Evil Speculator 2.0

Grab a cup of java or your favorite tea – this is going to be a long one.

I haven’t done a Sunday forecast for quite a while now and the good news is that I am hereby resurrecting this apparently much appreciated weekly tradition. But more importantly, this post also represents the beginning of a new chapter, a change in approach for anyone who regularly frequents my digital den of market domination. One that may prove to be more fun, more satisfying, less noisy, and in the end hopefully more prosperous for all of us dare devils who insist on partaking in the virtual pandemonium that is the financial markets.

Let me take a step back and explain what happened about ten days ago when I decided to pull the plug on Evil Speculator 1.0. Although the act of using the nuclear option created a bit of an uproar (and a bit of ridicule) throughout the financial blogosphere let me assure you that it was absolutely necessary and that I am now more convinced than ever that I was doing the right thing by shutting things down for a while. Call it an act of ‘satori’ (look it up) aimed to push everyone out of their rut and to clear the way for something new. Or in more Western terms: I needed some time to think.

The simple truth of the matter is that I personally did not see any benefit in doing what I had been doing for the past few months. Similarly I had the strong impression that we all were involved in a daily habitual ritual which yielded very little benefit to any single participant – myself included. It was repetitive, it was unsatisfying and getting up in the morning felt like a scene right out of Groundhog Day. As a matter of fact, it had come to the point where I thought that participation in this trading blog may actually be counter productive to placing good trades.

Wow – that is harsh, you may think. But I love this blog and I really believe it has made me a better trader, you may say. Yes, maybe – but I’m not one of those other bloggers and being the ruthless, short tempered (according to T.K.) and greedy megalomaniac that I am, my definition of market domination is not getting your ass kicked on regular occasion. For me ‘winning’ means being on the right side of the tape as often as humanly possible. Plus I also believe that participation in any online forum should increase my trading edge in direct proportion to the time I spend there. No ifs and no buts. So, if I show up and see a majority of the posters gasping that the tape is crawling up yet again then I can’t help but ask myself if I’m doing a good job here and why we weren’t at least partially exposed to the long side (or the short side if the trend changes). No ifs and no buts – the market is a zero sum game.

Had I been consistently wrong in my daily analysis? Actually no – admittedly Evil Speculator is known to have a bit of a bearish tilt, but I was able to call market tops and bottoms quite consistently. And if you are a regular visitor you probably remember that I have been warning you guys of impending bear traps on several occasions throughout this incredible market melt-up (sounds like a cheesy 50s movie) of the past year. Maybe this is due to my eclectic mix of indicators paired with a bit of instinct and a dash of good old fashioned paranoia. Whatever it is – when it comes to riding out this rally I’m not too unhappy about my record.

But unfortunately the truth is not that simple and I personally am determined to not accept the above as the standard of service for Evil Speculator. Quite simply – in my mind what I have been delivering has not been good enough – period. Many of you guys have suffered great losses in the past few months and although I cannot possibly be blamed for that and you all own your trades I feel that I could have done a much better job in perhaps guiding you in the right direction. Obviously I have produced a series of tools that works very well – no matter which way the tape swings. But I have done a horrible job educating and perhaps marketing these tools. Because of that many of you have wandered off to (supposedly) greener pastures, just to find the very same drill just in a different wrapping/format.

Some of my own failing might have been a bit of bearish disposition on my part. But in my defense – all that time I continued working feverishly on several trading tools which are completely trend agnostic. As matter of fact Geronimo only takes long trades – so take that if you think that I have any bias or preference as to which way the market swings. But long term I have been a bear – and I’m very comfortable saying that. At the same time, when it comes to trading anyone’s long term bias really should not matter, right? As even the noobs know that nothing moves in only one direction for very long. Case in point: Even the recent green March spurt just hit a wall late last week.

But the ugly truth of the matter, I believe, is completely independent of market gyrations and trend patterns – the real meat is in the format. I have now come to believe that the traditional format of trading blogs does not lend itself very well to long term success of its participants. On one hand you have free blogs that offer voluntary information of varying quality and frequency. Then you have a lesser number of pay-2-play blogs which are basically walled garden monkey spheres in which regular information is presented to a paying audience.

