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Major Technical Damage
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Major Technical Damage

by The MoleOctober 10, 2014

Wednesday near the close of the U.S. session I really thought the ole’ Yeller had us all by the balls. If there has ever been an opportunity to squeeze the bears into oblivion then this had to be it. In yesterday’s musings Scott confirmed my notion that the series of lower lows and lower highs was still intact (barely) and that the bearish case was on the edge of extinction but still had a small chance of resuming. The odds were pretty minuscule IMO and early yesterday I kept checking the tape waiting for the invariable second shoe to drop.

But then suddenly something very curious happened:

In the last 20 minutes, someone has placed/canceled a 666 contract order in eMini 26 times $ES_F

— Eric Scott Hunsader (@nanexllc) October 9, 2014

Someone at Nanex reported a surge of selling orders (yes, I did find it on ZeroEdge – bite me) and the tape suddenly caved in as all of the other bots followed suit. And the world for the bulls will not be the same again – at least for a while, most likely not for the remainder of this quarter.

2014-10-10_spoos_volume_profile

Unless – yes unless we see an immediate surge right here TODAY the bulls will be toast for a while. I’m not saying we drop like a rock from here – there will be bounces. But in order to wipe a major stain off the bullish case immediate action is needed.

2014-10-10_spoos_overview

For we are about to paint an official double sell signal on the weekly E-Mini (and the SPX cash as well). We have a breach of the 25-week SMA as well as a breach of a weekly Net-Line Sell Level. That is bad medicine for the bears and today is the day to somehow make it all go away. In order to accomplish that feat a push above 1950 will be needed – 1960 would be better as that’s where we find the 100-day SMA right now. Bear in mind that both the 25-day and 100-day SMA held up for the fourth time now – that in itself is enough to cast some serious doubt as to whether the bulls are still in charge here.

2014-10-10_VXV_VIX

Not to count out any last minute Fed-sponsored Hail Mary’s but market makers seem to be agreeing with me that trouble looms ahead. Here’s the VXV:VIX ratio and it’s pointing straight down. I would keep an eye on this one today for early signs of divergences – also mind the VIX:VXO chart on the short term side.

2014-10-10_spoos_correlation

Our GBP/JPY equities correlation (based on carry trade activity) is also pointing in the same direction.

2011-06-05_AVG_seasonality

Now someone in the comment section pointed toward the final quarter as being a traditionally bullish period. And yes, he was absolutely spot on about that – that’s usually where the bulls rule the day.

S&P_percent_positive_monthly

And we may still see that happen but let’s look at October specifically. Contrary to common believe it’s actually a very bullish month – the numbers do not lie. But that’s not the whole picture – because it just so happens to have a little SKEW problem…

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You have been briefed – now have fun but keep it frosty. See you guys later this afternoon.

Cheers,


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

    Mole, zerosludge? really? I’m disappointed.

    Good to see some Volar minded stats. like old times.

    http://www.me-me-me.tv/images/2009/04/hairy-pig.jpg
    Bulls make money, Bears make money, Pigs..

  • Ronebadger

    ahh, Volar…I remember him

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

    Exciting times crew! Let’s get that money today! Thor setups entered overnight look OUTSTANDING

  • Scott Phillips

    Great trader and great guy. Market took him out, if it can happen to him it can happen to everyone

  • tradem4alpha

    You mean he blew up? Lost it all, almost all? Really didn’t think that could have happened to him…

  • tradem4alpha

    But he did have accounts with MF Global, which went under…so some external circumstances, not necessary market related.

  • Skynard

    Wow, really happy with results thus far:)

  • https://evilspeculator.com molecool

    On paper only I hope – early days…

  • https://evilspeculator.com molecool

    I miss his stats – I wonder if he’s still out there trading.

  • https://evilspeculator.com molecool

    You know what happened to him? Please share!

  • Scott Phillips

    Me too, and I think for you it makes perfect sense, since it is a trend following system it naturally goes counter to your usual entries. Should, in theory be mostly alpha for you

  • Scott Phillips

    I’m just assuming he either stopped trading or busted out, or I would have heard from him. We used to email a bit and he just dropped off. Acutally I’ll email him now and ask

  • Scott Phillips

    Could well be. I also got clown raped by MotherfuckersGlobal

  • Skynard

    Lol, think you are right. Many entries were in agreement with my speculative trades.

