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Coiled Up To The Max
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Coiled Up To The Max

by The MoleSeptember 15, 2015

As you are probably already aware – the Federal Open Market Committee begins a two-day meeting on Wednesday and will deliberate the first interest rate increase in nearly a decade. Analysts seem to be split over the outcome however I would be rather surprised if the Fed decides to hike. Yes, there has been a lot of pertinent jaw boning since late last year. But behind all the spouted rhetoric hides very tangible fear about the shock waves a hike may cause. For one the Dollar would most likely punch massively higher – affording the mighty Mole an even more lavish and immoral lifestyle over here in poverty stricken Spain. Expect me to buy up massive amounts of property and elect myself the rightful ruler of Valencia. Heck maybe I even change my last name to Borgia and re-implement prima nocta.

2015-09-15_spoos_LT

But all joking aside – while everyone is treating water we rats have work to do. No other chart shows us the accumulated anticipation like the E-Mini futures and I have decided to post a tryptic so that you are able to take in the entire context, starting at the daily, the weekly, and most importantly the monthly panel.

You don’t have to be seasoned analyst to see that the daily is now curled up to the max. That first drop down may either have been this year’s correction or it will be remembered as the first dip that preceded a massive slide lower in equities. If I had any idea as to where this pendulum may swing I would offer it. However we are literally sitting at the gates of hell with almost perfect context across all three time frames. By anyone’s definition this is a very bearish looking chart. But I have seen too many stick saves in the past few years to count out the bulls just yet. Thus, lacking any further evidence and with daily/weekly/monthly support levels yet intact I have decided to hold my small long positions I placed last week.

2015-09-15_ZF_update

Bonds update – here I have gotten a bit more luck. The Friday entry was well placed and I am now moving my stop to break/even.

2015-09-15_gold_setup

I’m waiting for a little bounce higher so that I can get short gold. Willing to be long above the 100-hour SMA but only 1/3R if it plays out this way.

Where is the gold!!? Anyone remember this awesome band from the 1980s? I used to dance my ass off on that tune way back in the days – we’re talking spiky hair and Doc Martin boots – the works. Unfortunately they just don’t make raw uncompromised music  like this anymore. Whether or not you like EBM – in today’s PC soaked social media policed environment this feels like a refreshing air of authenticity from the past…

Anyway, quite a bit more looming below the fold – please step into my lair:

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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  • Skynard

    Hehehe, allot of setups today:)

  • https://evilspeculator.com molecool

    Crawling out of the woodworks. Rolling up the sleeves…

  • Skynard

    yES SIR, GAP FILLED ON THE /es NOW.

  • wandering196

    Treading very carefully. But took a couple of the setups.

  • Skynard

    Judging by the ZL we should have a trend day:) Finally resolved now.

  • Skynard

    If VWAP holds it shows strength.

  • https://evilspeculator.com molecool

    I don’t think we’ll see much of a trend before Thursday….

  • Darkthirty

    60 day chart looks like b / c/ B to 1910 – C / 2 to 2050 – 60 range

  • Skynard

    Think we see buyers thru then, SPX 2K idle. Anticipation of a new rally.

  • ridingwaves

    you could see this low volume melt up happening yesterday when bears failed…

  • Skynard

    Agree, the ZL has been showing us as well. See if we get some follow through. Check out that wedge on the hourly.

  • Skynard

    She got legs now

  • Kishore Kumar

    Returns for S&P 500 (futures) during select times of the day: https://twitter.com/JoeSaluzzi/status/643759238783836160 … pic.twitter.com/378lnsunQY

    Interesting chart. Should invoke some discussion and influence intra-day timing strategy. To me, it appears that the market, especially after 2010, has been up only due to the courtesy of the “midnight bandits” who buy S&P Futures during low volume period of 12-4am.

  • BKXtoZERO

    other dangerous times are afternoon and near closing

  • Bill

    I saw that the other day. My thought was to see if the times could be broken up further / optimized and then use some other type of filtering to really up the percentage. I guess now that the “secret” is out things might change quickly though.

  • Skynard

    /DX 96.00 backtest. getting long AUD again @ .705

  • Darkthirty

    10 AM / 1:15 PM

  • CandleStickEmUpper

    Dont forget 8 am – 930 am can be dangerous too. In fact, dont trade at all.

  • Skynard

    ZL fakeout, potential rip higher at this point.

  • https://evilspeculator.com molecool

    Where the f… is everyone?

