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Cliffhanger
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Cliffhanger

by The MoleAugust 6, 2010

Ending Diagonals are the root of all evil as they repeatedly lure in bears and bulls alike – thus inflicting the maximum amount of pain until the grand finale. Which I believe is not yet in the making however – I hope I’m wrong (please let me be wrong on this one) – thus far all I see is a fast non-confirmed emotional drop. Remember, bad news do not matter when market participants already made up their minds on where the tape needs to go.

Before listening to this make sure no pets or young children are in the vicinity.

We dropped to a pretty interesting inflection point – take a look:

Interesting spot for support and dip buying to kick in, isn’t it? I often said that the market is a cruel mistress. Well scratch that – rather she’s a sadistic cunt who’s bent out on ripping your balls off and serving them for breakfast Monday morning.

I know I owe you guys the next installment on the Elliott Principle option strategies series – let me get to that…

Cheers,

Mole


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

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

    yes boss, we might, or we might not, spx:vix went to sma13 and might yet make a last effort above sma208

  • fisheggs

    So – Rally or bust

  • DarthTrader

    Yes interesting

    VIX diving now 22.95

    Don't be a Bull

    Don't be a Bear

    Be a Reversal Artist

  • Tronacate

    I feel another wedgie

  • http://chartsandthat.blogspot.com/ ultra

    Schnapp.

    Also, if you look at NYADV/NYDEC there is either a bullish divergence or it is leading the way…

    http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0

  • Tronacate

    Rimm just popped another mil share 5min candle

  • fisheggs

    Nice chart Ultra!

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

    short term top is in, rise from here only on overbought

  • BobbyLow

    Once again you can almost set your clock by these bastards. I can hear the machines winding up now. Whrrrrrrrrrrrrrrrrr.

  • BobbyLow

    The current 15 Minute Candle on SPY is unbelievable. I guess everybody thought it was a good time to buy at the same time. LMAO

    Let's see if they build from there.

  • https://evilspeculator.com molecool

    Alright, are you happy you subscribed to the Zero now? 😉

  • http://chartsandthat.blogspot.com/ ultra

    Friday choon for ya – bit of Ibiza house goodness – for some reason it seemed appropriate!

    http://soundcloud.com/aeroplane/i-crave-paris

  • LilSpaniard

    I'm very happy. Thanks Mole

  • http://chartsandthat.blogspot.com/ ultra

    It called it – fair dues..

  • https://evilspeculator.com molecool

    Nice tune! Never heard of soundcloud – very cool.

  • Tronacate

    Makes me horny

  • https://evilspeculator.com molecool

    Hey, I'm the attention whore around here! Get in line.

  • https://evilspeculator.com molecool

    Wait until my next post – hehehehehee

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

    strannge divergences call this rise a FAKE

  • Tronacate

    Fuck no……it costs money…….and I'm a cheap bastard

  • http://chartsandthat.blogspot.com/ ultra

    BIG fan of Aeroplane – the mixes on there are ace as well – check em out

  • http://chartsandthat.blogspot.com/ ultra

    LOL – what doesn't?

  • DarthTrader

    Gave you a “Like” Mole on your new Post didn't know we could do that.

    Not necessarily for this post more for your consistently maintaining a Clear Stance on the internal nature of this market.
    However many of the Stainless Steel Rats who listened are very happy they did.

    Good on ya, Mate

  • Tronacate

    Quit kissing ass…..

  • http://chartsandthat.blogspot.com/ ultra

    haha

  • finansreven

    Yes Mole, you keep a certain person who get into trouble all the time out of trouble. Will renew!

  • Tronacate

    hmmmmm

  • DarthTrader

    Hey . . . If ya got a talent

    lol

  • Tronacate

    Billionaires like mole should give free acess to Zero just to enrich the society at large.

  • Nightwind

    If he did that,…he wouldn't be a billionaire

  • Tronacate

    Quite the exponential style move….makes me think bullshit

  • Tronacate

    Or was it “PARABOLIC”……:)

  • https://evilspeculator.com molecool

    Call the Zero your monthly premium on 'staying out of trouble' insurance 🙂

  • https://evilspeculator.com molecool

    You'll get your turn in the next post – wait for 4:00pm.

  • Tronacate

    Mole the insurance agent…….sell auto and house stuff too?