  • Skynard

    S /DX 86.045

  • Scott Phillips

    That is my point. Every year traders smarter (he was), better prepared (he was), more experienced (he was) than me blow up.

    It could *certainly* happen to him, me or anyone else. This is a knife fight in a dark alley and should be treated accordingly.

  • Scott Phillips

    Boy he put some work into those posts! Great stuff, groundbreaking research IMO

  • Scott Phillips

    GBPUSD looks very good right now

  • Skynard

    Trading small Forex positions, very easy. Set and forget:)

  • tradem4alpha

    Do you know a lot of traders, with long track records (5-10 years min), that, almost suddenly blow up? And I don’t mean some very well known cases (Niederhoffer etc), but ones closer to someone’s circle. Very tough for someone to be in this profession for 10 or more years, and almost suddenly to lose it all (or almost all).

  • https://evilspeculator.com molecool

    Yup, he did….

  • https://evilspeculator.com molecool

    Keep me in the loop – and send him my regards.

  • Skynard

    Watch here rats, div being generated on the hourly and 5 min.

    Failed

  • Scott Phillips

    Will do 🙂

  • Scott Phillips

    Yes I have seen it many times. My closest friend nearly blew up a 13 mio account (his account was down to 2 mio from 20 and he had personal debts exceeding that, so technically he was broke)… traded his way back. Funny thing is the month before we were taking about him achieving his “number” and giving it all away, sticking it in the bank.

    Never forget the odds are always that you will be carried out on a stretcher. Play defense first

  • ridingwaves

    that vix history chart is awesome and really makes me confident on the 40 vix coming in Nov-Dec

  • Skynard

    EXTREME on the ZL, she’s gana bounce

  • Malcolm O’Mara

    FAZ @ 17.39. Tight stop 17.18.

  • ridingwaves

    the selling on bounces is just overwhelming the bulls

  • CorporalCarrot

    Scott do you mean GBPAUD and also can someone confirm the ZND alert?

    Btw I forgot to cancel my AuDJPy entry and it’s running like a hare.

  • Skynard

    Need to suck m in:)

  • ridingwaves

    true dat

  • Malcolm O’Mara

    Stopped @ 17.18

  • Ronebadger

    usually bounces around here…usually
    http://money.cnn.com/data/fear-and-greed/

  • Billabong

    11 am EST European close…

  • Skynard

    ZL broke:(

    Edit: Runnimg now,

  • bdoone

    I believe its 11:30am NY time

  • Billabong

    You are right … LSE … 11:30.

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

    ..back from exercise and … 9.5 S&P points. a new low.

    looks like high yield finally gave up the ghost.
    [JNK]
    http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=0&mn=6&dy=0&id=p38358677578

  • Billabong

    Major oil companies taking it on the chin today … most down around 20% from 3 mo high.

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

    they’ve been taking it for many rounds now.
    6.82 – wonder if it can go to zero.
    http://stockcharts.com/h-sc/ui?s=$BPENER&p=D&yr=3&mn=0&dy=0&id=p09124950715

  • SirDagonet

    Do I remember correctly that he’s the one who made a small fortune (maybe a large one) during the 2012 summer drought with long options on soybeans?

  • bdoone

    Not much of a bounce into close…SOX still down 6%

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

    not sure, but there was a Tofu post.

    https://evilspeculator.com/?p=31133

    in 2012.

  • SirDagonet

    since you’re good at ES research… I think I vaguely remember his post wherein he said something to the effect that he was taking an extended vacation after exiting his trade positions… and that he’d changed his trading strategy because of that success… (not trying to misrepresent him or put words into his mouth, my memory may be faulty)

  • Billabong

    I was going to mention something about the BPI … it’s now lower than the gold miners. Talk about a gift that keeps on giving; HAL. Down 12% to $54.58 since Friday COB … Should have shorted this one. We talked enough about it.

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

    the S&P ’40’ let me down, but JJ should be pleased.
    ah, so onto the ’80’. a Low band based on the previous low this year.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=10&dy=0&id=p02079378926
    -GG

  • Billabong

    Some came close to zero in 2008-2009.

