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Bull Smacking Friday Rub Down
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Bull Smacking Friday Rub Down

by The MoleOctober 30, 2009

Everyone at the evil lair is wearing party hats today as we banked some major coin. This evil megalomaniac closed the day 40% up – which might be a personal record. Of course much of that ill gotten gain will soon have to be relinquised and I tell you why:

The Zero shows a solid down day again on all fronts. What’s also important to note is the signal strength of today’s drop versus the signal during yesterday’s pop higher. A reasonable point of view would be that the trend has now changed to the downside – but – I don’t want to be hasty here – let’s see how far Monday’s snap back will get us.

Also apparent on the late day portion of the Zero Lite chart are various bullish divergences. We are quite oversold here folks and I got an inkling we’ll be pushing into Minute {2} early next week. I would point towards Monday had the ole’ buck breached 76.58 today – but so far no takers yet to push this thing higher. We shall see…

Program Trading Update:

evil.rat/ES: +18.75
geronimo/ES: -5.5

Evil.rat had a monster day today – geronimo not so much as it got stopped out early in the day. Fortunately we had lowered our stop settings a day earlier.

I leave you rats with a little goodie:

Wer wartet mit Besonnenheit
Der wirt belohnt zur rechten Zeit
Nun das Warten hat ein Ende
Leit euer Ohr einer Legende

He who is prudent and can wait
Will be rewarded when the time is right
Now your wait has come to an end
Lend your ear (attention) to a legend

Enjoy your weekend and Happy Halloween!!! Crank it up! 🙂

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 the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

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  • CorporalCarrot

    Mole, could you tell me what factors will make you go “All-in” here?

    Heres my situation. I have a long term “long” position (don't ask, its stuff I can't sell for a while), which I have been progressively hedging over the past 3 months, retaining some positive delta until recently. When DOW got above 10k I have switched to a small negative delta position.

    But I want to be BIG negative delta when P3 is confirmed.

    For my own part, I have seen a lot of topping signs recently, regardless of EWT, that make me feel recent action is different to the previous pullbacks we have had. But 6 months of manipulation has made me wary, so I don't want to commit totally until I'm sure the action has truly started.

  • molecool

    That's how I play mate – part of me doing EWT instead of pure trend trading. I still do the latter for a portion of my trading but we are in a very unique moment in time and I know what's coming. Just like I knew what was coming last year and just as I knew what was coming last March. Unlike in March, this time I decided to play.

  • defenderyou

    I am glad for all the evil ones that made money. Since I am mainly a long side trader, I am happy that I limited my losses to only 3% this week and las togethert; I got stopped out of all my positions today and lost 1%; then I did some other stupid trades which were ill-timed costing me another percent. So I aint too happy with myself short-term but given how well I have handled this sell-off overall I call it a majot victory for me. So now I am flat and only hold my preferred financials which have held up quite well through all of this. I have an impt question for you – what do you advise for Monday or next week? Do you really expect a move up on Monday?; Given what has happened since we are now out of the uptrend and into bear mode, when should shorts be establshed? Would you wait for a snap-back up before doing so? I feel foolish in that I did only 10% short at yesterday's highs and that was not enough to off-set my longs that I started the day with. I cashed in on those today (FXP China etf). Any advice would be appreciated – I am never comfortable going short (I know that is weird around here) so some good advice on when to initiate is what I need particularly if we are in a bear trend now and all the bears said we would have time to initiate.

  • WTFed

    Have a good weekend mole. Thanks for all the hard work and beats.

  • http://www.blenderking.com Dan Robbins

    This is how I traded today. I was using bull testicles for the fuel….

    Y'all have a good weekend!

    http://www.screencast.com/t/rUsLqpb9K

  • CorporalCarrot

    When you say final re-test, do you still expect 1120 or thereabouts? I see Attila at Xtrends is also predicting 1070 early next week, but something just “feels” different here to me. The fact Dow and S&P have now broken the man-with-a-ruler trendline you referred to in that post a couple of weeks back, the bearish engulfing candlestick we haven't seen since july, the monthly Doji I referred to earlier, plus the weight of fundamentals………..I guess my fear for a lot of bears is that we are close to that “moment of silence” again you referred to it last month. The point at which bears have capitulated and are so fearful of that “one last push” upwards, that they end up missing the thing they have been waiting for for so long.

  • molecool

    Differences of opinion are inherent to trading 😉

    I put my chips on the table – what you do is your business CC – I respect Attila but I'm not going to start trading by taking a democratic vote among all the bloggers out there. Hey, I'm nothing but a sex craved Rammstein fanatic anyway – let my blow myself up so you can say to everyone 'I told hm so!' 😉

  • molecool

    Did you stomp on them first? They like that…

  • molecool

    Trading only the long side is like driving a car and limiting yourself to only left turns. It's going to be tough for you once the market starts making a turn lower 😉

    Unless of course you made your money and decided to 'check out' – I can respect that.

  • CorporalCarrot

    Hey man, don't take me the wrong way. I wasn't trying to compare. I guess I was just musing about things, and I'm finding that many people are now being ultra cautious when we are at the exact point they (with great foresight I might add) told us we would be in now. So as I said, I'm trying to pick the point at which I commit in a major way, and just trying to canvas as much opinion as possible, and I respect people who know all the technical side.

    Anyway, I love reading the site (and contributing inanities) and hopefully we get to print some of those t-shirts soon 😀

  • molecool

    Thanks! Someone cares 🙂

  • WTFed

    Fires are out, air is clear (somewhat) in fabulous los angeles. Time to enjoy a nice weekend!

  • molecool

    Didn't take you the wrong way – that's just how I talk. Fact is that there's no grayscale in the market – you either win our you lose. I know I'm probably going go to lose on Monday/Tuesday but have decided to fade small degree gyrations going forward. My trading is not based on hope – it's based on my own TA.

