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Eye Of The Storm
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Eye Of The Storm

by The MoleMay 31, 2018

On Tuesday I hinted that the then ongoing sell off may be nothing but another low participation post holiday bear trap. And sure enough, my skepticism was rewarded by a massive short squeeze that spanned the entire session yesterday. Proving once again that just because you’re paranoid doesn’t mean they’re not out to get you!

I saw some of you Zero subs chat about a ‘bearish signal divergence’ and if by any chance you felt a burning sensation in your cheeks then it was me using black Mole magic to virtually slap you a little for completely misreading the signal.

A session that starts with a positive signal which only builds and only dips lower marginally without retesting VWAP is not a day when you should be looking at contrarian entries. Cross session divergences are only valid on the hourly panel (left side) and if they are pronounced. Right now I don’t see anything pointing lower, so curb your bearish enthusiasm.

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Okay, moving on – per the title of this post I wanted to employ some simple tape reading skills to help us navigate this treacherous period in equities. Clearly we are now back in the eye of the storm of what henceforth shall be know as the ‘Six Months Of Hell’. When we come out of it – who knows and I may have to change it to seven or eight unless the bulls finally get their act together.

What works in the bulls’ favor however are two things, again from a pure price perspective:

  • The churn zone above the center line (also remarked by the 100-day SMA) is clearly a lot more compressed than the zone below it, and thus should be much easier to overcome on a push higher.
  • Looking at the candle action almost all of the big wicks pertain to the bearish side, indicating that the bulls are increasingly willing to defend key levels. That alone has produced a ton of technical context that make a drive lower more challenging.

Of course none of this guarantees a move higher which is why I’m currently holding off on long positions after not being able to take advantage fast enough after Tuesday’s lows.

For all you leeches I have two setups today which however really boils down to one. As you know I’ve looking for an excuse to get long gold and I decided to grab a long position now that it finally rolled over into the August contract.

As you probably also recall however the Yen is once again starting to look bearish (and thus the Dollar/Yen bullish). And that perspective probably runs inverse to a bounce in precious metals. Short of having a crystal ball at my disposal I have thus decided to also short the Yen by going long the USD/JPY assuming it’s able to heave itself > 109.12, breaking the series of lower highs and lower lows.

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

    I see that you switched to hypnotic technical analysis.

  • Mark Shinnick

    Its a Variation Julie all his own ? One thing for sure here, this is a perfect environment to confound and confuse.

  • BobbyLow

    He needs to have some “Twilight Zone” music playing with that one.

    https://www.youtube.com/watch?v=XVSRm80WzZk

  • HD

    1/2 off +15

  • HD

    Same level. The other way to think of yesterdays squeeze… EOM window lickers. What a gift.
    https://uploads.disquscdn.com/images/6724db43dde7d5cddebaad85a59932c5257aa7f43c9d12b151859706f63a78bf.png

  • Mark Shinnick

    Yeah…been tracking you on this because the transitional appearance of everything else is consistent.

  • HD

    SPX May O 2643, H 2742, L 2595 C ____ ?

  • HD
  • HD

    nice! scene of the crime, price and TIME

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

    $SOX may be strong, but Micron?
    Ha! Headlines be damned.

  • Mark Shinnick

    Yeah, from a trading art POV, that’s true.

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

    shhhhhh! be bery quiet, we huntings us some wabbits….

  • ridingwaves

    really beginning to think a big house was on the wrong side of bond trade and everything going on with italy, tarriffs has made them whole at the end of the month…

  • HD

    great trade RW!

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

    INTC Candle addition WOW A high wave candle Mass confusion CAT Yes on remaining 1/3 short approaching my target. GLD a nice consolidation with 1/3 long position
    JULIE

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

    CAT is on the ropes IMHO.
    http://stockcharts.com/h-sc/ui?s=CAT&p=D&yr=0&mn=6&dy=0&id=p13441344299
    RSI 50 is a tricky spot.

  • Julie 35 – 25 – 36

    RW Nice short TSLA Really bearish below 284.21 which is Ichi Cloud conversion line (8)
    JULIE

  • ridingwaves

    good to be lucky…

  • Julie 35 – 25 – 36

    GG You hit the jackpot WMT several days ago. No follow thru from yesterday and failing at it’s declining 21 ema. Nice call GG
    JULIE

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

    poor man’s index.
    2 & 20 baby. 2 & TWENTY.
    😉

  • Julie 35 – 25 – 36

    Disagree RW You planned the trade and traded the plan. Not luck at all Bro
    JULIE

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

    GG As stated previous thread MU a possible double top BUT IMO a cup with handle possible too. Let’s watch the gap matching the 21 ema approx 56 and the Ichi Cloud baseline (21) at 55. If it pulls back light volume and momentum we could have our handle If heavy selling volume and momentum then we short the next lower high. GG we plan the trade and trade the plan. Either way we let it come to us. No hurry
    JULIE