  • Skynard

    SPX lost 1920 and down elevator:)

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

    1916.66
    it’s an Omen!
    at least I didn’t get cute this week.

    EDIT:
    FRESH Bear Low
    [SPX:TLT]
    http://stockcharts.com/h-sc/ui?s=$SPX:TLT&p=D&yr=1&mn=0&dy=0&id=p18685093650

  • Skynard

    Tested the dollar today by shorting. If it can regain that lower high will be long. Short for now:)

  • wandering196

    You also posted GBP/AUD as a long term setup on Oct 1

    https://evilspeculator.com/?p=43368

    so liking this one a lot, thanks

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

    yeah well, 616 is the true evil. or perhaps it was an ancient day ‘typo’.

    “Around 2005, a fragment from Papyrus 115, taken from the Oxyrhynchus site, was discovered at the Oxford University’s Ashmolean Museum. It gave the beast’s number as 616 ???. This fragment happens to be the oldest manuscript (about 1,700 years old) of Revelation 13 to date.”

  • Skynard

    /ZC and /ZW pulling out of the gates:)

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

    XLE holding, (84.95 intra )
    http://stockcharts.com/h-sc/ui?s=XLE&p=D&yr=0&mn=10&dy=0&id=p04375088148

    i’ll be damned. 😉

    okay, well off to go play with the little gerbs. Fall Break and all.
    Have a great weekend guys.
    -GG

  • ridingwaves

    Campaign V long sold out for 4.5R…me thinks a rally is being built, short V, small play…

  • Skynard

    Above SPX 1930, could be……..

  • ridingwaves

    vix long tail is not to my liking…pushed down 4 pts from high this morning….heading for 15 again…

  • Skynard

    Do not trust this move at all, added short:)

    Nice trade Bro!

  • ridingwaves

    I hear ya…cats with long tails scare me..

    http://s14.postimg.org/nwdpznpld/vix_long_tail.jpg

  • Skynard

    VIX back to bear territory

  • Billabong

    Tails or wicks?

  • https://evilspeculator.com molecool

    Hey does any of you guys know where the ‘clone chart’ icon has gone in TOS charts? I can’t find it anymore and TOS support are fu…king idots.

  • Ronebadger

    TRIN way down from earlier…let’s see if this posts properly.

  • Skynard

    For a snap shot?

  • momac
  • Skynard

    Added /ZC

  • Skynard

    Cool, thanks!

  • Ronebadger

    oops, “not for distribution”…so don’t distribute this…I just did though…rats!

  • Skynard

    You want me to remove it?

  • Ronebadger

    go ahead, remove it…I don’t want to be a cyber-criminal…just trying something new. thanks!

  • https://evilspeculator.com molecool

    No, simply CLONE a chart window.

  • Skynard

    Nasdaq leading this rats!

  • Skynard

    Lol, have the same issue with all the upgrades.

  • https://evilspeculator.com molecool

    Here – I found an old screen grab. And just in time, I was starting to think I was losing it….

  • https://evilspeculator.com molecool

    Those fuckers drive me nuts. And customer support is manned by people with an IQ below the average Siberian room temperature.

  • CorporalCarrot

    Close going to be very interesting today, every bounce has been sold down, I’m thinking the psychology of the bulk of investors is going to not want to be heading into the weekend with any long positions. Even if it doesn’t collapse into the close today today, doesnt look like the V-shaped bottom we have become accustomed to in this honey badger market, I reckon any spikes into the close are shortable for those not already on the bus. At the moment this looks like a pause that resets oversold conditions and we get the final flush and a decent long opp next week.

  • Skynard

    Got ya,

  • Skynard

    lol, come on SPX 1900

  • CorporalCarrot

    Very surprised to see that today.

  • https://evilspeculator.com molecool

    Yup, and customer support still has no clue as to what I am talking about. Where the hell do they find these people? This once again supports my notion that 99% of the folks out there deserve exactly how much they are making, which is very little.

  • Skynard

    Would not surprime me at all, just look at volitility. Above 20, game on

  • CorporalCarrot

    30 points into the close…….don’t get me wrong, I’d love it as I’m short but I can’t see it.