  • wandering196

    I’m around, took 2 of your forex set ups. I am not doing much until after Thursday.

  • Darkthirty

    If you’re not living on the edge…..you’re taking up too much room!

  • https://evilspeculator.com molecool

    Attagirl 🙂

  • newbfxtrader

    Short meats in general long grains … my account is looking vegetarian….

  • BobbyLow

    When your stuff and or rules says to enter or exit a position – do it. It doesn’t matter what time it is.

  • ridingwaves

    back near 1980…resistance looms..

  • newbfxtrader

    1990? could be resistance. Wont hold this time around.

  • tradingmom

    I’m here, watching the SPX triangle break up into a perfect tag of the 20 day ema. Thinking about the general rules about triangles/coil breaks that I’ve read over the years, but hearing the imaginary voice of Scott telling me that if I haven’t got backtested stats then it might all just be hogwash. Still, I use the 20 ema as an accelleration line a lot of the time…I’d be tempted to short here if there wasn’t so much event risk.

  • Skynard

    Old me would have tried to short. Been anticipating this event and been long.

  • Skynard

    Crude gana rip now, big shakeout:) Added to position

  • Darkthirty

    Just noticed reversals/stalls at those times over the past 8 years or so………..but I scalp minutes

  • https://evilspeculator.com molecool

    Exactly. I can literally hear your brain switching gears trying to find clues where there are none. Follow the ST charts darling as the daily and LT ones do not provide us with any context we can use right now.

  • https://evilspeculator.com molecool

    Excellent.

  • evilasevildoes

    weeee got out of fat finger zb long versus zb short…damn wontr ever do THAT again

  • https://evilspeculator.com molecool

    yeah, my ZF got stopped out at break/even rather quickly :-/

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

    Been flat a week to see where we end up by Thurs morn…

  • Skynard

    Took our 205 calls off a tad early but effective:) 25%

  • evilasevildoes

    i tried that ZN trade…..yseterday…..man o man…intersting TBF not moving

  • Darkthirty

    NVI targetting 1980.88

  • mugabe

    timid but steady advance the last few days

    still lots of white space ahead before we hit the White Wall of resistance (assuming we ever get there).

    but I know nothing

    and then there’s the fed …

  • Skynard

    Lol, Crude! What a FN bitch.

  • BKXtoZERO

    not trading…………..

  • OJuice

    For the zero wizards, does this constitute a tradeavke divergence?

  • Skynard

    Still bullish, although one could attempt a late day short with all the volitility we have had.

  • Skynard

    Would have attemped about 10 sec ago:)

  • BobbyLow

    Been Long since 9/1 and have held through Slice and Dice Mode for the past 2 weeks. It’s gone “nowhere man”.

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

    But it will play out one way or the other. 🙂

  • Skynard

    You have been trading a W4, looking now for a final move up to 50 or so.

  • satouse

    resistance coming

  • Darkthirty

    out long, ATM short

  • Skynard

    There it is, chances are a trend day and will not give the bears a chance in hell right now.

  • https://evilspeculator.com molecool

    Good question – IMNSHO it’s still a bit too subtle. Especially given the hard ramp up.

  • https://evilspeculator.com molecool

    Arguably the signal is getting a bit weaker. But on trending days like these I would be cautious taking contrarian positions unless you see something very pronounced.

  • Darkthirty

    Two domed houses , head and shoulders inverts with batwings and butterflies and a T….LOL

  • BobbyLow

    W4 would explain it. Unfortunately, a lot of times I don’t know I’m in a Wave 4 until I already have a position. If this is the case, I’ve found that it’s best for me to hold through the slop until price moves out of S and D mode. This way if I’m wrong, I’m only wrong once instead of multiple times.

  • Darkthirty

    Short term 4s are too risky, 3s and Cs look alike. Fuck up and get bit!

  • Darkthirty

    pickin up pennies

  • Skynard

    Waiting for 2K, stops up their need popping. Textbook breakout and potentail fail. W4, could also go higher.

  • BobbyLow

    I have a basic understanding of EW but beyond that it makes my head hurt. 🙂

    My trades in the energy sector are designed to go for more than a few days when they work and the longer they’re in play the better. I just use Simple Bollinger Bands and multiples of ATR for my stops tied together with a few rules and it keeps me out of trouble.