  • ridingwaves

    Madrigal Pharmaceuticals, Inc. (MDGL)
    255.9866+147.5566 (+136.08%)
    As of 11:55AM EDT
    1000 shares yesterday made you 148K today

  • Julie 35 – 25 – 36

    GG MU could go down to 54 matching the rising 55 ema ; upper cloud boundary and support. Remember the upper and lower cloud acts as a magnet JULIE https://uploads.disquscdn.com/images/b7a63abe4f5d16da5fb375eeb545f9e2bbd22fb11e92fb695ea35166e9c72933.png

  • Mark Shinnick

    Technically, how could anyone see that coming?

  • Julie 35 – 25 – 36

    BAC Minor triangulation for another pop lower. 27 – 28 target JULIE https://uploads.disquscdn.com/images/7f54cdfd58f1eb42b96e873184105893f3e1420fc9151f341d7c4fc6717e6609.png

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

    USO IMO not the bounce to go long. Previous chart looking at approx 13 then a bounce to a lower high for those who missed the short or re short If it is the bounce as the MACD possibly indicates then up to a lower high. Either way is a win IMO https://uploads.disquscdn.com/images/b2df012e1a178cca813deae63c09dd91b0463464774d27d73ca710145ff7245b.png JULIE

  • ridingwaves

    impossible….unless privy to results in study released. though you could have taken risk-gamble 2 days ago betting on good results, bad would have sent it back to 40’s though, I would short it now…still a long ways to go in the bio world….
    https://www.bloomberg.com/news/articles/2018-05-29/obesity-made-fatty-liver-drives-midcap-race-for-wonder-drug?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo

  • Tomcat

    Good plan Julie. You are on fire.

  • Julie 35 – 25 – 36

    SPX Stochastic indicates No man’s Land If it goes down to approx 2663 and bounces I may go long. 2663 would be a backtest of a broken down trend line and approx mid point of triangle for the E leg of triangle which often occurs for the E leg. Until then I do nothing SPX. Breaking below the daily 55 ema on chart would give a bearish bias JULIE

  • Julie 35 – 25 – 36
  • Julie 35 – 25 – 36

    Thanks TC You have been on it too ! Everyone has been hitting !
    JULIE

  • HD

    Last June SPX only had a 40 point range. I doubt that’s what’s on deck.

  • Julie 35 – 25 – 36

    HD Are you still on board with the triangle i.e. possible E leg down or do you see something else ?
    JULIE

  • HD

    No risk in guessing. I’ll say 2689

  • BKXtoZERO

    Mole, Great post and classic bitch slapping Sir…. I brought a sharpened stick to a Ray Gun fight LOL. You haven’t quite achieved Scott level terror but very good post. Thanks for tape reading lesson, good stuff. Thanks for the precious metals tip too!

  • Julie 35 – 25 – 36
  • HD

    Short answer is yes. Triangle can still play out.

  • Julie 35 – 25 – 36

    Covering remaining CAT short at the 55 ema (small bounce) Not greedy. Now sitting back. Have 1/3 long GLD ( discussed previously with BL and TC possible decouple with the greenback) Also a small short probe INTC. Now very important as Deer in the Headlights Syndrome and missed the CSCO short that GG and I were watching. CSCO looking for the shortable bounce now Down to lower cloud boundary and the daily 89 ema. May go long the possible bounce from this level But needs a bullish close above it’s 5 ema approx 43.10 CSCO is setting up Guys JULIE

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

    strange dog. Beast of the DOW 30.
    QQQ’s strong, $SOX strong, and CSCO, decides to take two weeks off and go soft?
    bizarre in my book.

  • Julie 35 – 25 – 36

    GG There was a lot of Hype CSCO just like MU …. Both ripe for a pullback. Hype also INTC. When the Gurus and talking heads Bla Bla Bla … GG show our speciality again i.e. ship capsizing to one side Love that picture !
    JULIE

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

    baker brothers did….I know some players whom just ride their picks….

  • Julie 35 – 25 – 36

    GG I am sorry I did not mean it in that regard. Only depicting too many on one side of the boat. Heart goes out to victims and their families. Yes a moment of silence
    JULIE

  • Julie 35 – 25 – 36

    SEDG Same as CSCO Looking for a bounce confluence of the (1) rising 89 ema (2) lower trend line (3) 38.2% retracement JULIE https://uploads.disquscdn.com/images/a219d68f8cd874c982d311c009020bc79050285d38f655a873457cb4fc87e03a.png

  • Julie 35 – 25 – 36

    SEDG If not at this level (chart above) then the 50% retracement matching a support at approx 51
    JULIE

  • https://evilspeculator.com Sir Mole III

    “You haven’t quite achieved Scott level terror but very good post. ”

    HA – you obviously weren’t around in the early years. I’ve mellowed out a bit since 2008.