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

    Zie Mole haz un offer you can't refuze….

  • https://evilspeculator.com molecool

    Damn, I just bought life and new health insurance this week – I'm insured against pretty much everything. What a straight wanker I've turned into at my old age…

  • Tronacate

    As he lights up his fag……

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    QE in options mkt today?

  • https://evilspeculator.com molecool

    I think you have a bright future in our organization. Bring your own Springer boots though – we are running low.

  • https://evilspeculator.com molecool

    Someone actually wants to talk shop on Friday. Okay, what you got?

  • Tronacate
  • SW6

    Mole as a position trader, would the daily Zero be the indicator that I focus on if I subscribe?

  • Tronacate

    Speaking of lighting up a fag:

    http://www.theonion.com/video/new-antismoking-a

  • https://evilspeculator.com molecool

    What is your window? Weeks/months? If so then you are in my camp – although I do look at the short term the long term outlook is what I preach here. The daily Zero has received a significant amount of attention lately as it was instrumental in calling various bear traps as well as showing us important trend changes.

    If you email me at admin at evilspeculator dot com I'll spring you a free week since I am in a good mood. And Tronacate – don't even try – I know you!! 😉

  • https://evilspeculator.com molecool

    I was just getting into the position – damn it – you don't grant me any action.

  • Tronacate

    SW6……don't do it……it'll keep you from discovering the various ways to destroy your account on your own…..:)

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

    Just dental, protects your cavities

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    how many MKT on Close orders are out there in 401ks today???? last 20 will be set in 10 mins

  • BobbyLow

    Well you got to give them credit. Not only will they be able to close above the 200 on SPX but it looks like they'll close it green.

    These guys are good – very, very good.

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

    and my own katana? a 9260 or a clay tempered T0?

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

    (those are just rumors, he just beats them up a bit, ok and drowses them in gasoline just to scare them, but he never actualy lit one)

  • Tronacate

    Just spit my diet coke out my nostrils…..thanks buddy

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

    DIET coke… bit of a fag thing… (getting the matches and the katana)

  • SW6

    I'm in this over the long haul. So, my time frame is weeks and months. I've traded in and out since the April 26th top. I was short for the top which was nice. But the whipsaws later on were pretty tough going. I have no plans to keep trading for the whole bear market as I think the difficulty will just exceed any skill level I'm able to keep building on. I'd like to keep at the trading until end of 2011.

    Yeah, i'll email you Mole and thanks.

  • BobbyLow

    Question? If the equities market is such a good buy then how come the demand for 10 year almost loses a full point currently yielding a whopping 2.82%?

  • SW6

    Wise guy. 🙂

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

    still disbelieving this rise, divergence on w%r, fast k&d playing hide &seek….

    Be careful about going long into the weekend if you're considering it

  • http://chartsandthat.blogspot.com/ ultra

    LOL. No chance!

  • Tronacate

    :)……..it's good……..every time I think I don't need it…..snap goes the trap……

  • finansreven

    Well, I'm gonna close half my long position in the SPX in the last 15 minutes. But want to keep the rest, maybe put the SL at BE, just in case.
    Been looking for mid 1140s this end of week, and that is still the place to sell, and start thinking again.

  • BobbyLow

    Now that I have all my Long Hedges taken off, I'm done tweaking. I'll go back to using the Ali “Rope a Dope” strategy with my existing short position for awhile.

    What I'll probably do next is add more shorts @ < 1088 and I don't even want to think about if we never make it there.

  • sloth_bear

    LOL! I have to tell my wife that I am gay!

  • Tronacate

    Just quit putting your lips on the butt of that fag…….

  • SW6

    Mole, I just sent you an email…

  • sloth_bear

    Yes, I would laugh at our poor faces @ dow 20 000, I'm really about to bet the farm on this third wave that we may never see…

  • DarthTrader

    VIX was up 1.81 today but then closed down .36

    On one hand that is what I want, a VIX that keeps dropping to give incredible Bargains on Bearish Options

    OTOHand this is the type of action we have seen at highs and lows . . . Lots of Switchbacks/ Crazy Ivans from day to the next or intraday like today. Basically shaking the Tree Big Time to so as to make the next move with as light a load as possible.

    So is this a top or a midway point?