  • http://ewtrendsandcharts.blogspot.com/ Columbia1

    Howdy Mole, I had a thought yesterday, after looking at the structure of the wave for that rally, that it resembled a 2nd wave, more then a 4th. And in the Dow, wave 4 enterd wave 1. I came up with this idea, what if yesterdays rally was another 1-2, only one degree smaller? The volume today was higher then I expected to see for a 5th, even higher then Wednesday wave 3 volume. What do you think about this option. You are much better at reading the TA then I am. Is there anything in there that might support this option? Thanks 😉
    http://ewtrendsandcharts.blogspot.com/

  • molecool

    It's a possibility and my puts would love it. But in trading we should always embrace the best but prepare for the worst. And if you look at the VIX closing far outside the BB then you should at least consider the notion that a snap back is in the making.

  • raised_by_wolves

    Not that it really matters since you've prepared us all for a push back up to ? 1060, but most rats around here seem to be fans of your light orange scenario. Count me as a dark-orange-jersey-wearing crazy who's already tailgating before Monday market open and preparing for a final drop to <1025.

    http://screencast.com/t/V9ZdzQRzIEu

  • http://ewtrendsandcharts.blogspot.com/ Columbia1

    Yea, I did see that the VIX jumped around 2 deviance's, which normally means a retrace

  • defenderyou

    As I had an MRI today I missed all the action on the downside anyway cause when I got back (1:30) we were already at the lows and just bounced around thereafter, so did not find any setups to do after the bombs.

  • CorporalCarrot

    Well, have a great weekend everyone, I'm off for a beer. Next week should be very interesting.

  • orth

    I want to thank all the steel rats at this site. I've learned a lot, and if I can keep banking coin from days like this, I will start trading options sooner than my 1yr and 7 month time frame that I projected. Presently, I just mostly daytrade short, but do scalp some longs. I was fortunate enough to own VXX today for most of the day,

  • gsavli

    Every week for some time from now on should be interesting 🙂

  • gsavli

    probably we all do. there's a great amount of work and exp behind those charts and texts you post.

  • Woolly Llama

    Your account is up 40% on only 60% of your equity in 1 day?? Wow, I must not be bearish enough.

  • Woolly Llama

    Sign me up for the category of being burned too much to finally buy into the selloff, I was actually leaning quite bullish today based on yesterday's move and was not expecting to see 3 trend days in a row. Needless to say, I feel like a worthless bear and plan to drink heavily this evening.

  • CandleStickEmUpper

    I will welcome a snap back with open arms

  • defenderyou

    WOW – quite a psycho mess isnt it? The market does too often outsmart us; I would like to expect a bounce but given what happened for all the reasons you said “broken the man-with-a-ruler trendline”, etc I am not sure of what to do now either, an may do the opposite just like you suggest. Interesting way you put it – thanks

  • defenderyou

    I agree and that is why I come to a EVIL bear site to learn how you guys do it, you can say. In any case bottom line – since you are one to commit what is your EW/TA models saying to do now? – go short-term long, wait for further confirmation before all-in short, etc. Tajke TK for example he said he was only 40% all in two days ago; when does one go all-in 100%? Are we there – I think that is what CC is asking as well buy the way
    That is kind of what I am asking. I guess you will write your view later on so I can wait for it.

  • defenderyou

    One never makes enough money as I live off of this stuff. If I dont make money I dont eat

  • elliott_surfs

    If you don't mind me asking, which platform / broker are you using? (Getting back into the options trade meself, just curious)

  • http://www.aggressivelyuninformed.com nepharis

    If you want to trade options, go with ThinkOrSwim. Most people around here use it, and there really is nothing better.

  • raised_by_wolves

    I apologize if I influenced you at all to be bullish/too cautious a bear as I was pointing out that $INDU closed yesterday above that rally trend line (it fell below it early this morning).

    Don't beat yourself up too much since, like all of us, you have to maintain a healthy psychology to play this game.

    If you think Mole's orange scenarios are highly probable, just focus on getting an entry as the market approaches {ii}.

    And save some booze for future celebration. The time will come.

  • dollar

    Hah! When I started in this I sat next to a day trader who had a sign on his desk that said, “They never remember when your right, and they always remember when your wrong!”
    You have a great site and great charts and observations, but popularity and appreciation are fleeting.
    Keep doing it for the fun and the money…VROOM!

    http://www.youtube.com/watch?v=r8HnT_BwjaY&feat

  • defenderyou

    Drink well – and thanks man; what you said is good for me to hear- I too was suprised about today – although many warned of it; like TK and others; I just did not believe them so wasn't positioned properly

  • http://gemstowear.etsy.com Jan

    double ditto! :<)

    Have yourselves a wonderful weekend!

  • http://www.facebook.com/screasy v8muscle

    Holy shit…. I just did a little mental masturbation on the possible H&S setup and WOW….

    The chart says:
    -970 before Nov opex
    -1040ish in dec
    -Tank from there
    http://screencast.com/t/V7dBQTxq5

    The RSI trend would fit with that too….. which is really strange because this seems far fetched sort of, maybe not?

  • Niktus

    Hi,

    I was looking for past performance of evil.rat or residente.evil but can only find data for 2007. Is there a source i can check before subscribing? I already subscribe to zero, but see no extra info.
    Many thanks.
    N

  • elliott_surfs

    Thank you Nepharis =)

  • gregn

    Mole, why do you mainly do long term shorts on the indices? I feel that you get a much better return on puts with individual stocks. X for instance was -6.12% whereas SPX was only -2.81%. I plan on loading up on X, CNX, CAT, BAC etc puts when VIX approaches 25ish.

