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Let’s Not Overstay Our Welcome
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Let’s Not Overstay Our Welcome

by The MoleOctober 23, 2012

I’m starting to be cautious here – let’s be smart and not overstay our welcome. Although my P&F target on the SPX is near 1390 I’m seeing possible support on the equity side and an intermediate ceiling on the greenback. Let’s review:

We are below the ole’ volume hole and that’s bearish. A push up higher will require some energy and it’s not as procedural as we have seen in the past. HOWEVER, I’m also seeing sort of an expanding triangle formation right now and if we pop today or tomorrow then that could actually turn out to be medium term bullish, potentially lifting us to new highs. So what happens this week and into the election should follow us into late December. Obviously a drop much further below discards that possibility.

On the NQ side things are looking a bit more bearish as we are below the 100-day and it seems to be holding. What’s working in the bull’s favor (still) is that the Maginot line is pointing upward, so we have a rising resistance line here.

Unless we ramp higher massively at the EOD the VIX is probably going to paint a first leg into a VIX buy signal today. Noobs – that’s relative to equities, so don’t get confused (please check the cheat sheet).

I know, mexed missages, right? So let’s check out ole’ bucky which is currently bumping against resistance. In the past we haven’t even gotten near, so this is definitely a positive. But I think it’ll take a bit of doing get us higher here, I’d be more comfortable to see a swing higher followed by a successful retest.

Let’s swing by the nursery: Sugar gave us a last kiss goodbye last week and thus far it’s holding up nicely. So far so good 🙂

Copper – another LKGB and it’s proven to be pretty profitable. I think I’m starting to scale out a little here but it’s permissible to keep a few lottery tickets at hand for a push into our target zone near 3.52.

USD/CAD – not yet a setup but I wanted to put it on your map. If you are long from two weeks ago then you probably want to scale out.

Setups, we do have setups – please step into my lair:
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Corn – as you recall it screwed me sideways on the ST side today but I may just be enacting my revenge shortly. Just kidding of course – we keep emotions out of this game – that’s a sure killer. However, there may be a good setup here. As you can see it’s already aiming at the hourly NLBL and then there’s the 100-day and the 25-day that are on a collision course. If it can push above all that (especially today) then we may have a great window to be long here – after all the 100-day is still on the rise.

Cocoa – inside day + NR4. Keep it simple stupid and don’t overthink it. If you don’t know the rules please consult the cheat sheet.

USD/CHF – nice push higher here. But let’s get above the 25-day SMA and we can talk about a long setup – until that happens I’m short. Frankly, I’m hoping for a stop out as the long potential looks a lot juicier. But until it happens I’m short (but we are close as I’m typing this).

EUR/USD – my old nemesis which torments me during every visit at the ATM. My Christmas present would be to see it crash and burn right here at the 25-day but those are thoughts of wishful thinking and I must be long (yuk) until we see a bonafide breach and even better a failed retest. We’re not even close yet.

EUR/AUD – looking strong. One of those, be long at the 25-day and forget about it trades. I would however like to see that 100-hour start to point up here soon.

CAD/JPY – sitting on possible support here and the 25-day is meeting up to join the fun. We could have a basi for a launch higher. Let’s see if we get it. Watch the 100-hor for early hints – admittedly it’s been less than impressed by its existence lately. Sorry, when it doubt be long near support, right now we are a bit in limbo but it may be a good medium term position.

AUD/USD – possible support here at the NLSL – the 100-day was breached earlier today. This is probably where she either holds or fails – two more active days at the NLSL. Otherwise there’s just air below.

Bottom Line: Don’t get over exposed down here, we had great entries lately and it’s been pretty busy all around. Let’s not forget that we had quite a spike in volatility in the past week and that’s probably too delectable for the MM’s to pass up. Time to slow down a little and see where things are heading next. As the Navy Seal’s motto goes – the only easy day was yesterday 😉

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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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  • https://evilspeculator.com molecool

    Again, appreciate the retweets.

  • http://dartht.blogspot.com/ Darth_Gerb

    after a big move today,
    isn’t the next day more likely ..nothing?

  • Fearless

    Yes and no. Normally yes, the next day is usually consolidation. No, the potential for another big move in either direction had increased due to the Defcon signal.

  • AmazingLarry

    You’ve been working like a beat dog lately, Moleman. You asked earlier why the comments section has been thin. Part of it seemed to be summer doldrums but also I personally think when you’re more active in the comments, action in general goes up. So keep up the good work. 

    You threw me on the LKGB and SFSG there for a minute. Such a feeble rat mind, i have. 

  • BobbyLow

    We also have the FOMC Meeting Announcement at 2:15 PM Tomorrow Afternoon.  That’s usually good for some “Shits and Giggles”.   🙂

  • http://dartht.blogspot.com/ Darth_Gerb

    great.dam it, they’re front running the event!!!
    sell it off lower to worst case, and raise market if news “aint that bad”.  IMHO.

  • Tronacate

    ES daily looks very wollfe wavish…….could see that new high if that is the pattern

  • https://evilspeculator.com molecool

    So far so good.
    Last kiss goodbye.

    Sorry…

  • https://evilspeculator.com molecool

    Plausible theory. Which is surprising coming from you.

