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Beartard Of The Week
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Beartard Of The Week

by The MoleMarch 12, 2019

Yesterday’s short squeeze in equities has advanced the line of scrimmage back to the old cluster of resistance near ES 2790, which now opens us up to three distinct scenarios. Two of these scenarios support a medium to long term bullish scenario while the remaining one is dangling a juicy chunk of red meat in front of bears’ noses. So what is the best play here? It all depends on your trading window.

Over the past two weeks the possibility of an unfolding inverted H&S pattern has been steadily increasing. The green scenario (i.e. directly higher from here) shares a ~40% probability with the orange scenario (i.e. down followed by a massive bounce near ES 2660). Which leaves a mere ~20% probability to the balls out bearish scenario.

Since the bulls have repeatedly faced rejection at this stage I decided to take out a small short position in anticipation of yet another smack down. The main argument for this campaign is that a breach of the spike high at ES 2823.5 shifts the odds strongly back into the hands of the bulls.

But until that happens an expansion in realized volatility is most likely going to bounce us all over the place, offering the bears one last lease on life.

This will be a nimble campaign for me with a target near 2700 or a bit below that if velocity warrants a more profound correction. Given the green scenario’s medium term prospect I would flip for a long position > 2804.25 with possible contracts added > 2823.5.

I would be amiss to not point out the bullish divergence offered by our most excellent Zero indicator yesterday during the formation of the spike low near ES 2726.5. I saw that several of my subs took advantage of that fact which fills me with much pride 🙂

On a practical perspective the point of recognition and a clear signal to abandon short positions was after the indicator settled above its zero mark which was followed by a opening gap on the hourly price panel (top left).

Incidentally another argument for a possible follow up shake out attempt was the increasing profit taking during the final hour of the session yesterday. Let’s see if there is follow up today, if not then bulls pretty much are running the ball at this point.


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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  • Jason13

    I do favour your orange scenario…

  • zzezzezz

    yeah, i’ll take the light-orange followed by dark-orange/red scenario 🙂

  • bankwalker

    Well we’re humping the wall hard right now.

  • Yoda

    I am looking at another possibility not mentioned above: up until the brick wall and then down, followed by an inconclusive whipsaw (distribution) where the volume profile is the highest, i.e. ES 2600-2800. Kinda of like what we saw last Oct-Nov

  • Phillip Reeder

    almost to the letter so far

  • Sp00nman

    I like that Yoda. Talk about some large divergences in the market.. NDX is at the prior high, while RUT isn’t even at the 50% retrace from the down move.

  • HD aka HWB

    “three distinct scenarios” this is the same as 3 wave counts… just saying

  • HD aka HWB
  • Jason13

    Actually maybe a new high this week and then next week down…buyback dryout? https://uploads.disquscdn.com/images/1c6d415b90478c687e2008752c43b2f0050d78f2d4d12150d28e9afe63518d1a.jpg

  • Jason13

    China-Italy deal might really spark the Euro as well.

  • Yoda

    Best thing that could happen to Italy is to show to the neocons the middlefinger

  • BKXtoZERO

    L TVIX 27.86

  • Sp00nman

    What kind of desk do you have now? One simple fix.. http://www.faithandcoffee.com/wp-content/uploads/2013/09/RaisedDesk.jpg

  • BKXtoZERO

    added 1R to real estate short on IYR (via DRV) 1R 7.6 and now +1R today 7.3, that sucker is outside the BB
    https://uploads.disquscdn.com/images/27e4ee6bf610a1feb78fabb032368eb7d4605c44ed5bbb3367c70c4bf9e3e049.jpg

  • HD

    I like it! Less adjustable but less expensive.

  • HD

    Not much of a turn around Tuesday. I’m a seller into 2800

  • Sp00nman

    Yep, a few coworkers have varidesks. Only problem with them is that you don’t elevate your whole desk, so your monitors are now higher than the rest of your “stuff” when working. Just get a bar height chair or whatever it’s called and you can sit periodically as well.