  • raised_by_wolves

    The comments section is as inactive as a cheerleader's brain but a lot quieter than her “stomp stomp clap stomp stomp clap stomp stomp stomp stomp stomp go bears!” chant. Hmm, everyone else must have a life around here and actually do activities on a Friday night besides pouring over the charts. Wait, there's defenderyou, Jan, v8muscle, Niktus, elliott_surfs, and gregn. We just need PRSGuitars or Stainless Steel Hamster to join us! Speaking of Stainless Steel, where's that Stainless Steel Chicken?

  • raised_by_wolves

    That's not inconceivable. What 970 before Nov opex and 1040ish in Dec followed by H&S neckline fail! Hehe. 😉

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    Transports — Bulls fail at Operation Toto — channel line is breached. I would be much more comfortable if bears could extend this wave down to allow room for a retracement without letting bulls back in the channel. If we start dancing back and forth over the line I'm going to get nervous.
    http://tinyurl.com/ygsvqq4

  • marketmaker

    I haven't posted in a while, but have been here everyday, reading and learning.

    ( 3 consecutive profitable trades in a row now. Would have been five but I overslept!)

    Three things:

    a)I wanted to thank Mole for the education.

    b)I wanted to thank all the other posters for their efforts and contribution.

    c)A quick question: Is the market showing signs of “distribution”? And if so, how do we tell?

    I first learned options from someone who uses(among others, of course), the following two indicators:

    $advn-$decn

    $uvol-$dvol

    What exactly do these two show?

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    I'm really tempted to say “at your mom's house” but I'm not going to. 😉

    I'm around but have a bunch of other stuff going on, so I'll continue to be MIA for a bit.

  • http://retracementlevels.zstock7.com/ zstock

    23rd century twitter site—WoW!
    http://media.photobucket.com/image/happy%20hall

  • http://eminitrends.blogspot.com/ T. Waffle

    About time you put some Remmstine

  • http://eminitrends.blogspot.com/ T. Waffle

    Thanks for your post about 61.8% on Tweet Mole I cashed out my Nov puts with more than 100% return.

    Zero is kicking ass for past 3 days (as I was in India I didn't trade for about 25 days)

  • raised_by_wolves

    Well, that was a diplomatic way of still saying it. 🙂 I see that you have some new posts the last few days after a couple weeks of away from your blog. Maybe you were at my mom's house! 😉 I'll check them out.

  • https://www.evilspeculator.com berkshire

    I'm not feeling too hot and have a wedding to attend tomorrow, but I am here and just got done counting my sleepy-day's gains.

    Skål!

  • BigHouse(Aka Mr Vix)

    What do you think of LVS? Only stock that was green.

  • https://www.evilspeculator.com berkshire

    I think that it retraced about the same as it did yesterday, which would make for a gorgeous zig-zag. It filled the gap it made today. Closing up 2.25% when you were up 12% is hardly what I would call “up,” but I do acknowledge that it was green. Other casinos didn't feel the love.

    But what I think most is “damn wish I could have gotten out of bed to add a few more.”

    Skål!

  • BigHouse(Aka Mr Vix)

    You think i should stay with those june 10 puts or sell on Monday and buy them at a better price? wave {ii} in spx could push this back up

  • https://www.evilspeculator.com berkshire

    To be honest, I can't see much more than a 25% retracement in 2 days. That was just absurd. I am keeping both my front month 14s and Jan assortment. I don't know how much you are down on those, but I really think the top in LVS is in. As far as getting in at a better price, you tell me Mr. VIX? What did you do today? $VIX up 24%. Sure, you might be able to enter at a similar stock price, but we both know the options won't be the same. Also, LVS is relatively non-volatile right now with IV in the 90's. I know I have easily seen 170% in front months. Just a thought. I'm sitting tight.

    Skål!

  • BigHouse(Aka Mr Vix)

    i'm in at 1.40 on those options ..so down alittle

  • raised_by_wolves

    Of course, there was that messy bull/bear tug of war back and forth over the channel line about a year ago. That was before I was born, er I mean, that was before I started trading. How did you trade that?

    http://screencast.com/t/l6O2NILsiF

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    I raised, left before close so that I wouldn't get tempted to hit the bullet and sell my shorts at a slight loss, look at BPSPX and see why I think we're still in the middle of 3 of the last 5 down movements (hint) MA13 MA50 MA200, line from january 2008, july 2008, july 2009 lows

  • https://www.evilspeculator.com berkshire

    I think we will both be just fine…

    Skål!

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    both are in the table, you've been hearing me and gann talking about late november low

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    of course we do, even sick to death I'm saying that (even when you're a pain)

    WE CARE

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    very wise, there is a fair probability that we're 3 months away from nominal top….

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    I wasn't obsessed with the Transports back then like I am now, so I wasn't paying attention. Also, I mostly use $TRAN as an indicator for broader market direction. So when I do trade them, it's usually just long/short IYT.

  • marketmaker

    “This has driven the S&P's P/E to one hundred and forty (as of 9/30/2009), a level never before seen in the history of the stock market, and on a historical valuation basis some seven times expected price/earnings value and more than double the previous high of approximately 60 (just before the Tech Bubble collapsed.) Should the stock market correct to a “somewhat reasonable” P/E of 50, the S&P 500 would trade at 375! Should it correct to a “more normal” P/E of 20, it would trade at 150! Of course earnings could (and almost certainly will) improve, but even if they double this implies that “fair value” for the S&P 500 is something close to 300!”
    ________________

    Denninger, The Market Ticker

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    for those who give a damn

    spx over gold broke 1.0

    spx over gold did a lower low (this didn't happen in july)

    at least .95 should be in the cards now

    p.s. go and check yourselves
    p.p.s. real spx started correcting LONG before nominal spx, we could have up to 3+ months

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    yes, and fair values of homes should be a fraction, and most salaries need to be trimmed by a magnitude…

    and then how can banks LEND?

    no assets, no income…

    BTW do you know what a NINJA is for banks?

