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Inching Forward

Inching Forward

by The MoleJune 18, 2013

I’m rather thrilled that despite the recent gyrations in equities we stayed focused and managed to remain on the right side of the tape. We didn’t get trapped at the top and we didn’t get squeezed at the bottom – and that probably puts us into a pretty exclusive club (yes, secret handshake and all). So far so good and after our RTV Buy signal (which gave us a little scare late in the session yesterday) we are finally inching forward in the right direction. However, let’s not get complacent, as we are not out of the woods just yet:

The next and final hurdle is 3004 on the continuous NQ contract – if you use September the NLBL is placed at 2,997.75. However, I believe that for our purposes it is best to use the continuous contract.

On the spoos we are looking at a 1648.5 NLBL standing in the way of a squeeze higher.

By the way there was some talk about a VIX Buy signal yesterday and let me assure you that nothing could be further from the truth as the VIX closed above the Friday close on Monday. Please revisit the rules on the cheat sheet if there is any confusion.

Corn has managed to gyrate itself higher and meet up with its 100-day SMA. At the same time it’s now encountering upside resistance via the 25-w and 100-w SMAs. So I think this is not a bad place to be short until about 682.

EUR/CHF – yesterday’s RTV Buy is still active but is now questioned by an inside period. Per the rules a short trigger tomorrow would close out the long position and put us into a short. Frankly I’m not too eager to get into a short as we’re still sitting on top of the 25-week SMA. But if we push below that a short position might just drop us into the 100-week SMA.

GBP/JPY finding support at the 100-day SMA as well as the 25-week SMA.

USD/CAD testing its daily NLBL – as you can see it already touched its 25-week SMA and I think a push above 1.0216 would declare the previous SMA breach as failed and trigger a long signal.

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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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  • momac

    ID on /sb today.

  • saltwaterdog

    Thanks Mole… it looks like the roll messing up your net lines on /ES. Looks like you’re on Sept, but the 1648.50 line is on June

  • buysidetrader

    outstanding job Mole. thanks

  • molecool

    What a furball but I was using the continuous as shown by the ES ##-##. Either that or Ninja is messed up.

  • saltwaterdog

    we can all figure it out for ourselves based on our contract of choice but bigger point being there is nothing above here as far as net lines go. Thanks again for the post

  • molecool

    Actually I revised my comment – please reload.

  • Darth_Gerb


  • Skynard

    Ahhh, finaly broke:)

  • Darth_Gerb

    nonsense. just the day skinners squaring up the corners.

  • Skynard

    Signal is very wild like.

  • Skynard

    /ES still red, will be holding over night:)

  • AmazingLarry

    How long can the PPT keep the ball in the top channel of the pinball game?

  • Skynard

    Well, the bulls got their 1650 back. See how well they can defent it now:)

  • gsavli

    Just a comment regarding EUR/CHF pair – I don’t know how many of us are playing this one? This pair is heavily manipulated by SNB and pretty flat.

  • DarthTrader

    Obama was on Charlie Rose show last night where he indicated that Bernanke is on the way out. Probably bringing in Janet Yellen who is from Berkeley, way left Dovish. So Bernanke has a short time left to set his Fed Legacy. Also Bernanke did not show up at Jackson Hole this year. That is something he has always done so this seems very, very likely. He is getting out before the Excrement hits the rotating prop.

  • DarthTrader

    If that fully comes out tomorrow . . . market hates uncertainty.

    Bearish Gartley’s in play

  • molecool

    Looks like we’re operating on a skeleton crew. Damn I hate summer…

  • vladv

    some of the best trending moves of the last few years have occurred during the doldrums!

  • Schwerepunkt

    Everybody knows this already and markets shrugged it off. Still, tomorrow will be very interesting once the entrails have been spilled and read.

  • convictscott

    I see a lot of comments today saying why the bearish case is still valid. Right now the tape simply does not support those views. Take a look at Mole’s chart (with the blue horizontal line being the buy setup entry)×576.png

    The market opened at the lows, closed at the highs of the day, and closed above the previous day’s high. The evidence is unequivocal, bulls are completely in control, and willing to drive prices higher, though participation is muted ahead of tomorrows announcement (understandable).

    It is entirely possible that the upmove peters out and we paint a sell setup soon – but right now it is the bull’s game to lose. Talk of bearish gartleys, bearish rising wedges, trendline breaches etc etc is just fanciful until you have evidence that PRICE is actually doing something bearish.

  • Ivan K

    Goes with the territory … most people who use charts have a bearish bias whilst others have a bullish one … no surprise re commentary content.

  • DarthTrader

    I see it totally differently. I was fully long all day today as the market action had made the moves to set up the ABC move of a Bearish Gartley. That is what happened . . . except for one thing . . . the volume, the volume did not confirm the break of the B point on the /TF & /ES that I was tracking. The /ES made a high volume high on 6/13 at 1639.50 with volume of 340,854 then sold off. Today market rallied back up there and broke that level with only 212,915 volume. Daily Volume was 2,344,577 on 6/13 and 1,770,620 today.