What Everyone Knows Is Not Worth Knowing

The free blogs are limited by the fact that the information is sporadic and presented on a volunteer basis – thus inherently over time they cannot consistently produce the level of analysis necessary to ensure consistent trading result. Or in simpler terms: Nobody hands out high quality trading tips for free, at least not for any extended measure of time (case in point: HOB or OA). Hence, sooner or later free blogs either wither and die or convert into some kind of pay-2-pay format which then kills off 80%-90% of the audience. SOH is the rare exception, due to fact that the Slope is a great marketing tool for selling Prophet charts.

The pay-2-play blogs usually accumulate a certain audience, often due to a conversion from free to a subscription format, and then stagnate near that point despite common marketing efforts like trial weeks or special deals of any sort. Quite obviously if you followed Geronimo for only one week you would probably learn very little about how it works and whether or not it’s consistent and profitable in the long term. Profit graphs can tell you that in a matter of seconds – assuming you trust them and are confident in your ability to consistently take every single trade. The main problem with pay-2-play sites is that it’s extremely difficult to expand your audience. Plus everything you do is now inherently secretive which is completely orthogonal to the free-4-all nature of the blogosphere. Hey, information wants to be free, man! Diggin’ it! 😉

This is actually a rope walk that Evil Speculator has been battling with in the past year. As soon as I started to introduce various subscription services I had to repeatedly remind everyone to refrain from disclosing pertinent trades or charts – at least during the daily trading session. Well, the problem in that is that debating your trades and charts after the fact only offers limited benefit. It’s great to know when/where/how you screwed up but wouldn’t it be nice to know that beforehand? Plus – using the Zero as an example – wouldn’t it be nice to engage other subscribers so that one is able to compare notes, debate divergences, discuss signal strength, turning points, etc.? But that would require a member’s only section, right? And if it’s member’s only – how can non-members learn and potentially become interested in participating and eventually subscribing themselves? The old chicken/egg problem.

Evil Speculator 2.0

A possible solution to that is a hybrid approach which I have implemented into Evil Speculator. I have now several options as to how I can slice and dice my posts. First up I can restrict a post to members of a particular subscription. For example I can put up a ‘Club Zero’ post and you’ll only be able to see anything but a short intro if you are logged in and your subscription is active (i.e. paid for and you’re not expired). This enables subscribers of a particular product to speak their mind and engage in an exchange of information and trading tips – just what this whole Internet thingy was supposed to be useful for. But it doesn’t end there – what this also allows me to do is to restrict a post and its discussion during the session but then open it up right after, for everyone’s benefit. It’s like Soviet Russia without the vodka and cold winters. Quite nice I might add and I think this will make things a lot more interesting for everyone – paid subscribers and freeloaders alike. If you don’t care about any of the subscription services then just stick with the prior post as everyone else will hang out there and continue to discuss their trades.

Another way of restricting posts is that I now can actually add ‘segments’ in a post that only subscribers can see. For instance I could tack on a little UPDATE as I sometimes do but it will only be visible to Geronimo subs as it discusses pertinent thoughts and probably some mental masturbation on my part. Unless you’re logged in you won’t even know it’s there but you still will be able to see the rest of the post. Pretty neat – ain’t it?

Maybe we can have our cake and it too after all. I have not figured it out completely yet but I believe this is a great step forward plus I am confident that this hybrid approach is not only a good compromise between the dynamics of a free and a pay-2-play trading blog but that it will also produce a whole multi tiered approach of how you guys can get involved and make this place your own.

Mole 2.0

But format alone is not everything and there will also be a complete shift in approach here, driven mainly by myself. Going forward I will no longer engage in postulating about what henceforth shall be known as ‘market politics’ – there is even a new category. If I do I will label a post as such and everyone reading it should keep in mind that nothing in that post should affect one’s trading portfolio. This renewed focus on relevant data only will also spill into the comment section – as a matter of fact it is a must if you all are here to bank coin and not to bitch about the inner workings of either Wall Street and Washington. But why, you may ask, isn’t part of the fun of blogging to complain about Bernanke’s helicopter or Goldman Sachs’ prop desk monkeys? Well, maybe – but it’s also incredibly unproductive as it has zero value when trading the markets – as a matter of fact it is completely counter productive.

