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E-Mini Epiphany
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E-Mini Epiphany

by The MoleAugust 20, 2018

Seeing the E-Mini in the green after holding it over the weekend is definitely a good way to start your Monday and I strongly recommend it. What’s more important however is a little epiphany I had this morning when I was staring at the E-Mini’s volatility panel. The indicator I use is something I hacked up a few years ago but I could never really find out how to turn it into a system. Until today that is.

On the lower panel you see DarthMole which is my genetically enhanced version of the RSI – it basically measures RV swings above the upper and lower Bollinger. When I wrote it I was fascinated about its ability to predict directional swings, but at the same time I also realized that sometimes the trend would roll all over the signal.

The way I think I solved this was to use two concurrent indicators – one measuring the swings > the upper BB (yellow) and the other swings < the lower BB (cyan). In addition to that I am also using a simple SMA that ensures that only MR extremes are being considered, meaning only short campaigns > the SMA and long campaigns < the SMA. In addition to that I think candle breaches may add a bit more of an edge, but that remains to be tested.

Alright I already know what you’re thinking: Hey this is rather obvious, what’s the big deal, Mole? Well, thing is that simple solutions often look trivial in hindsight but coming up with them is not. That said, I don’t think this is the holy grail and that it probably needs a bit of work.

If I find some time I’m going to run the stats on this sucker and throw in some additional alpha factors, e.g. the frogbox on the VIX, or perhaps even the IVTS. But on the surface this looks like a pretty nifty swing trading system on the E-Mini. Feel free to share your thoughts/ideas in the comment section so that we all benefit.

Speaking of the E-mini – I now advanced my stop to break/even. Easy does it here as intra-day realized volatility (RV) is once again in the process of expanding.

So gold is looking like a possible long campaign but as you all know by now, just because it’s flagging a possible ST floor pattern doesn’t mean we automatically consider a long position.

In fact both the weekly and monthly panels look like they’re about to start trending lower. Unless of course those lower BB can be recovered. Which it might of course.

The ultimate decider in my mind can be found on the forex side. Please step into my lair for more perspectives on this, plus we have new setups:

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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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  • Edgy

    Morning! I’m on nights in Mexico this week and next. It’s going to be tough to not watch this tape when I should be sleeping, but I keep looking at how ES is getting close to all time highs again.
    Recent moves seem a bit rushed, so maybe more whip in the 2820-2870 range? Maybe just a breakthrough? Should be interesting. Laters!

  • Edgy

    BTW Mole, you see anything about “balconing” in Spain?

  • Julie 35 – 25 – 36

    GDX Possible panic sell down to a major support Shown weekly chart JULIE https://uploads.disquscdn.com/images/a3ad30ec380f1d3e8bcffda691a2201060ab1a7e315e8f924e7560b4435fae97.png

  • StockTalker

    Dollar turn now on fake out H&S, held short over WE as well. Seasonal bear time.

  • Darkthirty

    Had a set up awhile back, based on 4 indicators, that I couldn’t find anyone to automate. The provider bastardized the charts, and I can get close, but not dead on………

  • Julie 35 – 25 – 36

    D30 SPX Friday’s selloff into the close coupled with today’s gap up being sold into Well hanging in there on the short from Thursday.
    JULIE

  • Julie 35 – 25 – 36

    BAC Targets 30.97 and 31.02
    JULIE

  • https://evilspeculator.com Sir Mole III

    GUTEN MORGEN!

  • Julie 35 – 25 – 36

    Good Morning to you also Chief. Going to be an interesting week Chief
    JULIE

  • https://evilspeculator.com Sir Mole III

    Jumping into the pool from a balcony? F…ing stupid risk to take for a cheap thrill. Darwinism at work.

  • https://evilspeculator.com Sir Mole III

    INDEED

  • Darkthirty
  • Yoda

    Guten Abend !