    No Income, No Job, No Assets

  • The_Grim_Reaper

    Short Sellers Beware

    I will continue to make bullish posts until one day bears wake up and wonder “what just happened”?

    For now, I leave you with this tidbit. Check out the McLellan Oscillator on a long-term chart. You know the last time it hit the current levels? late February, 2009. And we all know what happened next…

    Sellers beware, that's all I'm saying.

  • http://oahutrading.blogspot.com/ steveo77

    Doesn't seem far fetched at all.
    S&P target of 150 to 400 within 12 months.
    Last year the indices were often moving 5% to 10% on a daily basis.

    Check out the link on the bottom of my link.

    http://oahutrading.blogspot.com/2009/10/recent-

  • http://www.facebook.com/screasy v8muscle

    who gives a shit about the McClellan. We broke trendlines

    Price action >>>>>>>> indicators

  • http://www.facebook.com/screasy v8muscle

    Ok I've finally figured out what this is most likely to do. I think this is HIGHLY probable and would fulfill pretty much everything ever

    http://content.screencast.com/users/stevec2287/

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    my oh my, ultra bulish, it's overbought and that's dandy…

    BTW it was overbought end of february because there was still room to fall, think about it

  • https://www.evilspeculator.com berkshire

    We should all care about all the indicators in context. But from my measurements, the market is now bearish. Today was very decisive. I mentioned last week that individual equities' ATRs should tick up. Well, a number on my watchlist literally exploded this week. We finally got a 2.5% drop in one day. Things are really starting to line up.

    Skål!

  • zenith191

    Got you beat evil megalomaniac – I closed the day up 50%. Granted I am still at a 60% draw down on these puts I bought on your recommendation a few months back. Bad call dude and bad decision on my part for listening to you. Hey, maybe it will still pan out.

  • amokta

    at what time before expiration does the time-decay factor in options start to meaningfully reduce their extrinsic value (i.e when should you sell OTM puts, come what may, to recover residual value)

  • Macrawn

    It sure seems that way. Today I think started some panic. That quick rally yesterday relieved some of the oversold status and I think the door might be open for some more downside Monday. I think there needs to be a little more squeeze before we get a bounce.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    bad judgment not listening to the DROP THEM part.

    you decided not to take the bullett right then…. might work out, might not.

    BTW was there no green or blue waldo?

    Your trade, drop the violins

  • fuw

    I just want to mention that after hugging the long term trend line during the afternoon trading but refusing to break through, euro/uds finally fell under it after hours and it is now sliding along the trendline from underneath. The AH trading is less significant in the larger scheme of things, but it bodes well for Monday. If it stays below, and preferably breaks 1.470 with conviction (now at 1.472), I think that this could really help the bear case.

  • AS2009

    Guys – was just charting LVS – started with a clean slate – so that I could do this from scratch and this is what I saw …

    – On the daily timeframe – LVS today pierced the necktie of the 20/50 MA and closed below the 10 MA
    – It also touched the top of the channel and bounced back down from it – the concern is on the weekly timeframe, this channel actually looks like a bull flag, with volume decreasing / lower in the same timeframe
    – Also the last time it formed the bull flag on the weekly, it retraced 50% and bounced from the 20 MA. It has done this same 50% of the move up from July with this week's candle and bounced from the 20 MA weekly this week.
    – Based on the daily indicators, this thing looks ready to pop upwards, once it can break the channel line of the bull flag @ 16.70. However, on the weekly timeframe, this could consolidate some more

    I would exit my short term puts, if we get a high volume breakout & close above 16.75 as the next tgt is 18 … supports are LT rising trendline @ 14.32 and horizontal support @ 13.50

    Will welcome your thoughts if I am missing anything …

  • Scoops

    If anyone thinks this will be a straight ride down they are just as delusional as the people that think we are on a beeline to 1200. I'm not trying to pick any bottoms here aka catch a falling knife. Instead I'm using (and have been for a long time), a simple ATR trailing stop(widely available in Ninjatrader indicator section) and will reload on reversal bars(for newer folks…a higher high that closes in lower half of the bar, then enter one tick below on the next bar. Initial stop one tick above reversal bar). This is also Bill Williams' Profitunity method. This will run the trade to its maximum potential and take out all my guesswork. Ask yourself…what has the past 8 months taught you? What have you learned from it? I have made my preparations, my system is in place, I have my sandbox and will not step outside it. I have been heavily short since the highs because of one reason. We had a 5 wave advance, and until prices went above that 5th wave, there was no reason to be long.

  • ZeroPointMind

    Yep, charted the same channels today but I have 1025 as a target and a retrace to 1065 with a downside target after that of 940, today felt great.

  • ckeltner

    Thought I would share this memo I got today.

    Vix posts monthly bullish reversal candle after 3 monthly doji's. Highest monthly gain since oct 2008 peak. Bullish vix/bearish markets.

  • Huggybear

    Keep in mind that the 140 P/E is being calculated on 12 month trailing reported earnings, which is the most bearish possible way to calculate P/E. However, even using the most Uber bullish (forward projected operating earnings) method with the SPX at a 20 P/E multiple would still put fair value at something like 900. Can you say “bubblicious?” The Fed bubble machine is running full throttle again! lol

  • outsider99

    I like your system…simple

  • Scoops

    Cheers. Well that's only part of the system but the most important part. Keeping losses small and running profits to the max!

  • outsider99

    Agreed!! I think I'll add it to my toolbox for trading (still working on that toolbox though)

  • outsider99

    Quick question, do you use a multiplier on the ATR stop (2 or 3) or do you use the straight ATR value? Sorry for the newb question. Thanks!!

