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Point Of Recognition
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Point Of Recognition

by The MoleApril 2, 2019

Barring a miracle at this point the bears are dead in the water. What sealed the deal for the bulls yesterday was an opening gap that not only remained unchallenged for the entire session but was also followed by a steady climb above VWAP all the way into the close.

You know me to never disregard any scenario but the odds of a return of the bears are now dropping into single digit territory. Plus any attempts to shake out the Johnny-Come-Latelies will most likely be met by a strong counter response near the ES 2800 mark as two months of churn have produced a boat load of technical context in the range.

I am now raising my trailing stop to the 4R mark with about 5R MFE at this point, hopefully allowing me to ride this snarling short squeezing beast all the way into the sunset.

What I found most interesting over the past week was the ever diminishing signature on the realized volatility panel. As I mentioned in previous posts: short traders were basically being slowly cooked to death, one bearish clickbait filled session at a time.

Also note how the SQN panel has managed to evade extreme thresholds (i.e. the 2.0/100 borders), thus avoiding buying exhaustion and driving the market higher slowly but steadily.

And then of course there is this little tidbit: Historically the month of April is the most bullish of the year for equities.

Enough said.

I once again have my eyes on gold as it has now descended back to its 100-day SMA, and is awaiting new instructions. Admittedly this threshold has not been touched/tested in a  long while, so let’s see what happens here.

I’m not eager to jump into spurious long contracts here but if gold gives me a good enough reason, e.g. a ST floor pattern, then I may risk a small position.

The Dollar also has my attention as it closed > a weekly Net-Line Buy Level last Friday. A push beyond it and above the early March spike low would put us on the way to DX 97 and beyond.

Here’s a fascinating medium term view (daily/weekly) on the USD/JPY. It appears that the current resistance line connects pretty well with the one that triggered a big sell off late last year.

Which if you think about it, puts us in a pretty interesting scenario: If it can push > it then it’s got free reign all the way into 114.5. On the other hand if it drops from here then we could easily see a revisit of the 106 mark.

I am not holding any positions here right now as I’m awaiting a bit of a response on the ST panel, which may be forthcoming in the next few sessions. If a juicy entry opportunity presents itself then I’m game – short or long.

Now I should of course point out that if your lens tells you that the Dollar is ripe for a correction then this would be a great spot to go short. I however am not certain that is the most plausible scenario as I’m waiting for the DX to point the way.

 


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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  • kim

    crypto is showing some momentum….

  • evilasevildoes

    ostk riot

  • ridingwaves

    sold 1/2 CL via UWT, trailing stop on rest is really tight…

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

    “but the odds of a return of the bulls bears”..

  • BobbyLow

    Good disipline RW. I’m still long and will wait for some weakness to flip but you did the right thing.

    BTW, Soybean Oil /ZL gave me a hard time for awhile. I was long-short and now long again. Might have finally caught a run currently up 33 Ticks.

  • https://evilspeculator.com Sir Mole III

    Ooops…

  • Sp00nman

    Until oil stops climbing, a sizeable rollover in the market doesn’t look likely.

  • Mark Shinnick

    “‘Fear of Missing Out’ Pushes Investors Toward Stocks” – A WSJ item.

    Fear.

  • ridingwaves

    it made it up to my sell point….pretty overbought right now and hoping for pullback but hoping is a tough trade….

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

    got to take the money on table right now….Gold is looking interesting per Mole’s chart above. I still half R sitting underwater but with thought of buying other 1/2 around here or a bit lower…

  • BKXtoZERO

    Nice… I went long oil, a little early, then took myself out for a sizable loss and have watched it climb ever since December back through my entry at 10 area to a double. Nice trade. You really have a long term view and staying power and patience. Excellent trade.

  • BKXtoZERO

    Mole, congrats on your 4R worth of slow cooked bear BBQ, (just the way you like it)

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

    “point of recognition” I thought we were going to get an EWT post 🙂
    Kudos on catching the EOM rally.

  • HD

    a $22B phone app? SNAP comes to mind.

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

    Hardcore bunch around here…

  • Sp00nman

    Man that is really disturbing..