  • AMCabrera

    I feel like im wearing a thong and grabbing my ankles with vaseline rubbed all over my butt. im cutting being long aud/jpy and eur/jpy. Im cutting out the aud/jpy.

  • AMCabrera

    usd/cad daily will be hard to deal with uh. I foresee wobbles in that pair.

  • http://dartht.blogspot.com/ Darth_Gerb

    it’s the forum.  sharpens the mind. 😉

  • AMCabrera

    yea im trying again with the /es long

  • http://dartht.blogspot.com/ Darth_Gerb

    I’d give you a like, but Ewwww (bad visual!)

  • BobbyLow

    That’s just the market trying to play hide the salami with you.  

    I’m long both of these too but I’m going to hang in there until I’m stopped out.  I’m ordering some Sushi tonight even though I don’t like it.    🙂

  • Fearless

    This just in: Defcon alert on all major North American indices. ISEE call/put ratio is confirming, too.

  • http://dartht.blogspot.com/ Darth_Gerb

    I’d scream and run down the hall on fire.but didn’t you give someone a good talking to about intraday ISEE?
    isn’t it close that matters?

  • Curiousmind3861

    What criteria will activate a defcon alert? Sorry for the newbie question…

  • AmazingLarry

    Interesting hard bounce on the Russell off the 100 and 200 (couple handles away from each other). Broken lower support TL but still within bear flag. We’ve been here before.

  • Fearless

    Yes, it’s the close that counts. I am monitoring the situation as we speak. My Defcon alert signal is a bit different than my other signals. My other signals require the closing numbers; however, my Defcon alert signals only require certain conditions to be met, and they can trigger while the session is still ongoing. What’s different about the Defcons? Once it’s triggered, it will NOT go away for the session.

  • badflightrisk

    Doesn’t look like AAPL is going to make your 639 threshold as well

  • Tronacate

    And what does it mean???   Short and long term

  • Fearless

    Short term: good sized bounce coming.

    Long term: could mean the final low before year end (I am much less confident in this assessment now compared to last year’s LOY call).

  • Rightside_ot_trade

    Your new T for tomorrow morning could be a low

  • Curiousmind3861

    with a defcon alert, does it usually follow thru with panic selling before a good sized bounce??

  • Tronacate

    Thanks

  • Tronacate

    Fits with the wolffe wave type pattern……lines right up

  • Fearless

    It has one final hope – its RSI pattern is showing a possible “screw all you bears” move, and it is one of the top block trade accumulation names on Friday and today.

    Of course, if it doesn’t go green on earnings release, we’ll probably see $550 quickly.

  • Tronacate

    Define “good sized” ???

  • Tronacate

    The Wolffe wave combined with defcon would imply the low is in on a daily basis  it appears.

  • Tronacate

    Nice move on ZS off the 100hr sma…..missed it

  • Curiousmind3861

    back to 1440?

  • http://dartht.blogspot.com/ Darth_Gerb

    *Market Closed*

  • I Bergamot

    I put this up earlier today:
      Nasdaq A/D has been moving steady up from opening low, and didn’t cut fridays low.
    Open interest on ES dropped almost 100k in past two days. People covering shorts, but today’s change will be really telling.
    Also, TICK has a positive divergence with friday. And VIX. And 30yr bond still weak. And Dollar. And Fearless…
    As for Tron’s wolf wave… man, these things can play a major trick on you. Check out Wolf during summer of 2009. That thing just extended and moved around and finally blow up. Was such a pretty, text book wolf… Cost me alot of money too

  • bdoone

    Don’t forget Transports +.89% & SOX is green on the day.

  • Skynard

    What level Defcon alert are we at? Not looking pretty!

  • http://dartht.blogspot.com/ Darth_Gerb
  • AMCabrera

    yea needless to say Im out again.

  • http://dartht.blogspot.com/ Darth_Gerb

    but you’re still in the game right?
    You’re pretty good at discipline, and ignoring the Tube.

  • AMCabrera

    http://content.screencast.com/users/AMCabrera/folders/Jing/media/50517205-ff4e-4e1f-8e84-4b850a7a24ed/2012-10-23_1625.png
    Yea, well not in the /es.  I took out my eur/jpy and have place it a bit higher. so technically im out of the game.

  • I Bergamot

     If I remember Terry”s tutorials right, you need to move centerpost to lower low. I’m not an expert on T’s, but its hard to know where posts are before bottom is made.
    JM2C

  • AmazingLarry

    Dammit, my mind has gone to mush with all these red candles. Someone remind me how to superimpose the volume on the price axis in TOS, please. Just like Mole’s spoos chart above. 

  • http://dartht.blogspot.com/ Darth_Gerb

    ah, yes.
    but this is Gerb’s T’s.  highly unorthodox.  highly speculative.
    in this case, it’s a failed T.  the blue rectangle is hinting at a time for when the drop will cease.

  • AMCabrera
  • I Bergamot

     o, i got it. Thanks.

  • https://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤ø„¸  N E W  „ø¤º°¨ 
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • https://evilspeculator.com molecool

    Yeah, that 25-day again – it’s like magic!

  • https://evilspeculator.com molecool

    I’ll report on this tomorrow, which means early in the morning for you guys.