    It may understandable that participation was low today with the upcoming Fed meeting but nevertheless the price structure built today is Weak because of it. Odds are extremely good volume will be very high tomorrow we will see which way it goes.

    The Reason the Bearish Gartley works the way it does is because the Larger market participants need a rally to distribute their stock. Perhaps they were long in the first downdraft I don’t know but they do happen a lot and by necessity they need days like this one.

  • convictscott

    Do you have any statistics on the gartley pattern success?

  • Darth_Gerb

    EDIT: if you go with the gartley’s with clarity…
    However, when you take into consideration the FXGroundworks structure ratings (clarity), a minimum risk vs reward and the Gartley patterns a trader would actually make, you will find a 68.2% success rate.

  • AMCabrera
    ok im back. the eur/aud was a complete bust and frankly it was disappointment that I didn’t now just stay short usd/jpy and long eur/usd. Anyhow I was quickly rip a hundred pip loss in eur/aud last week. This week Im going long usd/jpy and I will flirt with a short in the eur/usd later.

  • Ivan K

    The fact that a market makes a new high (or low) is far less significant than ‘how’ the new high is made … this is part of seeing the ‘context’ of a movement … your explanation of ‘why’ a movement happens, at best, is a working hypothesis and from a practical trading perspective only serves to distract … the purity of the Language of the Market means that the ‘why’ is not necessary.

    “Our not to reason why, Ours not to question why, Ours but to sell or buy … believing the signal not to lie” … with apologies to The Charge of the Light Brigade.

  • convictscott

    usdjpy looks good

  • convictscott

    Extremely dubious

  • convictscott

    The tape is…. inconclusive, like it is most of the time. Bulls can make an argument, and bears can also make their argument. When one side or the other capitulates we will see clear direction. My point is, that rather than guessing at what will happen if we watch and wait the market will make itself clear very soon. What I mean is that a failure of the bulls tomorrow gives the bears another chance to wrest control back (by definition the bulls are currently in control), and also another bullish close will invalidate the bearish argument and we will most likely see new highs or a retest of those old highs (again it is easier to see what happens than get out the crystal ball).

    It seems a function of chartists in general that inconclusive is interpreted as bearish, since we are always emotionally attracted to picking tops rather than higher probability continuations (I know I am). Objectively we have been up 3 out of the last 4 days. The one downday was half the range of the previous upday and failed to break the previous day’s low. Before that we had 2 consecutive down days which failed to break the lows of the previous bar.

    I can just hear old Turkey saying “it is a bull market you know ;-)”

    Don’t get me wrong, it is entirely possible we are tracing a big picture retracement and the upmove will fail and the bulls will take over again. After the bullish evidence it is unlikely in the extreme that we will reverse without at least an intraday attempt to go up (or a gap fail etc). A failed attempt to go up on weak internals, a gap n crap after the fed announcement painting a shooting star candle, a failure at the old spike high a few handles up…. All of those would be valid reasons to go short IF price confirms the view and starts falling.

    My point is that at this point in time we have absolutely no evidence that is happening. We may have that evidence tomorrow, but as for today, we closed at the highs of the day.

    There is nothing bearish about it yet. Every time the bears have tried to do damage to the tape it has been quickly and unequivocally reversed by the bulls. Shorting into a rising market on the basis that “its a counter trend move and will be quickly reversed” is dangerous in the extreme. Even worse “I’m shorting at a fib level retracement” which plainly and simply does not work a statistically significant percentage of the time.

    When you short a rising market even if you are right you are betting a long run sucker bet. Far better to wait for the market to stop, reverse a little and start falling FIRST, minimising the risk, avoiding many bad trades. There is no way to get around the obvious fact that it is inconclusive tape and probably little better than 50:50 odds either way. I would NOT get long here and would not get short.

  • Ivan K

    Am I missing something here … 1 of the next 1000 campaigns … given the context of this valid 12 hour Fake Out sell setup a 1/2 size position can be warranted … the 6 hr view has achieved entry on its valid shorting setup … one missing element is a retest of the current daily high.

  • convictscott

    Agree. If that setup was triggered (not happened yet) it would be strong evidence that the bulls are fucking it up. That would be a totally reasonable basis for a short as you would be shorting a falling market…. which is an entirely different thing than shorting a rising one.

  • newbfxtrader

    eur/aud is a good call I think.Its been chopping over 100 pips each way. 100 pip stop loss wont help. Gbp/aud better. As also gbp/nzd.

  • convictscott

    If we break the daily lows today the bearish case becomes the highest probability

  • amokta

    When is Fed Bernanke speaking?

  • badflightrisk

    They usually release the FOMC minutes at 2:00

  • Schwerepunkt

    Then a bearded press conference at 2:30pm.

  • amokta

    Ok, thanks, this is well into the trading day!

  • molecool

    Good stuff, thanks.

  • Skynard

    Took the long /SB and the /DX

  • molecool


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