  • ridingwaves

    more of trend view than long term, I will get out in a heartbeat on trend change….
    good to be lucky….AVEO scalping is much funner with all this nutty volume…

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

    When Mole says something…he means it.
    🙂

    https://www.youtube.com/watch?v=CxnaPa8ohmM

  • mSquare

    Maybe $66.6 is a good ‘lucky number’ price to buy it?

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

    it’s chicken. the stitches do make it look like Frankenstein.

  • HD

    Jan SPX +228, Feb + 82, March +36. April +8,,
    Good thing we’re at the early stages of the rally and not the end. –sarcasm–

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

    perhaps. as a trader, I’m curious if
    a) the gap will be filled
    b) if $75 is possible

    it’s a bit silly to drop TA on this given it’s so new, but I’m here to entertain.
    😉

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

    The Phoenix metro has 40% of it’s gas stations out of fuel.
    Prices have jacked up 60 cents over the last week.
    Apocalypse Now

    https://www.azfamily.com/news/fry-s-gas-stations-sam-s-club-experiencing-fuel-supply/article_78fafbb0-531a-11e9-bec7-77333048168b.html

  • BKXtoZERO

    Just to present what I see….. I am not that sharpest tool in the shed
    here but I still have my doubts that this is a runaway territory easy
    money long smorgasbord. It sure could be but to me I don’t see any
    really good kick offs where a gap is just so strong that it is an
    obvious point of recognition with lasting momentum. Now this rally
    advance trend line rate of ascent is rather steep, but overall, it has
    been a rather tortured climb full of gaps but no huge gaps that just
    run. To me I get the overall impression of weakness and fragility
    despite some record stats. So perhaps this will be a good test of my
    general perception skills. I am short Real Estate via DRV at 6.95, Short
    CL via DWT about half hour ago at 6.0, and long “some” TVIX here
    moderate at 25.5 area but very hair trigger with that damn thing for
    sure. https://uploads.disquscdn.com/images/419c6863220aef922ef45ab0e3dabb6165e3490743a03e3563de36e831b14e18.jpg

  • ridingwaves

    they should drop by ES a bit more, they are a couple months behind, your blurb via WSJ has me thinking about shorting now….

    ridingwaves 3 months ago
    the bulls are going to force sideline money into market, bull stampedes take 17-25 days to play out, day 14 today…..no recession, LEI is rising, not falling, yield curve is not inverted, just one series, junk bonds are catching bids, earnings season is here….SNP fwrd pe is 14.8….no bubble…..high but no bubble…..too many people thinking a move back to lows is now creating short covering rallies…..be nimble, wait for the waterfall…sometimes you have to climb high in the mountains before you see one…

  • BKXtoZERO

    also, taking out last weeks high by 10 points doesn’t seem like face ripping material. This may be the slow cook continuation that I need to learn. I just doesn’t look strong but perhaps it is…..

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

    BPSPX big chart.
    If I had to short, just couldn’t take it anymore?
    76.

    https://stockcharts.com/h-sc/ui?s=%24BPSPX&p=W&yr=5&mn=0&dy=0&id=p34026304719

    it’s one hell of a El’Capitan climb. but it’s happened before.

  • BKXtoZERO

    As I recall you were long CL for a longer term trade heading into November peak area and pretty much nailed that too in the 70s….. Not luck Sir…leading by example.

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

    Huh?
    oh!
    https://corporatefinanceinstitute.com/resources/knowledge/other/zombie-company/

    Radio Shack, now that was a zombie company.

  • Mark Shinnick

    Yeah….now let’s see…”Fear of missing out”….and overloading of Zombie firms with highest-ever probability of remaining zombie….

  • http://www.captainboom.com/ captainboom

    Got an original source for this? I would like to share with a friend.

  • Mark Shinnick

    This is such delicate and mental capital-intensive art….retaining a sane discipline about the nature and capture of volatility. How specialized and lonely it can get !

  • Mark Shinnick
  • http://www.captainboom.com/ captainboom

    Lol. My granddaughter would love that for Halloween.

  • Jason13

    Here I am just “metal-ing” around trying to eat my “wheaties”…..Started another Palladium short and Platinum long….long the “Golden” grain still.

