailed out of my last long options. Even though I had some breathing room re: time and strike to hang onto one as a lotto ticket, I decided to get out. Maybe this powers on up and over the hump this week, maybe not. Might pick up a small short option position before the close.

  • Yoda
  • https://evilspeculator.com Sir Mole III

    Patience you must have, my young padawan!

  • ZigZag

    But vix is 17.15!

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

    ..4s owner for three years.
    small is sufficient. I’m no Instagram Ho.

    I recommend a juice pack for those longer road trips or just a helluva busy day.
    http://www.mophie.com/shop/iphone-5

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

    I made a grave error. charting on TVIX.
    chart on VIX, execute from that.

    Line overthrow. If a central banker open mouth and declares infinity & beyond.
    VIX ‘could’ drop to a lower level. yes, sub $15.
    file this under the ‘never say never’ thinking.

    http://stockcharts.com/h-sc/ui?s=%24VIX&p=D&yr=0&mn=9&dy=0&id=p76661782220
    -GG

  • BKXtoZERO

    I think there have been plenty of warnings on here about charting on 2 and 3X etfs on here. Many from Scott. I look at them for tip offs sometimes and chart a little but use VIX for VIX and CL for crude.

  • Yoda

    Aye Master Mole. Just observing some evident signs of distribution today.

  • ridingwaves

    definitely distribution, the bull dessert could be followed by one snifter of cognac to complete the celebration

  • Yoda

    Yeah just waiting for Gartman to say publicly that he is long stocks again. 😉

  • ridingwaves

    the weekly could get to 15.91 for an epic bear mauling…

  • http://greenlander1.blogspot.com/ Greenlander

    Grrr. Left a handle of upside on table today but was just following exit rules. The tape is so squeezy. Took small QQQ short at close.

  • Time Bandit

    I remember Gartman banging the table on Fannie Mae as a buy all the way down to oblivion. So yeah, it might be a good idea to fade him.

  • Yoda

    Best contrarian “pundit” that I have seen so far. I bet you he trades exactly the opposite of what he says out loud.

  • Mark Shinnick

    Not too grave; to resolve into a trade decision/execution based upon a VIX chart first assessment, TVIX shorter term charts are probably indispensable.

  • simonn1080

    He said they made a mistake and closed shorts last night!

  • Time Bandit

    Another decent day today. Still Long Crude, Oil Service Companies and Basic Materials. Have no idea how long these will run but I’m going to ride them as long as I can. Also still Short EUR/USD. So it’s Same O, Same O with the only change being flipping to Long GBP/JPY yesterday.

  • Yoda

    Don’t know if you kind gentlemen/ladies give any credence to the ISE Sentiment Index (ISEE index), but it appears that “investors” went all-in long equities today. ISEE (Equities only) finished the day at 219.

  • Time Bandit

    It’s been a long time since I banned all pundits from any serious consideration. But I remember that somehow, these guys always worded things so they never appeared to be wrong. In other words, they are full of shit. 🙂

  • Yoda

    Seen that. Waiting for him to say he’s long again. 😉

  • Mark Shinnick

    Well..if this is all the setting of a high quality bear market trap…I guess it would have to really look the part 🙂

  • http://greenlander1.blogspot.com/ Greenlander

    When the tape is going sideways like it was earlier in the day and the red/ green squiggly lines are far apart, does that at all indicate accumulation or distribution? My understanding is when price is moving in a certain direction and the squiggly lines are apart it indicates participation but not sure what it means when price isnt really moving

  • http://greenlander1.blogspot.com/ Greenlander

    This looks very interesting. I use CPC ratio very actively via Stockcharts but they have a different methodology. Gonna take a look.

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

    ..it use to be a centerpiece around here, years ago
    ‘equities only’ was important AND close. no intraday crap.
    -GG

  • captainboom

    Yep. The 6 series is way too big for my hands and pockets. Rumor has it there will be a more powerful version of the small form factor in the next month or so, probably because you just got a 5S.

    Re: Gerb’s comment on battery life, it helps a lot if you don’t use Bluetooth to turn it off. I manage to get through fireworks season without a battery pack, but I have chargers in the car/trucks if I need it.

  • captainboom

    I don’t know about highs in the ISE, but I’m aware of a guy that uses the equities only close to help find equity lows. Believe he looks at below 120, there should be a turn +/- 3 days from that low, including the day of. Recently, I believe he modified that to below 100, given the environment.

    Might be worth a look back. I believe you can download the historical data for free.
    Edit: That’s a +3 days only. Not +/-.

  • https://evilspeculator.com Sir Mole III

    Quite some vega crush there in the past few days. We went from 22 to 17 – that’s ~23%.

  • https://evilspeculator.com Sir Mole III

    Oh, yes – yeeeesss – that’s it!!!

    http://cdn.meme.am/instances/52419499.jpg

  • Yoda

    I made the following quick assessment of dates where ISEE equity (close) finished above 200 to check if we can see any relationship with recent trend highs on SPX. A bigger set of data should be used in order to see if any statistical evidence, useful for trading, can be drawn from it.

  • http://greenlander1.blogspot.com/ Greenlander

    CPC ratio fell to the low zone.

  • BKXtoZERO

    Vega

  • Billabong

    The Greeks …

  • Yoda

    nice

  • http://greenlander1.blogspot.com/ Greenlander

    Looks somewhat similar to the ISE stuff. Few bad signals here are there but works better on the extreme spikes. Going to compare the two and see whether one is better than other

  • Yoda
  • BKXtoZERO

    Well, I almost ate tonight. The wife had chicken soup half made, with peas/ carrots not in yet, no salt or spices…. contemplating PBJ sandwich at moment.

  • Darkthirty

    got a convoy flip phone…..drop it 20 foot on cement and still works. Daughter ran over it with a van…..broke the holster.

  • Darkthirty

    Better get your account cranked up and hire a maid.

  • mugabe

    ‘When you manage exclusively for returns you tend to forget about risk, which is really the most important part of the equation,’

    Good post. Not aimed at short term traders, but it’s all connected.

    http://awealthofcommonsense.com/2016/02/managing-risk-vs-managing-returns/

  • https://evilspeculator.com Sir Mole III
  • Billabong

    “Successful investors look to control risk, first and foremost, with the understanding that the returns will come eventually.”

  • https://evilspeculator.com Sir Mole III