  • BobbyLow

    In a weak attempt to close out a shitty day on a happy thought, Back in May, I bought a bunch of December 105 Puts for $7.13 and knocked that cost down via a Spread. The short side of the Spread was December 100 Puts and December 95 Puts in even amounts. This was my biggest exposure.

    As of today, FBOW, I no longer have the short side of that spread. However, the net profit from the Short Puts dropped my net cost on the 105's down to $4.58. I could have theoretically bought them today for that price. The December 105's are trading for about $4.11 which means that I'm down a net .47 per share at this moment.

    I don't know how these are going to wind up in the end. There is no longer a Cap on any potential Gains but OTOH, I am exposed to the $4.11.

    I also own and am underwater on December 90 Puts, and March Puts at the Strikes of 70, 65, and 60.

    There is potential for a decent payday down the road. But potential is all that it is.

    I don't want to put too much logic into thinking about this market but I read where people on another site were talking about how just before the close that the ass clowns on CNBC were talking about how nothing can take this market down. This typical CNBC Bull Shit, against what I can see with my very own eyes, my elevated Puke Factor and of course Mole's long term charts are keeping me in the game.

    I guess “a summer of pain” is really an appropriate description of this market. And it is what it is.

    Have a good weekend everybody.

  • DarthTrader

    Tom Sossnoff and Tim Knight on TOS Market Cast

  • BullandBear

    You don't understand how Asset Allocators work.
    Once the Economy (and consumer) come back, the AA crowd will sell bonds and guess where they will re-balance their asset mix towards?

    Answer: Equities

  • BullandBear

    Market comes back from -160 to -21 and once again all of the “perma-bears” are lying on the floor in a coma. They can't believe their eyes…. just as they can't believe that the Euro is back up at 132.50

    I ask any BEAR to take a look at the charts of ACI, ANR, BTU, CLF, FCX, WLT, and X and let me know how anyone can be Bearish on those daily chart patterns . . . +30% gains in many of those names in just the last 14 trading days.

  • ricebowl

    So you're suggesting that computer programs (asset allocators) will magically detect when the economy comes back and with the stock market at all-time highs will then go hugely long equities? Or did I miss something?

  • ricebowl

    So do you buy at the 52-week low or the 52-week high? I could be mistaken, but I thought you were supposed to buy before the +30% rally. Additionally, if you check out the 3-month chart of X, I believe you will find that $48.50 is nowhere close to the $70.95 it was trading at at the end of April.

    You could have made the exact same argument in April about stocks having rallied so much — bears got totally creamed during that period. In March there were 13 or 14 trading days in a row where the S&P closed green. Of course, anyone who cash flowed their short position from that time has nominally made money. Unless you have a good reason to believe that the economy is going to steamroll its way back to unprecedented growth, there is no reason to be buying equities here & now. If you're not in already then you missed the boat.

  • Thespookyone

    Price RULES-don't be confused.

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    Here is a great chart of US Steel….

    http://stockcharts.com/h-sc/ui?s=X&p=D&yr=0&mn=

  • BullandBear

    You missed my point.

    There are TONS of people playing “Pick the Top” over the last two weeks and they have been completely buried. They act as if every single day will be “Black Friday” and when that doesn't happen, they hope for “Black Monday”, etc.

    So many Bears still out there “camping” out on these blogs.

    Feel free to take a look at Daneric's ANALysis this weekend and all of the kiddies that continue to drink from his “Perma-Bear” Kool-Aid. I suggest that none of these guys actually TRADE for a living… If they did, they'd have gone Bankrupt over the last 12 months!

    Moreover, if they really did TRADE for a living they'd be trading individual stocks, rather than pissing their time away trying to predict P3 in the S&P. I could give a rat's ass about P3. All I want to do is jump on stocks that are taking out the previous day's high and have a shot at taking out the weekly high. The coal, iron ore, and copper sectors have been doing this.

    But in the Blogosphere, everyone thinks that they are the next Joe Granville… so all they care about is the Dow and the S&P. They really don't care about trading, or making money.

    Period.

  • BullandBear

    I suggest you do some “homework” and learn about what it is that Asset Allocators are trying to achieve as they re-balance their portfolios between GLOBAL asset classes of fixed income, equities, and the dollar.