  • HD

    All flat 2701. IPA and donut time.

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

    I like your style (a little late for pastries don’t you think?)

    https://img.memecdn.com/mmmmm-donuts-and-boobs_fb_759944.jpg

  • Julie 35 – 25 – 36

    Guys Observe how GLD is holding it’s daily 5 ema in minor consolidation JULIE https://uploads.disquscdn.com/images/33bbe3893dbb5888ced02c45b4a4cc9ffe552d12066d8e42c62ade08b4096e6a.png

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

    Pluto is in transit, me thinks 121 is still in the cards.
    😉

  • Julie 35 – 25 – 36

    GG Very possible As GLD must get above 124 … Took profits earlier as we had 122 as a level for the bounce and i went in. Going to retain 1/3 long with a stop just below the gap
    JULIE

  • Tomcat

    Definitely sounds like a weird mix.

  • mSquare

    Appreciate the nice chart. I see $56-ish where it goes and fills the gap. Could bounce there or head lower like your suggestion on the chart.

    I think a bounce at $56s and selling short puts to go long stock around there

  • Tomcat

    Well done HD, well done

  • Mark Shinnick

    Generally, I’m short side equities here. Stop is pretty tight and I’m easily exited.

  • HD

    Thx amigo. It’s a day traders market. 5 months worth. Let’s hope it continues. Nicely defined SR levels.

  • Tomcat

    Gold is a short in my lens (although no position…yet). But if I thought PMs would get a bid, I would go with $PLAT which may be on the verge of a break of downtrend.
    http://schrts.co/naUST8

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

    ..out to lunch!
    -GG

  • Julie 35 – 25 – 36

    Guys You may want to contact Robinhood Securities. Zero commissions. I have two accounts one with Robinhood and the other with TD Ameritrade. TD Ameritrade honored my negotiated reduced commission when they took over Scottrade JULIEhttps://uploads.disquscdn.com/images/0cd881027a982cf7fdd84909526472af532a314276cb04722a4090a902cb5102.png

  • Julie 35 – 25 – 36
  • Julie 35 – 25 – 36

    I see it TC Thanks
    JULIE

  • Tomcat

    Julie, I would consider a L $PLAT and S $GLD as a hedge.

  • Julie 35 – 25 – 36

    TC My one of my husband’s favorite trades was SWC (Stillwater Mining) A palladium miner located in MT. SWC has merged or was bought out by some entity. Not sure who they are
    JULIE

  • Julie 35 – 25 – 36

    Ok TC Somewhere in my husband’s notes are charts on how to play platinum. I will look them up
    JULIE

  • BKXtoZERO

    I have been holding off too. Another leg down possible. I have been waiting for the Ride off into the sunset metals trade.

  • Julie 35 – 25 – 36

    TC and Everyone Found my husband’s notes on Platinum. He used the $PLAT:$GOLD ratio to play platinum and SWC JULIE https://uploads.disquscdn.com/images/e63f71d5033817c28abb54a39e7f12edcd6b97d80d2bdd63f1a7d123299f13ae.png

  • Tomcat

    What is SWC? If you look at the PLAT chart, there is divergence in the RSI.

  • HD

    I don’t think the hit is over. I’d like to reload a little higher if they let me. There has been divergence at every SR level. Not seen at 2700 yet. Could be just Gap support. Could also be simple symmetrical zig zag. https://uploads.disquscdn.com/images/be8d5514c9d793a8dae6902ff18f111532fbdf37a8aa4ea9a111e3dafd6c0081.png

  • Julie 35 – 25 – 36

    TC You are correct a breakout in the ratio above consolidation resistance and $Platinum is going to fly ! Guys we is gonna hit the jackpot $Platinum We just wait for the breakout ! Good call and eye TC
    JULIE

  • Julie 35 – 25 – 36

    TC SWC was Stillwater Mining A platinum palladium miner in Montana. Still in existence The only platinum and palladium miner in North America. Some large entity bought them out approx a year ago. Do not know who it is
    JULIE

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

    GG See it Thanks for the weekly GG
    JULIE

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

    ..not saying you can make some quick $$$.
    just don’t trade big piles of gold for platie, until 0.76 is crossed.
    🙂

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

    Payrolls & Unemployment tomorrow.

  • kim
  • kim

    anyone long eurusd?

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

    SPX The PMO possibly topped and MACD below it’s signal line. Stochs in No Man’s Land as stated in post below Breaks below the 21 and 55 ema’s and …… ! JULIE https://uploads.disquscdn.com/images/568e4d5ee814d67bb716745238c9fc1d1ac0f31e2cce3995b3849ac371b84873.png

  • Julie 35 – 25 – 36

    INTC Yeah ! MACD and Stochs rolling over …. Just need the bearish close below the 5 ema JULIE https://uploads.disquscdn.com/images/d279b04e447bfcbdd3d03a988e7a2a6ecb2860024cabe605f31faafbd8c6c82e.png

  • HD

    Sellers showed up right at fibs. BOTs

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

    Time Check!