  • CorporalCarrot

    This would be one of my best weeks in two years were it not for the FOMC minutes. I’m actually thinking of doing what Bobby does and just exiting all positions around those times, they have become bi-monthly stop-run events for MM’s and its very frustrating (try as you might to keep emotions out of it) to get stopped out of “good” positions for b/e or a loss, only to see the thing reverse either same or next day.

    The other alternative is widening stops but down that path I do not want to go.

  • Ronebadger

    I’m thinking that long topping tail on the VIX is telling, especially if we close inside the BBs.

  • dragan ilic

    Come on American grizzlies— Euro teddies waiting for you… below 1910 should get the job done!!! GOOOOo!!! DO IT!!!

  • ridingwaves

    that topping tail thesis of mine just blew up….dagnabit

  • bravenewworld2011

    I’ve found it is always healthy to lay out the opposing position to check myself. On the SPX I see: stopping at last August’s low, at the volume hole, at the 25W lower BB on the weekly, near 100D lower BB on the daily, a generally rising NYMO over the last two weeks, and generally rising TICK (5MA) over the last two weeks. I bet they push it down to 1905 just to make us all feel confident, then a good teeth kick-in come Sunday night as we open 1.5% higher. Sometimes the best bear setup is right at the perfect bounce point, and we are there.

  • dragan ilic

    Weekly chart – not much support below 1915 – 1916 SPX…..Also monthly sell signal…October far from over, but this week is.

  • dragan ilic

    NASDAQ ending week below middle BB on weekly…Joining up DJIA…Synced and ready to drop

  • Billabong

    When you expand out the time frame to the weekly, we haven’t even touched the lower BB. We’re only in the second week of a downturn and there is a definite change in MOMO … this could go on for a few weeks.

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

    definitely a shift.
    doesn’t look too hot for High Yield.

    http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=1&mn=0&dy=0&id=p05971188855

    unless there’s a bounce, ramp-n-camp time is o. v. e. r.

  • Billabong

    Are you watching GC? Looks like the weekly is moving towards a buy.

  • LegendC

    It’s been put under the “Actions Menu” in the same location…

  • Billabong

    Selling every move up instead of BTFD is telling

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

    i’m watching. not hopeful. kind of steady in price.
    let it prove itself.

    http://finviz.com/futures_charts.ashx?t=GC&p=h1

  • Billabong

    Concur … It’s amazing how much R can be increased with a little patience. I was going to reduce my shorts today unless we were close to the LOD … shoot, we’re making new LODs going into the close.

  • ridingwaves

    broke my rules and exited way to early, could have banked 9R’s on that last move down…

  • bravenewworld2011

    So they took it to 1906, not 1905 as I suggested…those fuckers. I exited my short at 1907. I’ve seen this setup before and the bears get dicked almost every time. Now Monday we keep dropping I’ll be short as hell as we’ll be nowhere near any branch to catch. But given how this market has been for about 2 years, I’m betting we get a bounce which puts us back to step one on any bear or bull case.

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

    *time check*

    well, I thought 15.96 could be the max a few days ago, looks like it best that by a small decimal. (15.87)
    [SPX:TLT]
    http://stockcharts.com/h-sc/ui?s=$SPX:TLT&p=D&yr=1&mn=3&dy=0&id=p71544674998

    and the history of dips in the last 3 years, is outstanding.
    ROC(12) on the daily SPX is among the elite of dips
    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=3&mn=0&dy=0&id=p36731546122

    -GG

    http://4.bp.blogspot.com/-brmaifEzO6o/UtLvY72JoTI/AAAAAAAAKLg/VtxkoswGn0M/s1600/bestwaytodrinkguinness.jpg

  • Malcolm O’Mara

    Took it @ 20.20. Will set a Stop Sunday.

  • Ronebadger

    I’m not sure this dopey thing goes any lower…but it’s interesting

    http://money.cnn.com/data/fear-and-greed/

  • newbfxtrader

    @Skynard:disqus the sky is falling. Time to step in? What you looking at for longs?

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

    it’s still in beta, but yeah – it can go lower. (never say never)

    http://s17.postimg.org/j439cib27/beta_gage.png

  • newbfxtrader

    LOL

  • dragan ilic

    LONGS ? Sky is falling ! Short the shit out of the tape

  • newbfxtrader

    Time to look for a hammer….