  • Skynard

    Beer money

  • Itslance

    Closed out my small long from yesterday. Not taking on anymore positions. Might lose some upside, but history tells me to take my money and run. Right near the 25 day sma, I assume there is going to be some monkey business like a 30 handle drop overnight.

  • Skynard

    Ride that Fer now, should be good to go.

  • Skynard

    40

  • Darkthirty

    If it works for you, kill it! I have trouble sleeping with trades on…..seen too much bullshit!

  • Darkthirty

    I’m fucked up enough without alcohol or drugs!

  • Darkthirty

    4W expiration, you bet there’ll be some fuckery!

  • BKXtoZERO

    Thanks for sharing. I am spending time reading, studying and looking into systems information now.

  • BKXtoZERO

    I’ll guess Bobby’s answer…. put them on in size such that you can sleep.

  • Skynard

    May attempt one later after taking out today’s high.

  • mugabe

    Apart from the wealth of info here, you might want to check out Howard Bandy – YouTube, his books (Amazon), etc. Not light stuff, but good if you’re serious.

  • BKXtoZERO

    as a recovered dyed in the wool bear, knocking on resistance 3 times like this generally resolves for the bulls. For it to even be here this many times is not bearish. It may be a feat of engineering but not bearish. This is where I used to say “something is wrong with the bear count and I KNOW it doesn’t look good, but I would stay anyway because I was an idiot.

  • hellbent

    Monkeys have been at it again

  • Kevin Mcdonald

    Does anyone know what the up to date NSL for the ES is on the daily and weekly time frames?

  • OJuice

    Thank you for the reply.

  • ridingwaves

    if it breaks thru its good to go..1980 is where I would off load and if it overshoots so be it, I can jump in on long for some point if it breaches your 1995+

    funny thing is it’s all hinged on a fed decision to move off 0 to .25….its comical beyond words…

    by the looks of today I would say are overlords might just do as BobbyLow quoted a couple threads back….

    SASS vertical slowing down in bay area, nation

  • Scott Phillips

    This is very interesting. Thank you for posting, its from one of the people I have a lot of respect for also.

  • Scott Phillips

    That is a truly awful feeling, I’ve done it many times 🙁

  • ridingwaves

    http://www.oaktreecapital.com/MemoTree/It's%20Not%20Easy.pdf

    Good read with hints about psyche..maybe not pertinent to day trading though

  • Scott Phillips

    One thing that is difficult to take into account is that market type has demonstrably changed in the last few months from the market of the last 5 years.

    So while what you are saying is absolutely correct in a low volatility environment, there is no guarantee it holds in the new market we have today.

    What do we know about high volatility markets? We are in either

    a) About to start a blow off top to the upside (low probability outcome which would by definition cause a bigger move) This would likely be a last gasp of the bull market.

    b) We are in a high volatility sideways market and will vacuum up extremely quickly to overhead supply resistance, before sucking in the breakout buying bulls and fucking them in the ass, before repeating the process with the bears with a last gasp stick save. It has to be said, this has a certain elegance about it, would fuck the greatest number of participants, and therefore is the highest probability outcome. Lesson – the highest probability outcome will always fuck over as many traders as possible, this is the nature of markets.

    c) It’s finally bear porn time! Could happen, and it is a SIGNIFICANT possibility for the first time since 2011. In my opinion a lower probability than option b), but still there.

    So bottom line, do we have betting odds? We have betting odds on ONE THING – a major tradeable move is coming. We know this because volatility by every measure (especially by the near prescient Darth Mole) is at historic lows. Direction is unknown. Because 2 of the 3 realistic probabilities are to the upside, the upside has a slight edge, but we are talking 55/45, not 60/40.

    In my opinion this is right on the borderline of tradeable. There are better setups and easier trades. For what it’s worth I’m short ZB and quite unsatisfyingly short es and simultaneously long nq (which means I’m effectively hedged)

  • newbfxtrader
  • Billabong

    Excellent piece (pgs 1-6) on investor first vs second level thinking.

  • Billabong

    Red herring alert … last night oil draw at Cushing announcement. Senate / HoR is getting ready to vote on lifting of US oil sale ban. If enacted, it will impact Brent and WTI spread (currently around $3).

  • https://evilspeculator.com molecool

    1927.5 on the daily – none on the weekly.

  • Skynard

    Got the /DX backtest, kind of looks like bulls could attempt to get back on it.

  • MK Ultra

    “history tells me to take my money and run…..”, more importantly friend, what does your SYSTEM tell you to do?

    ex nihilo nihil fit