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Dis Gon’ Be Good

Dis Gon’ Be Good

by The MoleMay 2, 2019

I’ve born witness to quite a bit of monkey business in the financial markets over the years, but yesterday’s price action completely blew my mind. And I honestly have to appreciate the deviousness of it all. Well done! Chapeau! Now just think about this for a moment – consider what just happened here: The very day the SPX finally scrapes new all time highs (2954.13) anyone holding long positions is immediately slapped by a nasty u-turn followed by a 20 handle drop. I can literally see the bears salivating at the prospect of a massive double top entry opportunity.

And here it is in all its glory – after years and years of incessant suffering, there finally is a moment of catharsis: The coveted double top formation an entire generation of perma-bears has been dreaming of. And all I can think of is:

Dis gon’ be good!

The only conceivable play for me right now is to do what hurts and scared me the most, which of course is a long entry. Unless of course you have God whispering in your ear and thus took out a short position near the highs yesterday. If that were me – and unfortunately it’s not – then I’d do absolutely nothing right now.

The odds of continuation lower are pretty damn high today and tomorrow but it’s not an entry I can make after such a slide. My only available option is to be long until proven wrong which will happen below ES 2915. But for good measure I’ve put my ISL < 2912.5.

Should I be stopped out – and again the odds are high for this to happen – then I’d probably wait for a weak and indecisive snap back before delving into short positions. Of course the Zero would have to be supportive to the bearish side of course. We are talking a bearish divergence that suggests a short squeeze.

Speaking of which – that down signal on the hourly panel (very left) must not be underestimated. Selling pressure was real near the end of yesterday’s session and it would be unusual to not see more follow up in the next two sessions.

So just to be crystal clear, my long position is a lottery ticket and should only be taken with very small position sizing, e.g. 0.5% of your assets or less.

Happy hunting!

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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