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And Down She Goes

And Down She Goes

by The MoleDecember 3, 2013

Yesterday’s speculative Net-Line Sell Level entries have produced rather nicely in less than one session. Knowing my audience I would be surprised if you guys weren’t looking for possible support zones and thus reasons to lock in some of your winners. The Zero signal is also showing somewhat of a divergence although I am not certain yet that this dog is done just yet.

Here’s what we’re looking at as I’m typing this – a pretty pronounced diagonal forming on the Zero Lite. Only thing is that it would need to produce a swing back before the close of the market. If not then we may be dipping lower in tomorrow’s session. So just in case let’s look at possible support on the equities side:

The Dow futures are on a collision course with the 25-day SMA – not a guaranteed support candidate but we also have recent resistance on the weekly panel. I’d point toward 15830 here – things should start slowing down around there or we may just go all the way, and by that I mean 15500.

The spoos also falling pretty consistently today. Again I hate to step under a falling sword but may look for signs of life near 1780. If you went short yesterday after we breached that NLSL then there are two way to handle this. Either start scaling out toward the EOD and be done with it. Or if you’re a sub watch the Zero indicator – if that diagonal I pointed out is being breached again and we see lower spikes toward the close then this sell off may have legs to continue further.

This may be amusing – about a week ago I pointed out the bollinger compression on the VIX and I suggested that we were probably heading into more volatile conditions. Little did I know that it would happen so soon!

Crude was a short entry on the hourly yesterday and after some consideration I decided to not pursue a long trade on a breach of that 25-day SMA. Big mistake as it has gone gang busters and the landscape has changed considerably now. As of right now we are touching the upper 25-day BB, the 100-week SMA, and the 25-month SMA. I hate to suggest it again but this may be a good spot to be short. However, unlike last time I would very much entertain a long position should crude manage to push above around 96.35 (above that upper BB).

Where I didn’t fail my intrepid rats was on the Dollar – textbook short entry near the 100-day SMA and it’s been a sea of red candles since. I’d say we had enough fun and it’s time to start scaling out. Yes, nothing here that tells us that it couldn’t drop further. However, there is a defined falling flag formation on the daily and we’re near the lower boundary. So let’s call it a trade and look for easier victims to toy with, shall we? 😉

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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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  • Darkthirty

    1788 magik #

  • Sean

    Closed out the /ES short at 1787.75… getting green arrows on the hourly SPX and it moved way too fast for me to hold on here, also approaching the 20d and 25d support… if this is a real correction I would think we should see a retest and get a better spot to re-enter the short side..

  • CorporalCarrot

    Been so busy have been unable to post but as I said late last week I expected serious movement this week and we’ve got it. Been short since breach of black gainline gainline yesterday, just covered all positions and gone long. Looking at multiple timeframes but on my platform I find the hourly very reliable generally and the RSI just painted its most oversold in as long as I can remember. Gone long on RSI divergence at last flushout, plus zero. Will be keeping a very tight stop on this (since I started typing already moved to b/e) but basically think here or hereabouts is where the bulls mount a defence. Not a big position, speculative bottom fishing but will add if it gets traction.

  • molecool

    Well played.

  • CorporalCarrot

    In case I’m not around tomorrow am, remember guys the ADP report is likely to cause a massive stop-run @ 8.15 am.

  • Sean

    Hey Mole, question on the /CL setup… by ‘mistake’ did you mean it was a good trade but you wish you had the extra $800 per contract, or that you missed an opportunity because you should not have filtered out the long on a breach of the 25d ma? … at the time I was looking at the charts and didn’t know why it couldn’t run up to $100 or more over the next few weeks since the recent lows were near a long term diagonal support on the monthly chart and almost touched the 200w ma. Also, my hourly and 4h oscillator had turned up and the price action on the daily chart looked like it was forming some sort of bottom… but I don’t have enough experience/confidence to question your perspective, so i just watched… was what I was seeing just coincidence/luck (hindsight is 20/20) or is there a lesson in this trade?

  • Darkthirty

    where’s ES VWAP for the close ramp? Anyone got it?

  • Skynard

    Never made it (93 res), going lower:) Not a good time to bottom fish.

  • BobbyLow

    Hey Sean, FWIW, I’ve been reading your comments and I don’t think you give yourself enough credit. You might be lacking in confidence but your approach to various trades appear to be well reasoned. Also I saw similar things as you did regarding /CL and I am Long.

    That being said, confusion can come into play when different traders are using different methods for entry/holding time etc. This doesn’t make anybody right or wrong – just different.

  • Darkthirty

    I might be seeing things, but i’m counting 2 of 5 just completed, 5 extension? should get pretty into the close if so. 1770 maybe. 86 didn’t make a clean bottom

  • BobbyLow

    From the shit coming out of the woodwork department. This is a real Hoot! LMAO

    “Prices jumped as much as 2.5 percent, narrowing WTI’s discount to Brent. TransCanada plans to start deliveries Jan. 3 to Port Arthur, Texas, via the segment of the Keystone expansion project from Cushing, Oklahoma, according to a government filing yesterday. Cushing is the delivery point for WTI futures.”

  • Sean

    Thanks.. I’m usually a pretty good student so I can ‘say’ the right things, but I haven’t actually been ‘doing’ this for very long… and for Mole’s setups I follow all the rules he has laid out and watch the same time frames to try to fully understand the trades in the context of his system (which appeals to me), partially to become a better trader, but mostly so he stops complaining about nobody listening to him 🙂

  • Heisen_Gerb

    AAPL, $566 – lingerie and basic fruits.


  • Ronebadger

    Apparently, one stock accounts for one stock index

  • Darkthirty

    closed at VWAP, How do I find that, do i have to calculate it myself?

  • Heisen_Gerb
  • molecool

    Yeah – I did not take the long trade as I didn’t think there was too much upside potential. Should have just focused on the inflection point and not over think it.

  • Sean

    I use Stockcharts for the cash index…

  • molecool


    ¨°º¤ø„¸F R E S H „ø¤º°¨

    ¸„ø¤º°¨ M E A T“°º¤ø„¸


  • molecool

    Oh, I enjoy complaining – you can’t take that away from me!!

  • Darkthirty

    Appreciate that, just another recurring issue.