  • raised_by_wolves

    I see, whereas the early October cross of the MA50 failed, failure looks improbable this time based on the BPSPX chart. It appears that the MA200 should be hit, and RSI should spend some significant time below 30.

    http://screencast.com/t/yoB7b99EnX3

    “Mikey doesn't get anything.” / “He gets it! Hey Mikey!”

  • m123456

    funny people saying “oversold” I get it but reality is mrkt still seriously “overbought”

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    bravo! go to the front of the class and now open 3 years, 11 months etc and look at the rsi paterns, then try playing with some highs and lows (both of value and of nMA13) non-log please

    have fun

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    from what I heard and underswtand of it, it becomes exponential during the final month.

    let's face it, in 3/6 months the market can decide to make a double bottom or go straight to 1500

    in 2/3 months it can get 80% there

    in one month? with retracements and all? you're limited. a week, some days ? even in the most catastrophic scenario? there are circuit breakers at NYSE

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    depends… if I offer you a deposit without guarantee if I go broke, and I pay you… I wont even tell, but I should be able to give you TOPS 0,5% per annum

    wouldn't you want to do it right away?

    p.s. you can always find a sucker who'll pay you more than you gave me… but for how long?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    furthermore, MA200 should not get hit, see 2007.. it's 68, not 63

  • BigHouse(Aka Mr Vix)

    I'm looking at the Jan 2011 2.50 puts on AIG. I think this pig is next to go down. 2011 should be enough time. Any takers? Also looking at Jan 2011 2.50 puts on BAC.I'm willing to buy 100 contracts….When Primary wave 3 is in full force these 2 stocks will get killed …

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    and as you were such a diligent cub I'll give ONE SSH LIKE for anyone taking $SPX$GOLD chart extending back to 2007 and draws a line from the october 2007 high to the september 2008 high… and extends it

  • m123456

    Huh?

  • http://oahutrading.blogspot.com/ steveo77

    I thought all FX trading ceased until Sunday afternoon? Am I missing something here?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    equities being oversol or overbought

  • http://oahutrading.blogspot.com/ steveo77

    30 days, theta burn starts in earnest

  • raised_by_wolves

    Gangsta Chicken,

    My Hamster godfather has me convinced that the MA200 on $BPSPX will most probably be approached by the end of November. I'm not familiar enough with how $BPSPX behaves so don't know whether it would level or rise if $SPX pushes up the next few days. However, I don't think $SPX pushing to 1060ish would come anywhere close to putting $BPSPX at risk of recrossing its MA50. So, I do think both Mole's orange scenario for $SPX and Hamster's scenario for $BPSPX could be compatible.

    As for the scenario where $TRAN drops imminently, could that be compatible with Mole's orange scenario? Could the sector deviate that much from the overall market? $SPX up, $TRAN level or down? To me, it seems that they would be incompatible. On the one hand, if Mole's orange scenario plays out, then $TRAN will probably cross above the One Line if only temporarily. On the other hand, if $TRAN is setup to drop and drops Monday followed by downward trend continuation, then $SPX will probably drop too without reaching 1060ish. I'm prepared for both.

    Last question: Are you concerned that $TRAN recrossing the One Line right away could lead to $SPX ?1100? Would you be working on any bullish counts?

    -Raised By Mafia

  • Scoops

    This is the one I currently use. 3x ATR, 10 Periods, .005 Ratchet Percent. I
    think the default is 4 ATR, but to each his own.

    http://www.ninjatrader-support2.com/vb/local_li

  • Scoops

    There is no such thing as overbought and oversold. The market will do what it wants to do, and we just tend to place labels on it after the fact. We have been 'overbought' for the past 6 months, and look where it got the bears.

  • m123456

    “We have been 'overbought' for the past 6 months, and look where it got the
    bears.”

    Exactly. i think tho people mean it's oversold shrt term. on a six month
    they might still argue it's overbought or not. who knows. I don't think
    anyone knows anything this year and hopefully people are just making some
    money back whichever way they go.

  • raised_by_wolves

    The markets can be short-term “oversold” while being intermediate or long-term “overbought.”

  • molecool

    Who thinks it's going to be a straight line? Scoops – most people who visit here are familar with EWT at least on a cursory level. There'll be plenty of opportunities to jump in/out at Intermediate degree turns.

  • molecool

    “Bad call dude and bad decision on my part for listening to you.”

    I am not sure what you heard – dude – but what I was most likely saying was that I was getting into puts – I never told anyone here to do anything. If you decide to trade my trades then you own them – dude.

    BTW, I have not been 60% down by a long shot this year – so whatever you were doing had nothing to do with my trades.

  • m123456

    i know. i just thought it's funny to even utter the word oversold when the
    things gone straight up for 6 months +55% come on now that's an overbought
    bubble. short term, (each day it happened.) intermed (month to month) long
    (for last six months.) could last forever or at least until the market
    collapses again like it does every 8-10yrs.

    wpuld prefer if they at least “tried” to fix the thing a little. markets
    like a volvo with 300k miles on it. needs a real tuneup before the engine
    seizes again.

    anyway like i said I just hope people are making money and or losing less
    however they do it.

  • m123456

    sorry, when I say people i mean everyone except those who have congress on
    speed dial.

  • raised_by_wolves

    Imagine Stainless Steel Hamster speaking in a series of quick, high-pitched sounds that your ears can't quite resolve initially. I hear him illustrating a general principal that he expects you to be able to apply to the specific instance of the markets both being oversold and overbought. His is a compressed communication style. His thoughts are almost always comprehensive while his language can be incomprehensible at times. Reread his comment and try again to interpret it. If you succeed at grasping his meaning, I'm sure you will learn something valuable. I've had two too many Steel Reserve 211 24 ounce cans to help you any further. You're on your own, Mr. Series of Integers.

  • Scoops

    Surely no regular visitor here would think that. And if they do they need a
    smack down.

