Now Reading
Good News Everyone!

Good News Everyone!

by The MoleOctober 17, 2019

The good news of the day is that many of you are still here, (hopefully) participating with your accounts intact after having successfully negotiated a veritable minefield of both bear and bull traps that started in early 2018 and extends into today. If one takes a step back and observes a weekly or monthly panel on the E-Mini or the SPX the medium to long term volatility we’ve endured over the past few years becomes quite palpable.

As a sidenote but it is rather pertinent: I actually posted an identical theme back in late 2010 right after having returned from a rained out business trip to Silicon Valley where I also met up with Tim Knight from the Slope.

Those were the early days here at Evil Speculator and to be honest the place was a lot more hopping than it is today – an average comment count easily exceeded 200 per post, much of it being setups and charts. I can’t help but miss those days (and some of my hair) sometimes.

But all the excitement, all the hype, it was nothing but an illusion squarely based on a single minded notion that the market was just about to roll over and descend into hades, thus in the process banking everyone holding short positions much ill deserved riches.

It’s Lonely At The Top

Of course, as usual, reality turned out to be a bit different. What we got instead was the bull market from heaven, which – to my credit – did not take me much time to recognize as I quickly abandoned any bearish bias in early 2011. However, that was about the same time traffic in the comment section started to steadily drop off.

Unfortunately many of my fellow retail rats weren’t able to make the transition to a bullish or neutral outlook. And when I look at the comment section in that old post it pains me to see so many faces who ended up getting cleaned out or giving up as one bearish prophecy after the next turned out to be a big nothingburger.

But that is the nature of things and it holds particularly true when it comes to participation in the financial markets: For one person to accumulate big gains someone else somewhere will have to lose equally much. Which of course serves that bastard right for having the temerity to disagree with me! 😉

The first chart on the very top shows us the ordeal of the past 2 years which in turned managed to trigger a cascade of redemption requests in the fund manager industry. Zooming in a little further to the past give months we see two whipsaw zones, the second of which we just entered.

The cluster between 2980 and 3020 (ES rollover adjusted) is where bullish dreams have come to die but unlike in July or September we are now heading into a traditionally bullish market cycle.

Implied volatility as expressed by the SPX:VIX ratio has now started to lead the pure cash index, albeit only slightly. But unless I see a clear bearish divergence on this measure I’d assign this one to the bullish column.

Speaking of the VIX – there is good news to report, well sort of… there’s one caveat:


It's not too late - learn how to consistently trade without worrying about the news, the clickbait, the daily drama and misinformation. If you are interested in becoming a subscriber then don't waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Please login or subscribe here to see the remainder of this post.

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.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

BTC: 1MwMJifeBU3YziDoLLu8S54Vg4cbnJxvpL
BCH: qqxflhnr0jcfj4nejw75klmpcsfsp68exukcr0a29e
ETH: 0x9D0824b9553346df7EFB6B76DBAd1E2763bE6Ef1
LTC: LUuoD6sDWgbqSgnpo5hceYPnTD9MAvxi6c