    They are “quant” shops that look at asset classes and how they are valued at a particular time, against a particular economic backdrop.

    You naively claim that the US stock market is at all-time highs.
    My guess is that you would have said the same thing about the US Treasury Bond market a year ago too… but look at where prices are now.

    Do yourself a favor and read up on a southern california Asset Allocator called “First Quadrant”. They manage $36 BILLION in assets.

  • BullandBear

    Just read a “rant” by Kenny about how Prechter and Hochberg are a bunch of LIARS!

    Too funny.
    I wonder how old people like Kenny and Daneric are.
    They obviously were not around for Prechter's “Lost Decade” from 1993-2003.

    But hey, if you want to take the easy way out and drink the Kool-Aid as a “follower”, be my guest. You're a complete IDIOT and FOOL if you do, but that's your choice!

  • ricebowl

    And my point is that there is no more reason to believe that the S&P is going to rip rocket upward from here than there is to believe that it is going back down into the abyss. It's absurd to believe that because the market is going up it will continue to go up or that all bears are stupid because some bears are stupid. I could care less what the blogosphere is saying because I don't frequent Daneric's blog or most of the others.

    If you were paying attention, even in this blog post mole has said that this isn't a top and there is more upside to come. I post very infrequently these days, but over the last week I said 1) there was short-term downside to come 2) 1130 is not the top. I don't recall what my prediction on the timing was, and it could have been off, but the direction was spot on, and it wasn't permabear. Bob the Horse has been long and just *recently* turned bearish, and he gave his reasons, none of which had anything to do with P3.

    If you are investing based on fundamentals then you'd have to be out of your mind to be *buying* stocks after an 80% rally coincident with unprecedented economic uncertainty. This, however, is a trading blog and not an investing blog, and we buy, sell, or do whatever it takes to make money, and fundamentals do not even enter the picture. And by the way, the fact that /ZB has retraced very little since the 1010 low on the SPX ought to be setting off red flags for anyone who cares to listen to what the market is saying. Finally, as I said before, we are traders here, and in spite of my bearish views on the economy and the market, I was long for part of last week.

  • ricebowl

    Sarcasm is unfortunately lost on the Internet. I am well aware of quants and their construction of positions through adjusting a bonds/equities mix. However, these asset allocators do not “wait” for events to kick in; they are already at work today, and they aren't suddenly going to drive bond yields up. Furthermore, the stock market is a forward pricing system, and it will be at or above the all-time highs by the time economic recovery is certain. If you would read more carefully, I never claimed that it is at all-time highs right now.

    So here're my questions for you:
    1) If the economy is doing great, why did a shitload of people sell stocks and buy bonds over the last 3 months?
    2) Did you come here to participate or to convince people to fall over themselves to buy stocks with you?

  • BullandBear

    The Blogosphere is full of “Traders”.
    Have you ever noticed that?

  • BullandBear

    “However, these asset allocators do not “wait” for events to kick in; they are already at work today, and they aren't suddenly going to drive bond yields up.”

    You couldn't be more wrong.
    Asset Allocators are like slow moving Dinosaurs that do not get in at the bottom, or sell out near the top in the bond and equity markets. They are not TRADING firms. It takes them a while ( and weeks, if not months, or a quarter or two ) for CONFIRMATION of the valuation that they are seeing in their models. They are not as “dynamic” as you tend to imply or suggest.

    I know, I used to be the global financial futures trader for an AA shop called TSA in Los Angeles.

  • https://me.yahoo.com/a/X7GBX9UAt5mvO3TqAxsQz2Rx_jvq58H8tQ--#c921f KnowsTheDeal

    Looks like no one replied all week. I guess they knew how to keep an asshole in suspense, eh WAGS.

    Click this guy's avatar to see what an arrogant, schmuck he is.

  • https://me.yahoo.com/a/X7GBX9UAt5mvO3TqAxsQz2Rx_jvq58H8tQ--#c921f KnowsTheDeal

    The guy, BullAndShit, is an arrogant ass. Click his avatar and do some reading. He is a troll!

  • https://me.yahoo.com/a/X7GBX9UAt5mvO3TqAxsQz2Rx_jvq58H8tQ--#c921f KnowsTheDeal

    Would you SHUT UP…you know NOTHING you damn troll!