  • Julie 35 – 25 – 36

    SPX The three topping tails on the island. Can’t wait to see a possible retest. RSI above 50 ; MACD now above signal line and STOCHS turning up at 50 gives the nod to the bulls stated previously BUT …… ! OPEX now over ! Sellers step in and …… !
    JULIE

  • Darkthirty

    Normal, in Indiana, we call Chicagoans FISH…fukkin Illinois shit heads, and they reciprocate

  • ridingwaves

    interesting to note that small specs are short gold for first time since 2001……

  • Julie 35 – 25 – 36

    SPX Right at approx 78% retracement. Bulls gotta step up to the plate. As stated below this morning’s gap up sold into and Friday’s selloff into the close. Julie hanging in on Thursday’s short
    JULIE

  • Julie 35 – 25 – 36

    RW That be the “Dumb Money” Good eye RW as I have been following the COT also
    JULIE

  • Julie 35 – 25 – 36

    RW Watching EXAS closely Needs a bullish close above 5 ema at 48.85 which the 5 ema has been a strong resistance Now retesting the August 2 low Just saying RW
    JULIE

  • ridingwaves

    seems it has picked up a lot of detractors and shorts….at some point, biotech is going to signal the blow off top is here and it will lead way…..seasonality starting to come into play…..

  • Yoda

    LMT is getting some well deserved PR through their twitter account.

  • Julie 35 – 25 – 36

    Real battle between the Bulls and Bears with both taking some hard lumps the last two weeks. Beating each other up.IMO Correction coming
    JULIE

  • Julie 35 – 25 – 36

    Must get some work done See everyone at break time and lunch
    JULIE

  • Julie 35 – 25 – 36

    BAC Today’s high 30.92 5 cents short of one of my targets listed below 30.97 and pulling back YEAH !
    JULIE

  • bankwalker

    good PR or bad PR?

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

    most excellent.. burrrrn.
    nothing like a sub-rsi 30 to release fear!
    https://uploads.disquscdn.com/images/ad34aff7735ff86a4e5371389260d9f13baab64c8ea97d896e66e1d3bfbfcca2.png

  • Julie 35 – 25 – 36

    SPX Bulls “Gasp” “Gasp” “Gasp” “Choke” “Choke” “Choke”
    JULIE

  • Julie 35 – 25 – 36

    Good Morning GG ! INTC LOL !
    JULIE

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

    GDX has herniated. (it’s out side the envelope)
    getting back in could take some time.

    https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=0&dy=0&id=p61821202254

  • Ronebadger

    I got your 1HR ES chart with plenty of lines for y’all. 5 point touch ascending wedge, resistance, etc.

    https://uploads.disquscdn.com/images/2112066148e57686dcba09468073f18d521474ec6105ccfad56eccf6135d306d.png

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

    Love them Bear Flags esp BAC ! XLF filling the gap and pulling BACK ! BACK ! BACK ! BACK ! Bears turn at the feeding trough !
    JULIE

  • Julie 35 – 25 – 36

    GG LOL ! Could not happen to a better Corporation !
    JULIE

  • Yoda

    See 4 urself

  • StockTalker

    Crude oil to the sharks, down she goes.

  • Julie 35 – 25 – 36

    ST Checkout Housing XHB Bearish chart Daily chart 5 – 21 and 55 ema’s bearish alignment Not Good !
    JULIE

  • Julie 35 – 25 – 36

    Bears we must watch Small caps $RUT closely Chart Pattern a bullish ascending triangle and today a bounce off it’s 5 ema Just Saying
    JULIE

  • HD

    Kudos on the epiphany Mole. Looks like a solid RSI system.

  • HD

    Wednesday we have FOMC minutes and trade war meeting. China appears to be near the conclusion of its bear wave and SPX appears near the conclusion of a bull wave.
    Just optics.
    https://uploads.disquscdn.com/images/f442e4917d7fbbd79643492480713c9f84e86e99f20f1aca06b58faeb6a06383.png

  • HD

    Someday I’ll share my experience w a mechanical system. Worked great for a few months. Need to wrap the entire house in foil again first.

  • Mark Shinnick

    Optics are so interesting…as through inviting mechanically-reflexive contrarian viewpoints.

  • HD

    Agree. Charts are definitive though.

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

    What is it about those charts that indicate that their ‘waves’ are near their conclusion?

  • StockTalker

    Watch /NKD and /NQ, they will lead.

  • HD

    That 1 chart doesn’t have much to show other than the YTD Trendline. Zoom out and SSEC has been in a 10 year correction. SPX has been in a 10 year bull market. They can rally together. Just an interesting junction with the trade war in the equation.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • https://evilspeculator.com Sir Mole III

    You tell me…

  • Julie 35 – 25 – 36

    SPX I shorted on Thursday approx 2850 almost nailing the top at the gap failure. Down approx 9 pts with a small position. GVIP “hedgies” not as bullish as a chart.The slow grind up SPX is not confirmed by the hedgies
    JULIE

  • bankwalker

    I see nothing to indicate a change of the trend.