  • newbfxtrader

    We have been short. Time to lock in profits look for the bull case.

  • dragan ilic

    If we asume that the market topped at 2024 SPX. Retrace ? 1800 SPX ? 1500 SPX lines up good with that lower BB on monthly chart. What do you think ? Am I to optimistic ?

  • dragan ilic

    Bull case totally died tonight

  • Scott Phillips

    Better not to guess since that guess will color your perception. Wait and see what happens, it will be obvious to you 🙂

  • Scott Phillips

    Don’t do that! Not time to lock in profits at all, major technical damage is not wiped out with a single down day. Bull case got crucified yesterday and today, the bull rats will be forced out of their positions on Monday for sure

  • newbfxtrader

    OOkies! Tired of giving back profits on stupid short covering rallies. Always an issue when/where to lock in profits you know.

  • Scott Phillips

    Me too!

    Scott

  • Scott Phillips

    AUDJPY is a great trade! I’m in it from much higher up

  • dragan ilic

    True 🙂 Out of the drawdown Scott?

  • ridingwaves

    boy do I know that today….exit cost me a lot of change….and it was for the very reason you mention above, yet I posted below we are heading to 40 vix in next 60 days…what a dumbass, I’m conditioned to take profit before the home run profit materializes…

    forest gump was a good buy and hold investor….I might have to give this thing up….

  • Scott Phillips

    In the cracker account yes the main account almost but not quite 🙂

  • Scott Phillips

    The idea that you instinctively want to get out of shorts AND get into longs is indicative that you might be getting a little excited.

    The two things are not related. You should have entered shorts with a best case risk reward ratio of 2:1 or 3:1 (and you did) and should be thinking about exiting when the odds of continuation v reversal are around 1:1 (I think we have a little way to go but you could be right) Once it gets into coin flip territory you don’t want to play, right?

    Just because you are out of shorts you should most certainly NOT be stalking longs, since of the realistic probabilities only one of the following will result in a win big enough to justify the risk.

    – v reversal you should be bullish
    – transition from a downtrend to a trading range
    – dead cat bounce and another shakeout lower
    – bounce before another leg down

    Even if you are right, your trade management is complicated in counter trend trades and it is overall a more difficult game to play

  • https://evilspeculator.com molecool

    Dude, I keep telling you guys that you have to learn to let your winners run. Those kids have no patience these days…

  • https://evilspeculator.com molecool

    One trend pays for ’em all.

  • https://evilspeculator.com molecool

    Jeezes – you people – WHEN are you going to learn these basic lessons? Why do I keep posting here?

  • newbfxtrader

    Gotta get it together! Alright.

  • ridingwaves

    I don’t think it’s you people…this is specifically a riding wave problem….left a lot of money on table not following my setup..I did make 4.5R but lord almighty it could have been much bigger….

    I might get out of this game at end of the year….work makes it to hard to manage the trade…

  • mothwhoflysbackwards

    Thanks for the offer in your last reply. My first reaction is what me build a system – that sounds a little above my pay grade. Could the VIX buy/sell really make money.

    I could get an idea if the signals work “by hand” but trading system wise I think I would need a computer. Enter on the signal with stops at 1R, up 1R stops to B/E then just let it run? trail stops? Filter out counter trend signals and what the hell do I mean by trend? LT ST how to define that?

    Thinking about it gives me a whole new outlook on the complexities of system design.

    I have this thing called wealthlab pro (that I have seldom used) that maybe of help if I can figure out how to use it. If I can it should apply my parameters and give a list of trades taken and the results. My guess is I would be backtesting if i did this.

    ANYBODY have any info on wealthlab? Is it a good tool or would it be a waste of time trying to learn it? It claims to let you build a system and even autotrade it.

  • Scott Phillips

    Moth, trust me if it’s viable I can show you how to build a system out of it. Also for 99% of people automation is not the solution. It’s certainly not for me, I could be running my systems automated and I still like a human in the loop.

    Hit me up by email and we can start with testing “is it an idea worth further testing?”