    {yawn}

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

    histogram at zero point oh one?
    (look of uncertainty)

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

    “The ultimate parent of the Deutsche Bank Group, Deutsche Bank AG, is very well capitalized and has significant liquidity reserves.”

    (grin)

  • randomuser6789

    And the VIX Buy signal is not to be.

  • https://evilspeculator.com Sir Mole III

    Oh you actually expected escape out of this mess? Hope truly springs eternal! 😉

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • ds2

    Nope – it’s a SELL.

  • Julie 35 – 25 – 36

    INTC Yes ! Closes below it’s 5 ema in lower portion of daily range red candle with distributive volume
    JULIE

  • Julie 35 – 25 – 36

    INTC Breakout point failure… What I was watching for
    JULIE

  • BKXtoZERO
  • Mark Shinnick

    Yes…loved that one. Eat….we wouldn’t want you to lose weight 🙂

  • BKXtoZERO

    My namesake the BKX is setting up for it’s final target below the ichi cloud https://www.zerohedge.com/news/2018-05-31/bank-index-dangerous-place-be-kissing-resistance

  • BKXtoZERO

    He said step one to a BUY signal, I am sure he is fine

  • Julie 35 – 25 – 36

    Guys watching the $DAX You can see the stick save Weekly Chart. Went down to (1) Upper trend line (2) 38.2% retracement (3) price support (4) 144 weekly ema (not shown) What is shown is the 155 ema. Husband’s notes Price drops below the 155 ema and the 155 ema begins to turn down denotes a trend change in all time frames. NOW Very important a HEAD and SHOULDER Pattern developing on the $DAX JULIE

  • Julie 35 – 25 – 36
  • Julie 35 – 25 – 36

    Hi BK These are correct trend lines $BKX Weekly Chart $BKX back tested not one but two trend lines.The very reason I have initiated shorts on BAC as BAC mirrors $BKX JULIE https://uploads.disquscdn.com/images/57ce1beca3a637f46cbc90cc8234ca9a90ebd60dbeac6f79b8fb1662a4afc6cc.png

  • BKXtoZERO

    we shall see!

  • BKXtoZERO

    Hey Julie…. check out Andre Gratian who posts on Gold Eagle, let me know what you think. I like him.

  • Julie 35 – 25 – 36

    BK A book that my husband has author Vic Sperandio He gives a tutorial on the correct way to draw trend lines Excellent You might be able to look him up on the internet and find his comments on correct trend lines
    JULIE

  • Julie 35 – 25 – 36

    My husband and myself concur that he is excellent. I learned to draw trend lines on indicators from Gratian and my husband
    JULIE

  • BKXtoZERO
  • BKXtoZERO

    He has been my ace in the hole on this whole end of May low thing. I never blindly follow just because someone says XY or Z, but I traded set ups with that intention WHILE protecting myself. He says ES 3K next

  • Julie 35 – 25 – 36

    LOL! Vic Sperando not Sperandio LOL !
    JULIE

  • BKXtoZERO

    Much better (I think) thanks! https://www.youtube.com/watch?v=0A6rxz0–ew

  • Julie 35 – 25 – 36

    Andre also at one time showed fib retracements on indicators esp Stochastics AWESOME !
    JULIE

  • Julie 35 – 25 – 36

    BK ES 3000 is possible … Now I will be spanked by Mole … The triangle Elliott Wave is considered to be a wave 4 When complete a wave 5 up will follow. IMO as I have posted now carving out wave E or also called E leg which should be the final leg of the triangle. Now quite often as I have posted leg E goes 1/2 way of the triangle then reverses so watch the mid point of the triangle E leg
    JULIE

  • BKXtoZERO

    I “could” have responded to MANY (of your posts) about EW but I have not because I don’t enjoy beatings from Scott/Mole. I loosely look, I have no long term counts but I do kind of consider it to some degree.

  • Julie 35 – 25 – 36

    BK I only look for impulses and corrective moves i.e. ABC’s Trend lines ; exp moving averages ; support – resistance levels ; fib rteracements and fib extensions ; overbought and oversold ;Negative and positive divergences on MACD RSI CCi ; volume spread analysis ; chart patterns are much more important to me I have learned everything from my husband
    JULIE

  • BKXtoZERO

    I know… it is past secondary for you but Mole really hates it.

  • BKXtoZERO

    nite nite!

  • Julie 35 – 25 – 36

    Me too BK See ya tomorrow
    JULIE