Listen guys – I am not Karl Denninger. First I am not half as smart as he is but at the same time I’m also only half as angry. I’m also not Tyler Durden, for very similar reasons – but multiply my equation by a factor of at least two – he and his crew are the smartest cats in the financial blogosphere. But something you also ought to ask yourself is this: How much of the stuff you read there really has helped your daily trading? In retrospect – did Karl’s, Tyler’s, or even Mole’s musings lead you into going long in March of 2009 and to ride the tape up all the way? That’s right – none of us knew how far this rabbit hole would go – and for all we know it might not be done yet.

Similarly – how many of the thousands of comments you absorbed on this and other trading blogs were of actual benefit to you? Do you really enjoy skipping dozens of ‘how are you, sweety?’ and ‘look at this pic of Geitner in drags!’ comments before seeing a contribution that might actually be trading related? And even if it trading related – does it work for your system? Well, I can’t do much about the latter as it’s a complex subject and you simply can’t get everyone to place discretionary trades on the same terms. But I definitely can do something about the noise and the postulating.

I myself will focus exclusively on trading going forward and weed out pretty much everything else. Not that I will be deleting comments (unless they are abusive or plain old trolling) but I will discourage them. On the content side there will be wave count updates but for slightly different motivations than what I have presented in the past year or so. A big lesson I have learned is that calling major market tops/bottoms with only EWT counts is an exercise in futility. The reason why I have fared a lot better than for instance Hochberg is that I use other measures, some of which have been extremely accurate. So why not use those instead? Where EWT has a lot of value IMNSHO is in estimating a trend’s length and strength once it’s validity has been established – which in itself is a very valuable piece of information. Especially if you are a trend trader. However you might criticize that EWT was unable to predict the extent of this Primary {2} retracement. Yes – that may be correct – but at least we knew that DOW 10,000 was a probability – if you doubt that then check my posts from early March of that year 😉

Another practice I am going to resurrect is that of picking discretionary trades again and posting them to Evil Speculator Gold subscribers (more about that below). I also encourage you guys to email me setups if you can back them up with decent TA. I would actually like to invite one or two experienced guest posters to help me out on that front as I can’t possibly do everything myself. After all I have subs to support and trading strategies to hone on a constant basis.

Introducing Evil Speculator Gold

Finally I will start posting my weekly Sunday updates again – they will contain a flurry of charts and my personal musings on the short and medium term trend – you could call my weekly newsletter. It will contain everything you need to know in order to go out there and bank coin. I will only post what I deem to be informative so the post could be 200 words or 2000 – it all depends on what’s going on. Although these posts will be available to everyone starting Monday a few hours after the bell, they will be available to Evil Speculator Gold subscribers exclusively any time before that (probably starting late afternoon on Sunday if you’re on the East Coast).

In addition I may also choose to post ideas for discretionary trades (T.K. style) in a similar fashion. Meaning they will be available to Gold members immediately as I post them during the trading session and to anyone else after the bell rings. In case you wonder – the monthly fee for Evil Speculator Gold will be $29.-, which I find is extremely fair (and you can sign up for it right now). You all have been clamoring for a way to ‘support the blog’ when none of the other subscription packages fit your trading style – well, here it is. Why not $19.99 or $9.99? Because quite frankly – if you’re that cheap then quite obviously this blog is of little value to you and you may be better off going somewhere else. And if you’re some poor college student – well, then you shouldn’t be trading your college fund anyway and getting the info a few hours delayed is not a problem.

Some will hate Evil Speculator 2.0, others will love it, and some of you will find that it hasn’t changed very much from what you have come to know and appreciate (or love to hate). But I think everyone who comes here will be able to define his/her respective involvement and we all will be able to take away only what is needed to succeed. That why we are here in the first place, right? To bank coin. The rest is just window dressing. But if you’re the social type and enjoy chatting then it’s here for you as it’s always has been.

BTW, in case you wonder – no charts today. I just spent four hours writing this and need a break. I promise to put up some charts describing my perspective regarding the short/medium trend throughout Monday and Tuesday. I thought it was more important for me to explain my position and to make sure everyone understands what I’m trying to do here. Hey, maybe you have an idea about a new section here or a slightly different format you would like to see. If so (or if you just like to bitch) don’t be shy and write me to admin at evilspeculator dot com.

Cheers,

Mole

P.S.: In case you wondered – yes – Mole 2.0 will be 30% more evil and 25% more sarcastic than his predecessor 😉

UPDATE: I forgot to mention this above – but anyone subscribed to any of the primary services (i.e. Zero or Geronimo) will have access to any Gold post.