  • HD

    the Wifey would love the block look in the office I’m sure. Lol.

  • http://www.captainboom.com/ captainboom

    Yeah, up 10 from the open. Time for down 17?

  • Sp00nman

    Ya, the WAF is really low for home use. lol At work since companies have tons of those old brown wooden desks, it’s a cheap fix. 😀

  • HD

    Last March SPX rallied until 3/13 2802- and then?

  • http://www.captainboom.com/ captainboom

    Pi Day? 3/14 🙂

  • zzezzezz

    ughhh… have the buying-bots kicked in again?

  • BKXtoZERO

    Check out how many times IYR peaks into a dividend payment. Aaaaaand, we are about due huh?
    (he he he he he) https://uploads.disquscdn.com/images/d73ffcda507bcd35a58493e9426fa16b12767e01d11d8d45ea223950bde67f92.jpg

  • mSquare

    Bond yields lower with ^TNX touching 2.60 and TLT over $122 resistance, so watch out for turns if these levels broken
    https://finviz.com/quote.ashx?t=tlt

  • kim

    On long term to me this definetly looks like at least 80% bust over 2800 and full test of ATH
    https://uploads.disquscdn.com/images/2fa42eefd0521bec53e02547b97c4c113edce92eddffeb2bc28b46168c2f6c33.png

  • BKXtoZERO

    My “imaginary” TVIX short at 36.2 would be looking pretty good here at 28. I took my imaginary 2$ on Friday but it is not hard to see how the big boys make their money shorting this. For today I “imagine ” heading to the Indian buffet

  • bankwalker

    I’m surprised your not buying it right here, right now.

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

    no worries mate. You can live on air.
    😉

    https://i.ytimg.com/vi/aHHRthGVsx0/hqdefault.jpg

  • Mark Shinnick

    Yes…my own entry appears very close.

  • BKXtoZERO

    I did. Read below. 27.9

  • bankwalker

    can’t see it … disqus is sucking hind teat today …

  • BKXtoZERO

    Also in DRV

  • BKXtoZERO

    There is a button for paper trading on TDA. I never tried it. Maybe I will buy an imaginary boatload of TVIX

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

    That’s a leap off the deep end of virtual reality….stick with the hardcore fear-based stuff.

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

    Bollinger’s cat, you’re gonna jinx it. If you watch, IT WON’T HAPPEN.
    😉

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

    what Mark said. paper dolls and barbies won’t cut it.
    Training with Fear/Greed is where it’s at.

  • Julie 35 – 25 – 36

    Julie waiting for a reversal on the daily chart to short this mama
    JULIE

  • HD

    Finally- as promised…
    Turn around Tuesday

  • Julie 35 – 25 – 36

    Hi HD Wacky Wednesday tomorrow
    JULIE

  • HD

    Whipsaw Wednesday per the OPEX week rules.

  • Julie 35 – 25 – 36

    HD 10 min 55 ema matches today’s upper gap window. Let’s see what happens there
    JULIE

  • Julie 35 – 25 – 36

    Approx 2787
    JULIE

  • HD

    Last year, 3/12 closed 2783, 365 days later 2783, yesterday’s close.

    So who’s beating the market? 🙂

  • Julie 35 – 25 – 36

    Nice Stat HD Yup a bounce near the upper gap window and 10 min 55 ema
    JULIE

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • Julie 35 – 25 – 36

    GG What’s nest an inverted head & shoulder pattern ?
    JULIE

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

    P5.

    just kidding.

  • Julie 35 – 25 – 36

    GG I sprained my ankle tobogganing on Sunday. A nightmare ! Doctor says crutches for two weeks. Thankfully not broken
    JULIE

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

    as for what’s next. something along the pitchfork, center tang. +/- 50 pts.

    https://uploads.disquscdn.com/images/a54ca4acf0652fad8cf607f35ff07432ac4b1b3284271c3c4f231afb6ab98923.png

  • Julie 35 – 25 – 36

    LOL!
    JULIE

  • zzezzezz

    Not so fast…

  • HD

    I think 2750 trades, soon.