    The way to do it is as follows. You take an A4 sheet of paper. On the top right headings on the following columns

    1xDaily ATR(14) 2xDaily ATR(14) 3x ATR(14) Market Type

    Those are the stops we are going to initially trial, and we will leave the “market type” column blank for filling in later. The stops won’t be right, but they will give us an idea if it is stupid or worth investigating. Good ideas are ROBUST, the way that bollinger bands are good even with parameters from 15-35

    You then load up a VIX chart and search back until mid 09. Write a date on the bit of paper for every signal.

    Then pull up a emini continuous contract, and you are going to write under each date W(win), L (lose) What you are testing for is the hypothesis

    WOULD I HAVE MADE 1R BEFORE BEING STOPPED OUT? If yes, mark a W

    Fill in all the columns except for market type, and this should be a rough unoptimized system that will still be positive expectancy if you have a positive edge. Also if it is a real edge most stops will be

    It’s about 2 hours of work for you and we can rule it out or rule it worthy of further investigation. The rest of it, when to move stops to BE, when to trail stops, all the rest of it, that’s a well worn path that we have walked down many times before.

  • Scott Phillips

    There is a little bullish evidence here, I’ll try and post over the weekend. Weekly double bottom approaching which I marked as the dip buying zone in my previous post and a weekly lower bollinger. Still major technical damage and easier to sell the rips from here

  • Scott Phillips

    It’s almost impossible to optimize for 9R winners with high SQN. You get one once in a while, but most high sqn systems have a few 3R winners and not much over that. The inherent large standard deviation involved in stalking the massive outliers means massive drawdowns

  • Scott Phillips

    And very important is the break of the weekly hammer low. Bullish case totally rejected, odds very high we close lower in a week

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

    The simple mechanical system worked.
    the bpspx never got above the EMA(10).

    The VXV:VIX is low, but like Feb – there is nothing to prevent it from staying low.

    http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=1&mn=1&dy=0&id=p97292029258

    -GG

  • mothwhoflysbackwards

    O,K, So if the ATR(14) at the time the signal triggers is say 6 that would be 1x 6, 2x =12, 3x= 18.If the “trade” hits 6.12.or 18 before stop (at 6.12.18) would have been hit I mark it a win right?

  • Scott Phillips

    SPY would be fine, continuous contract would be an ok approximation for first quick test

  • Scott Phillips

    Thor equity chart (real world numbers)

  • dragan ilic

    Weekly review: This trading week was the most difficult since i started trading. Algos were really going wild on that tape. My brain is still toasted.Drawdown, recovery, another ATH. Anyway ended last week at 35.60 %. Started this week with an deep drawdown (overnight positions) down to 32 %. Some of you know i love hammers, i dont fall in love and failed hammers are my specialty. At middle of the week the drawdown was neutralized. Ended this week with another ATH 38.33%. Still have open bearish positions, so i am breaking my rules. But i entered those positions as soon as the hammer failed at 1966. 4 trades: 2 big losses,2 huge wins. Time to practice that saying ,1 good trend pays for em all. Nice weekend all. Dragan “the hammer “Ilic. 🙂

  • dragan ilic

    Equity curve.

  • newbfxtrader

    Used to be your daily routine to post this one. I learned this one from you.

  • dragan ilic

    And i forgot the most import thing. Mole, Scott thank you for all great posts and comments this week. Keep up the good work. I am taking a couple of days of trading. This 1 is for you.

    http://youtu.be/xjbu1BCJI-s

  • dragan ilic

    we will get em next week. 🙂

  • dragan ilic

    We will get em, as long as we stick to our system, time is on our side.

  • dragan ilic

    Nice numbers : With that much money I would retire.

  • dragan ilic

    Nice numbers : With that much money I would retire.

  • https://evilspeculator.com molecool

    How did you know I’m an ass man 🙂

  • strider

    I didn’t get any alerts to close Thor trades for the weekend. Is that the way it should be?

  • Scott Phillips

    Did you take GC or SI? If you did you will get an alert to close on open Sunday night. Those are the only ones, rest look *good*

  • Scott Phillips

    Outstanding mate well done 🙂 Very good sharpe ratio there

  • Scott Phillips

    One good trend pays for em all!

  • Scott Phillips

    I’m just getting started

  • strider

    Fx only.

  • Scott Phillips

    Yes the maths you are using above is correct. I wouldn’t even use a calculator unless you think it’s borderline, most of the time you can make an accurate guess.