  • molecool

    I am trying very hard to not be biased – and based on some of the frustrations I have sensed here lately I think I did a pretty good job actually to always consider both directions. Having said that however I have to agree with Berk – this starts to 'feel' like a trend change. However – we need to see follow up sometime next week – we bears have been fooled mid summer and there is still a chance it might happen again. Next week will be the acid test.

  • molecool

    Thanks for the nice comment – all I'm getting lately it seems are attacks, which in a way was a reversal signal in itself for me. Most readers out there have lost respect/confidence as I have been extremely cautious in the past eight months. And although I didn't fall for several bear traps everyone seems to assume that I have been short for several months now which is bullpucky. On the other hand there is a group of people who attack me for having become bullish – it's insane. I guess I'm the resident scapegoat, which is why I talk to only a few people in the comment section, sick of all the drama and finger pointing.

  • m123456

    i will try to listen to the hamster while chugging steel and consoling the
    lone letter in the string.

    theory.

    best

  • Scoops

    As soon as people start taking responsibility for their own actions, the world will be a better place. Its amazing that some spend hours and hours researching prices for that next plasma tv, or drive an extra 10km to save 2 cents on gas, but will blindly shell out money by copying what someone else is doing. Mole didn't reach out from his screen to your keyboard and hit the buy button. Maybe it was Cramer?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    SQUIIXXX GSRRR!

    now that the cub is back, appart from what I already left for your tutoring in THE WAY OF THE HAMSTER

    try checking out HOW MANY False positives and false negatives you had on the BPSPX crossover with the MA13… next exercise, does it still work with GS/FED proding?

    p.s. feel free to translate to all other ferrum carbon, chromiun rodents and critters in general

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    aproached, not touched, the 200ma, as stated in previous mail and observable in 2007

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    Mole

    You're forgeting al those that respect you and your counts and scenarios, EVEN when not being 100% in line with theirs. People who feel inspired to try and do better and SHARE what they find. We are inspired by you (disclaimer, my errors are mine, even some of the “best advices” were yours to start with, never felt I needed to warn about that when IT'S IN THE MAIN POST but lattely…)

    your's friendly hamster

    p.s. raised raised the question of my communication form, maybe from our recent exchanges it could be easier to check some of them

  • Bartholomy

    Hi my rich evil friends,
    What a week $++, time to replace our stop.
    I think, below 1040, no more OPT should be add.
    Where will be the support ?
    To not bet too much on the dollar value.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    Mole, this seems to be the trend change in REAL S&P, but in 2007 we still had a long time of ascending nominal S&P while real S&p was falling… on the other hand the september 2008 high was milder in nominal terms than the real one…

  • raised_by_wolves

    Zenith, I bought puts a few months back too. I didn't do that just because Mole told me to. I did that because I thought P2 was ending. When it became apparent that P2 wasn't ending, I closed the trade. So, I listened to Mole but also thought for myself. The moment I bought those puts I decided that it was up to me to manage them. Mole's wasn't going to babysit them for me. I sold mine before Mole sold his. I took an acceptable lost for me. Mole took an acceptable loss for himself. My circumstances are different from Mole's and other traders. I have a small account, and I often trade a higher percentage of my account than he or other traders would ever consider much less feel comfortable with. So, I have to have more precise market timing. That, or stronger conviction to hold something for an extended period and actually be right about it. The important thing is that I'm aware of this. Self-awareness is key.

    Neither do I blame Mole for my previous loss, nor do I credit him for my present gain. On the other hand, I give credit where credit is do. His first-rate analysis and wave counts have helped me tremendously in learning how to be a trader. They have also helped inform my trading decisions, but they haven't made the decisions for me. Hell, sometimes I trade against Mole (though usually only on a shorter timeframe).

    I hope you can get over your bitterness towards Mole and yourself and get back to a state of healthy trader psychology.

    I'm an open-minded kind of guy so in my mind anything is possible from here—Dow 2,000 or 20,000. I have chosen a direction I think is more probable, but I reserve the right to change my mind. The important thing is that I believe I can trade and win either way. Do you believe you can trade and win either way, or are you nervously hoping everything pans out?

  • malusDiaz

    there should be at least 1 day this occurs, the crash-of the servers – is the crash =) if it all goes to zero, you don't get to collect, thats why you only bet 1 penny on that!

  • malusDiaz

    I've lost over 100% in my trading account, never did i figure someone else was responsible for my own judgement and actions.

    Learn to trade, and stuff you ego.

  • raised_by_wolves

    Thanks for the update. I view the SPX in dollars everyday. I will start viewing the real SPX everyday as well. 🙂

  • malusDiaz

    Long gold & short the market, the *impossible* to happen trade !

    if gold perks up, when the market is down, especially on Monday, gold is on the verge of another break out, mmmmmmmmmmmmmmmm

    but we should also see GLD/SLV ratio up, so dropping slv faster then gold (check)

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    and draw the line I told you about.

    that and play with BPSPX

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    remember that gold rises to the sky and the, though long term interesting, is shortable to hell (have you seen my side by side comparison of s&p, gold and real S&p?

    Right now gold would be shortable (top of the channel), at 1300 and safe long at 880 (bottom). btw the monthly exponential has a 95% R2

  • raised_by_wolves

    Although there is contained upside potential for $SPX:$Gold, there is still upside potential. Another couple months and the highest $SPX:$GOLD can possibly reach is ~1.1 if the trend line (only two points! . . . though very important points . . . and I think it could be drawn with more points if extended back further) holds as resistance. However, that trend line resistance could be tested if the MA200 is tested and holds as support as you think it will. So, you expect $SPX:$GOLD to find support at the MA200 and rally to the trend line, don't you?

    http://screencast.com/t/xDYLqN0I

  • raised_by_wolves

    Hehe, yes, those are repulsive and despicable slimeballs.