  • Yoda

    Negative divergence on 5 min zero is a beauty today. Tape has zero mojo. https://uploads.disquscdn.com/images/8a184dde3949ba8827a341bf6e761cf1fa76fd2b34ad4177cf4aa0012bc5252b.jpg

  • bankwalker

    I am seeing signs of a reversal on YM, ES, NQ, and RTY 30 minute charts Julie. No confirmation yet.

  • StockTalker

    /DX looking corrective from here. shorted the Euro

  • randomuser6789

    Crude making a little comeback.
    https://www.youtube.com/watch?v=uBxMPqxJGqI

  • Ronebadger

    SPY volume is extremely low…even for a Monday in the Summer

  • Julie 35 – 25 – 36

    RB There should have been more volume on Friday with OPEX expiration. The grind up not confirmed IMO Thanks for your comment
    JULIE

  • Julie 35 – 25 – 36

    Thanks Yoda
    JULIE

  • Julie 35 – 25 – 36

    Thanks BW
    JULIE

  • Ronebadger

    It seems to be just floating up…no umphh behind it. Zero seems to confirm

  • Julie 35 – 25 – 36

    Oil and Housing not doing well and Major Banks pulling back with bear flags
    JULIE

  • bankwalker

    Still no confirmation … It just seems like it doesn’t want to go down.

  • Yoda

    I see a steady walk down on DX

  • Julie 35 – 25 – 36

    Actually few buyers BUT no sellers. When selling kicks in could get ugly in a hurry !
    JULIE

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

    Waiting for more downside…

  • Julie 35 – 25 – 36

    GG GLD looks like a bullish close above it’s 5 ema
    JULIE

  • HD

    SPX. Almost +10 handles. BOTs. 2863 still my threshold

  • Yoda

    that’s right

  • HD

    Was not pointing to any trend change. **near conclusion

    Let’s revisit in a few months.

  • HD

    /DX still contained by HWB presented on 8/8 dollar glass ceiling.

  • HD

    470 SPX companies have reported, beat. No HH yet …

    Interpret as you see fit.

  • Julie 35 – 25 – 36

    HD The reaction to positive earnings has been tepid
    JULIE

  • HD

    Agree. Something like best earnings in 5 years?

  • Julie 35 – 25 – 36

    Yes
    JULIE

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

    I’ll take it. a toe hold for now.
    The ratio needs to get above the red line, to declare this downtrend over.

    https://stockcharts.com/h-sc/ui?s=GLD%3AUUP&p=D&yr=1&mn=6&dy=0&id=p15046224099

  • Julie 35 – 25 – 36

    SPX This dump at the close could have negative consequences tomorrow
    JULIE

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

    anybody can beat, it’s keeping the top line, revenue that can’t be lied about

  • Julie 35 – 25 – 36

    Like the chart GG Thanks !
    JULIE

  • Edgy

    Yeah, that’s why I asked. But I figured we’re not supposed to mention ZH here. 😉

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

    many bothans died to bring us this information

  • HD

    That sounds legit. I’m no economist but by my math SPX still has 132 more companies to report. 🙂

  • Julie 35 – 25 – 36

    Back to work Everyone have A Great Rest Of Day !
    JULIE

  • Edgy

    Looks like my fat range on ES was too much too soon for today. Let me just zoom those charts back in…

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

    economists carry no weight in these parts.

    https://www.nytimes.com/2009/09/06/magazine/06Economic-t.html
    trade the tape.
    😉

  • HD

    The failing NYTimes? No way amigo. Fake news for sure.

  • randomuser6789

    8/9 and 8/20 had the lowest and 2nd lowest volumes on SPY all year. You have to go back to 24Aug2017 to see lower volume on SPY.
    Not a whole lot of mojo thrown at the overhead resistance today.
    But we could still gap over tomorrow.
    Or drop like a stone.
    Or neither.

  • Darkthirty

    Yup, not smart enough to sort the wheat from the chaff…………..

  • HD

    Another 17 handle gap on deck?

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

    I think the old rule is knock 2 times before entering, 2 failed new highs, 3rd time a charm, lots of shorts set above for double top, now time to blow them out with breakout and tears…..