    This type of rapid prototyping back of the napkin system development is VERY useful. If you think about how much work is involved in computer backtesting something, you can take an idea and test it in an hour this way, throwing out bad idea after bad idea until you get a winner. Then once you are sure you have an edge you start to build a system around it

  • Scott Phillips

    I might have been too hasty saying that. Decent chance for a bounce a little lower down

  • Scott Phillips

    Agree, I jumped out of shorts at the close for a small loss. Failure to go down on a short setup – bullish

  • https://evilspeculator.com molecool

    Not enough these days when an average house already sets you back that much. As Scott – says – that amount is where it actually starts being interesting. Almost NONE of you guys every think about compounding and letting money work for you instead of you working for the money. Once you really get that point then you realize the big difference between the ruling elite and the vast remainder of the population.

  • newbfxtrader

    Ok. keep us posted on Sunday with what you see.

  • newbfxtrader

    At a 50% compound interest rates things get astronomical in a few years. I am not sure if that’s practical. But so far I am liking the Thor equity curve. With daily entries should be manageable easily for most.

  • Scott Phillips

    It’s not practical, beyond a certain point slippage pulls over half the profit

  • Scott Phillips

    Not even an issue for me 🙂 I’d be very disappointed making 200% this year

    Trade the plan, trust it all works out in the end

  • SS_JJ

    Looks like you can add meat to the menu now.
    😉

  • https://evilspeculator.com molecool

    Correct – it gets more difficult as you start reaching the tens of millions threshold – but it’s probably a problem we all want to have 😉

  • https://evilspeculator.com molecool

    Read up on MFE and MAE – you can only shoot for normal standard distribution, optimizing for outliers is not recommended, even for trend systems.

  • https://evilspeculator.com molecool

    You have to decide what your priority is. If you love your job and trading is just a side activity then by all means. But if your heart is in trading systems then I suggest you pull through and learn from your mistakes. There is good guidance here and I’m not talking just about my posts.

  • dragan ilic

    What asses ? I just like the song 🙂

  • dragan ilic

    Charts of the week. MA 200 play. SPX 500 VS OMX 30.

  • http://www.ProfitFromPatterns.com/ Ivan K

    A much greater question / challenge is … the survival of the current bs financial system / world … this may / will have a more immediate impact.

    Consider: As has happened before the amount of leverage available to players may be dramatically reduced (this already exists in the FX markets with USA people) … account minimums can also be increased … to cripple the market.

    May hay while the sun shines may be / is the go !

  • newbfxtrader

    Yeah boss! I wanna have rich people problems…

  • newbfxtrader

    Correct as usual. They took away the gold and silver leveraged from FX accounts in the US. Not sure if you knew that. Couple years ago i think. But we do have some time. Japan is toast. The USD/JPY turn higher is I think just the beginning of a multi year trend. I am hping the socialists in Europe will screw up the Euro really bad. France is doing a stellar job at shooting itself in the foot so far. That should buy us some more time. When it comes time for US government to ahem tax the hell out of even 401ks I hope to retire…

  • http://www.ProfitFromPatterns.com/ Ivan K

    Every dog has it’s day … ditto every Empire … sorta kewl to watch from afar … yet the tsunami wave will be / is global in its reach … a real curveball currently is the Ebola / forced detention act (Connecticut) … the potential ramifications are really ‘interesting’ … if only in a perverse sense!

  • http://EndOfBull.org/ Pontificus

    nice to be in the best stock on the board right now.. 😉

    think some of you are jumping the gun on expecting a big bearish trend reversal. could be, but not a lock yet that we’re going to get a “real” correction.

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

    For Bears watching for surprises, beware the old S&P 100 High.

    http://s30.postimg.org/a95mnffoh/The_Danger.png

    -GG

  • Scott Phillips

    It was extremely difficult trading this week and I was travelling the whole week. Very happy with my own performance and it proves a thesis that it is possible to trade while travelling the world, with some effort in making sure you aren’t in the air in rollover times and have wifi/3g/4g internet wherever you go.

  • Scott Phillips

    Having been through MF Global I think the bears screaming for financial collapse at SOH will be surprised when their brokers go under because of counterparty risk.