  • raised_by_wolves

    Nice to meet you sir. Or, are you a woman? If that's the case I should have addressed you as Miss Series of Integers. You would have corrected me though, so I will continue presuming you're a man. An avatar would help me identity you in the future. Cheers.

  • raised_by_wolves

    Master, since I've been awake since pre-market 20 hours ago, will you permit me to take my rest now and continue my studies tomorrow evening?

  • raised_by_wolves

    Draw the line—done.
    Play with BPSPX—tomorrow.

  • raised_by_wolves

    I'm a borderline NINJA. The only assets I have are puts, cash, and cans of beer. Scratch cans of beer. I just drank my last one. 🙁

  • raised_by_wolves

    Whoa, I'm so spacey right now that I'm confusing $BPSPX and $SPX:$GOLD in my own personal thoughts. Hopefully, I didn't do anything like that in my comments.

    Whereas $BPSPX “cannot” hit its MA200 much less fall through it, $SPX:$GOLD can fall through its MA200 but may find support there, correct? If it finds support there, $SPX:$GOLD can move up to touch the trend line, eh?

    Will you post the link to your pills again? Forgive me for forgetting to bookmark your chart.

  • m123456

    i prefer Monsieur or mademoiselle.
    *
    *
    or u could just call me mr. french
    *
    *
    *
    *
    *
    *
    *
    *

  • ultra

    So it has. This was my uncle point too. Still very far from writing off soylent blue though – this drop counts beautifully as a correction, whereas it looks a bit fked as a motive wave at the small scale if you ask me. And then we look at the Dow and if you don't bend the rules that is either corrective (up next) or a series of 1,2s (down hard), whereas we are expecting S&P to bounce. So it's mixed messages to a certain extent.

    A serious bounce would fk a lot of bears, which is why I like it as a scenario – high evil rating.

    But I've been wrong before and I'm sure I'll be wrong again. This market has a way of leading you a merry dance…

    Important thing is that 2 out of my 3 scenarios are saying the same thing – up on Monday to some degree, so that is what I'm positioned for short-term.

  • ultra

    Not quite sure what you mean there. If you had bought gold and sold the Dow in 2000 you could have retired by now.

  • goldpackers

    My sermon –
    Either finished an A-B-C down Friday and rally back to `1067 into 11-9 before another A-B-C down into ~11-17 and 978 to 1000 at minimum.

    Have done a 1-2,1-2 and will collapse in a 3rd down M/T, big Gann days, and headed to 900 into ~11-16/ 17, big Gann days

    I favor the second because the charts are horrific. But I fear Obama Ben Geitner.

  • ultra

    I know folks follow NDX:SPX as a measure of the market's speculatory fever, but do you ever look at BPNDX:BPSPX? This is, I think, an interesting chart.

    http://stockcharts.com/h-sc/ui?s=$BPNDX:$BPSPX&

  • fuw

    No, I'm the one that messed up. We broke in late trading. I'm in europe was just was just watching the chart in retrospect and didn't connect the action to the correct US time.

  • mattco

    The market can also work off oversold conditions without going up. Just something to think about.

  • innatedc

    Ok rats you need to see this chart…..Overview of SPX chart now compared to the last retracement.

    http://www.screencast.com/users/innatedc/folder

  • old_lefty

    Steveo, Very interesting chart. Since you have compiled the data, what is the average positive and negative value over that period of time? Or what does a histogram of the values look like?

  • amokta

    thanks steveo – so for my longdated puts, i need not worry about theta for now!

    also – anyone, as my broker charges ludicrous ($1500 broker charge for 100 spx contracts, $120 for 4) will is get as good a return for the same capital if i buy fewer put contracts at a higher premium for higher strike

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    I shoudn't post when sick and tired….

    the high was the 2007 real high (not october)

  • TomOfTheNorth

    Happy Halloween, Rats….Muuuwwaaaahaaaaaahaaaaahaaaa!!!!!!

    http://outsidethe-cardboard-box.tumblr.com

  • molecool

    Great chart! I'm not a big fan of short term MAs but this nicely shows the characteristic of the current environment and the 200 day MA is a factor and might actually be a catalyst for Intermediate (2) of {3}.

  • Duuuuuude

    Mole,

    Thanks for the help! No, not on wave counts. I began seeing a German woman a few weeks ago, so I sent her a message yesterday with “Wer wartet mit Besonnenheit Der wirt belohnt zur rechten Zeit” in the subject line. Long story short, I received major points! Looking forward to tonights date! lol

  • molecool

    Jan 2010 for the bottom of (1) – June for the bottom of (3) and yes either December or March 2011 for the bottom of {3}.

  • molecool

    Jeezz – you guys are NOT listening. Short term oversold of course! Just enough for a Minute wave to the upside! Which is a tiny degree compared with all the downside that's coming

    why do I even bother…

  • molecool

    At least someone is paying attention.

  • molecool

    That's correct – however 2nd waves usually paint some kind of correction to the upside.

  • raised_by_wolves

    And I shouldn't post when tripping on acid.

    This changes everything. I plan to rework $SPX:$GOLD this evening.

  • raised_by_wolves

    Monsieur, I apologize if you were hurt by something I said. I thought we were having a playful interaction. I liked your congress on speed dial remark. You even mentioned string theory in a way I found clever. Cheerio.

  • m123456

    it's saturday. chillax.

    I just think it's funny, ( sorry not “funny”) but actually sad that the
    word “oversold” can even be uttered during the what will called the “puppet
    bubble” of 09 in the utopianpostapocalyptic future of 2010.