  • zzezzezz

    Hopefully they can keep it below 2800… That’s all I’m hoping for today ..

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

    alright.
    who Vwap’d?

  • bankwalker

    maybe gap down tomorrow with a little island reversal?

  • HD

    A key reversal kicked off the wave down last week. Very technical market. Would like to see an island too.

  • bankwalker

    and I would like to see a list of your OPEX week rules … LOL …

  • Yoda

    Saved yourself 450 $

  • Darkthirty

    Divorcing yourself from the greed / loss conflict is ALL there is……. ego is evil. Zen is better training.

  • Rightside

    Get cold spray from pharmacy, if it “unlocks” enough of the pain , start slow movement to get blood flow, not to extremes of movement. This can speed recovery. Pretty common treatment in sports.
    I’ve had repeated injury on both ankles and played on them after a week, taped up of course

  • sutluc

    SVXY doesn’t work for you?

  • evilasevildoes

    gold in dx terms

  • BKXtoZERO

    No… it is only 1/2X, doesn’t do much. TVIX is 2X

  • BobbyLow

    I had a back problem and bought a lower cost version of a veridesk on Amazon a few months ago. It has a place for a keyboard that rises with the monitor. The only problem was that I didn’t like it and just couldn’t get used to it. I have since gone back to my regular sitting position and try to get up and walk around more while I’m trading.

    Another thing is that as much as I like to watch price action, my only crucial times are at the closes of my candles. So inbetween candle closes I can walk around and do other things. However, if you are trading super fast candles like 1 Minute etc., that would be difficult to do.

  • Ronebadger

    How about UVXY?

  • sutluc

    Run more exposure.If you had bought EOD Friday you would have made decent coin. There was actually some reasons to go short vol then.

    No it’s not as easy as shorting something that moves from the top left to bottom right as a matter of course, but then if you can’t short the sure thing…

  • BKXtoZERO

    1.5X, getting better… still a tough day trade to get anything but better. You really need to swing trade that and be right. TVIX is 2X and it used to be 3X. Of course they offer you a longer rope to hang yourself with those kind wall street souls. I like TVIX because it moves fast either way, you are out or it works.

  • http://iberianviews.blogspot.com/ catracho
  • https://evilspeculator.com Sir Mole III

    As you know I’m short from yesterday but I just don’t see it – RSI divergence or not. I don’t see any weakness in the price action at the current time –> see next post which will be up soon.

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

    yes – agree that’s what my chart says – rally continues – but watch the breadth..seems to be led by the FAANG and others….at some point in the future there will be a decent correction of this move up.whether it starts a proper bear move or just a pause before new highs – who knows – 😉

  • https://evilspeculator.com Sir Mole III

    NEW POST!

  • https://evilspeculator.com Sir Mole III

    Yeah but ‘at some point’ is not a trading strategy. So instead I choose to just focus on the road ahead of me – one session at a time.

  • https://www.youtube.com/playlist?list=PLEx52bnnbLmh2dnV_Vyq1ErXT79LSU6pT xenoson

    He wants to do day trades because it’s dangerous to be trapped in those ETN vehicles after the close. Remember the volatility spike last year happened after cash market close. During the 14 minutes the vix future keeps trading it spiked from 23 to 33.
    https://www.barchart.com/futures/quotes/VIG18

  • sutluc

    Absolutely. I watched it happen, felt bad for the people doing unsystematic trading.
    I was out days before the “volpocalypse”.
    I assumed BKX was open to longer time frames because he was touting how much money he could have made on a multi-day short TVIX trade if only he could borrow it.

    I can’t day trade, no time or inclination. To each their own.