  • Skynard

    Went long at close, WTH why not:)

  • Skynard

    Hehe, exactly. Trade on my mobile:)

  • Skynard

    Exactly, the market does not move straight up or straight down. Been there to many times and watch my profit fizzle away:)

  • Skynard

    Do not be greedy!

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

    I watch the renko flavored BP chart, hourly, now that it updates intraday.

    I watch the ema, BP line chart infrequently.

  • Scott Phillips

    Oh yes, from a little lower down its gonna be a coin flip in the short term

  • Scott Phillips

    It’s free right? If you want a better product pay for it 😉

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

    a little lower sounds good.

    about 15 months ago, there was a terminal panic spike low, in High Yield.
    I’m watching for it this week.
    (A panic dip below the 300 and the lower 150,6.0 band)

    From the high to the spike low was 32 trading days for 2013.
    This downhill run has been about 31?

    if History rhymes this would be the time.
    http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=1&mn=6&dy=0&id=p46660379456

  • CorporalCarrot

    On the “don’t be greedy” theme, just to let you know I was having a chat Friday with a €10bn+ portfolio manager that has always seen me right. Not that I follow his advice per se, but he is pretty representative of the thinking of “big money”, i.e. the essentially long only funds that are largely invested because there is simply nowhere else to put money right now that their fees won’t just eat away at the capital.

    It was interesting to me that the feelings were not of fear but of relief, of the prospect of some of these stocks providing buy points that are not crazy, a sense of a pressure release valve. I got all the usual “slow money” mantras of “buying the 200 day in a bull market is always good advice” type stuff and we are below that point right now.

    So while its been fun for the perma bears the last few weeks, its going to take a bit more to really rattle the market and cause the sort of cascades that you get in true correction/bear market territory. Big/slow money is gearing up for business as usual until further notice, absent black swan.

    So anyone with a short thesis should bear in mind that savage counter trend rallies like last wednesday could be in store at any moment.

    Any sort of premarket plunges down to effective 16,400 cash on the Dow territory or sub 1900 should be good for a bounce.

  • Billabong

    A similar experience with a friend of mine pointed out his company indicators still say stay long. However, the oil companies and miners are good examples of how quickly stocks can be down 20%. As you said, at some point, the institutional investors will be afraid to miss the upside potential. This combined with the analysts touting a historically strong period, will move a lot of money into BTD mode. Throw in short covering and you have a very nice DCB or a continuation of the up move. My campaign is based on what I see the market telling me … right now it’s down.

  • CorporalCarrot

    I don’t disagree with any of that, but that’s the difference between investing in individual stocks and trading indices. The two can give conflicting signals that meet in the marketplace. I’m just saying the prevailing psychology is not sufficiently discouraged yet, that serious bounces are a real possibility. Its this sort of character that often leads many bears to really struggle to get good entries into bear markets.

  • Billabong

    Is this where we make money going with the trend and trading the bounces? The psychology is definitely a player (as we know from our own discussions here). The 100 lb. gorilla may be the bond market. What if there’s a redemption liquidity problem? Same goes for equities. It may not be a question of the institutional position but the owners of the pensions wanting to reduce their exposure and move into cash. It doesn’t take much of a move to start a cascading situation. I recently had a discussion with a friend of mine about aggressive growth risk exposure with even a small amount of his pension accounts. It was along drawn out discussion, where I basically told him, he should consider reducing the aggressive growth portion for right now because in a big down move, it would probably do the most damage … result was nada … his take “it’s been going along fine and a 10% correction isn’t a big thing; I’m invested for the next 10 years ” … ok. That will be my last discussion with anyone on risk exposure …

  • Scott Phillips

    To a certain extent a bounce right here right now is bearish, because the onus then becomes on the bulls to breach the old highs with strength enough to carry a new leg up.

    If we go down with a panic from here that becomes a genuine buying op, and would likely be fuelled by short covering

  • Scott Phillips

    “A man convinced against his will is of the same opinion still” Mark Twain

  • Scott Phillips

    NEW POST

  • MK Ultra

    Hi Scott, So what you’re saying is that the setup being tested needs to be a winner, i.e. >50% wins. (Example: win, win, win, loss, loss)……..am I correct with this? Otherwise, the setup should be eliminated? What would you consider to be a sufficient sample size for say a 15 minute chart on an intraday system? -Thanks