    I don't care if it's short, long, intermed, wide, vertical, whatev.
    technically it's oversold. you're all right. so short, naked put, double
    bubble it, or whatever you do to rake in the dough. good luck (not
    sarcastic)

    I meant morally the word oversold should be banned until at least dow 8888

    most importantly god I hope the jets beat miami. (fact I'm a jets fan pretty
    much sez it all)

    now everyone spend some money so the consumer senty can go up .00000001
    allowing another 2000 point market rally.

    j-e-t-s!

  • elliott_surfs

    Some humor for the weekend. Michio Kaku (physicist, love this guy!) gives his take on the 'saved jobs' number.

    http://tinyurl.com/yjvxtum

  • Anonymous

    I think many told you Think or Swim biut as I use Fidelity I use their special Options Module for Active Traders

    ________________________________

  • Anonymous

    Defender – do you have a link to their rates for the active trader module? I’m having a hard time finding it =)
    And thanks for the suggestion!

  • gmak

    Nicely summed up in a simple succint illustration of reversion to the mean.

    Cheers.

  • gmak

    heh. I'm not going to eat a giant cheesecake, so I'm not ingesting 3,500 calories and I must be losing weight, because if I ate the cheescake I would gain a pound.

    Gotta love it!

  • PeterK80

    Hey everyone. thanks mole for some great guidance this week.

    I have been constantly questioning whether to use “non log scale” charts vs. “log scale” and it seems as though the log scale charts work better with trendlines short term… but on a longer term time frame the “non log scale ” charts work better for trendlines. I usually have one chart for longer term and then a shorter term 2-3 month SPX chart I follow that is log scale. So I tried something, I recently applied non-log scale major support lines as see here http://screencast.com/t/NBSlaMGT8Z to my shorter term charts as best I could. And this is what it looks like:
    http://screencast.com/t/1l0liLAvZRv0

    Things match up pretty nicely. Was wondering what peoples thoughts were on the log vs. non log scale.

  • Anonymous

    Hi: What do you mean their rates? Prices or data? please clarify?

    ________________________________

  • Anonymous

    Nevermind, found the page. Thanks again Defender

  • Anonymous

    Suire thing good luck

  • http://ewtrendsandcharts.blogspot.com/ Columbia1

    Howdy Mole, I put together an interesting post today, that was sparked by your post last week about fractals, and with that EVIL, bearish count I showed you yesterday!!
    http://ewtrendsandcharts.blogspot.com/2009/10/f

    Enjoy!!

  • http://oahutrading.blogspot.com/ steveo77

    I still have some money with Morgan Stanley whose trading costs are based on the transaction size. So to buy 1000 shares of BIDU or 10 contracts, the trading costs will be massively different. Obviously, I just do the options.

    But get an account with TOS or IB. It is so easy to set up, and the charting and ability to set alerts and control your trade is so much better. With IB you can do single stock futures, which will be important since I think in P3 shorting will be made difficult if not illegal. Options may be forced to be sold or exercised early. Think about…what is not possible, almost anything is possible.

  • malusDiaz

    because that represents both inflation & deflation at the same time: deflation from falling stock prices, and inflation from rising gold prices.

  • http://oahutrading.blogspot.com/ steveo77

    Huggy you are correct in looking at things in various ways.

    Think about this though….what if the economy turns down and earning go negative for a few years?

  • http://oahutrading.blogspot.com/ steveo77

    Nice chart

  • molecool

    LOL – actually, there is really not that much to be said, mate. The wave count thus far leaves us with mostly two main interpretations. Until we disqualify one of them we can talk all day but the market has to make its move now.

  • molecool

    Guess I lucked out not getting filled on those 😉

  • http://ewtrendsandcharts.blogspot.com/ Columbia1

    No, I only recently found this blog. I would love to see your post, if you get a chance, please post a link 🙂
    I tried to find it under trading/fractals but did not succeed.

  • molecool

    Did you see my post on 2003 – 2006? Same fractal – different resolution. I keep saying this over and over again – history does not repeat itself (exactly) but it rhymes.

  • molecool

    Enjoy that teutonic poonani – German women are very liberated sexually – none of puritan biases/inhibitions/shame/guilt crap you poor yanks have to deal with.

  • jesterx

    been following that guy from http://www.forecastfortomorrow.com/news and he has been nailing it.

    He is not calling for a crash but now we have broken some pretty important lines for steady down. I saw one of his post where he was saying some of the daily patterns from 2008 were repeating, and he was using that…and its like 90% accurate….was very clever way of doing it.

  • ultra

    Well, that's exactly the situation you had 2000-3 and for periods in the 70s (or the whole 70s period if you take the inflation-adjusted Dow).

  • Duuuuuude

    She is actually East German. She is as you advertised…….Simply amazing! There are no other words!

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    well RBW

    chose a dead thread so we could chat a bit more privately.

    The constructed approach to communication, the focus on subjects as interests, the rationalised view to human interaction.. all that seems like aspie to me.

    in spite of what is told, the lack of mirror neurons means no smaller agape (i wish) and though it means no normal emotional “vision” you often end up developing a “radar” that goes below the surface. and yes, sometimes it's too much effort to bother.

    there are aq tests by Borat's cousin in the net, take one and say something

    best regards

    p.s. the ability to hold un unwholesome quantity of details within a mutable global framework is one of the habilities neurotypicals are not at ease with

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    well RBW

    chose a dead thread so we could chat a bit more privately.

    The constructed approach to communication, the focus on subjects as interests, the rationalised view to human interaction.. all that seems like aspie to me.

    in spite of what is told, the lack of mirror neurons means no smaller agape (i wish) and though it means no normal emotional “vision” you often end up developing a “radar” that goes below the surface. and yes, sometimes it's too much effort to bother.

    there are aq tests by Borat's cousin in the net, take one and say something

    best regards

    p.s. the ability to hold un unwholesome quantity of details within a mutable global framework is one of the habilities neurotypicals are not at ease with