  • ridingwaves

    the picture in slot canyon is sweet…

    30 million shares traded already in AVEO -139 million float. traded 1/2 float last 2 days- incredible volume-did nearly what I asked after selling AH last night…

    might seek 1.72-80 area…intense buying

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • Sp00nman

    Ya I realized that, doesn’t make it look less disturbing though. :p

  • Julie 35 – 25 – 36

    BAC and $TNX exactly at targets. Monitoring closely Also watching GLD target 119 – 120 .SPX could be a false breakout above March 21 high 2860 as 60 min chart overbought
    JULIE

  • HD

    That’s crazy! PHX is hell

  • Julie 35 – 25 – 36

    GG … What !
    JULIE

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

    Well, I feel cheap and used. But as a short seller, the 2860 level was a no brainer for a scalp long. Happy to have ~5 handles on the long side. Just to say I’m not a perma bear or toast or dead in the water. Lol https://uploads.disquscdn.com/images/d18f6201c81d44b3b6e721cd194478da5eab298cc23b2a2571bce29f61fab38a.jpg .

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

    Now as an “evil” speculator I have to wonder if after 2 posts bashing the dumb bears and a few technical levels as R we haven’t seen a decent April fools joke. I’ll give it 2 more days. https://uploads.disquscdn.com/images/d8e62da9a884bc0842218c6da56bf9f23baf43d8ca3b0ff28d36e859c3b85493.png

  • Julie 35 – 25 – 36

    HD Pension and 401K contributions.They could be sold into Monitoring closely
    JULIE

  • BKXtoZERO

    You are an unbiased ROCK. Kudos

  • HD

    What was the Jan 2018 high?

  • HD

    Ha. I should talk up the long side more but we have rallied all year and I ain’t the bag hodl’r…..

  • Julie 35 – 25 – 36

    2872 HD I showed a weekly chart last week with a resistance line drawn at that high and to watch
    JULIE

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

    off to lunch.

  • BKXtoZERO

    The bulls are twirling their guns around here…

    https://media.giphy.com/media/daU1v7kWPiqE8/giphy.gif

  • ridingwaves

    this is just sweet….I think Costa Rica is calling me

  • Julie 35 – 25 – 36

    AAII neutral position aligns with the CNN Fear and Greed Index neutral position. One item worth mentioning is the it takes Bulls to make a Bull Market or keep a rally alive JULIE

  • Julie 35 – 25 – 36
  • Julie 35 – 25 – 36

    Investor sentiment surveys work best at extremes and large neutral positions can be dangerous for both Bears and Bulls
    JULIE

  • Darkthirty

    Jeff Dahmer started out doing that to chicken……

  • nirav777
  • BobbyLow

    Hey Jason

    FBOW, I’m back with you in “Golden Grain”.

    In other news, after some indecision, Soybean Oil /ZL finally had a decent move today up 40 Ticks. Crude’s move upward might be getting tired and it’s at about a 4 or 5 Month High as of right now but Price MOMO will tell me when it’s time to leave. I’m also still long Financials and BIO so overall having a pretty decent day.

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

    They are twirling them in my face. There is more to this movie.

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

    wow, what happened at 12?
    signal went flat, UNDER vwap. odd.

  • Mark Shinnick
  • BKXtoZERO

    I have been watching the 2.0 Bollinger on 6 month for a signal. It is below mid band and yes 12.5 looks likely

  • Ronebadger

    Uh-Oh?

  • BKXtoZERO

    wow.. thanks.

  • HD

    But everyone is looking down?

  • HD

    I say that sarcastically. Imo we have a smarter market. The old schoolers still think everyone is a fade but clearly with the VIX down 25% and the SPX up 2% the shorters rule this market.

  • Mark Shinnick

    Great time to be alive….must be like certain moments…just before the last impulse to pull the trigger.

  • HD

    Basically anything you can look at has been bullish equities and correct.

    SPX +$1

  • Ronebadger

    SPY volume 33.4Mil…anyone concur? Kinda low…huh?

  • Mark Shinnick

    Oh…so much confidence 🙂

  • Sp00nman

    Ya very low volume today. Sure seems like the bulls are getting tired.

  • Sp00nman

    I saw this posted as well. Not sure what to necessarily make of it, but it does seem like a lot of folks have jumped on the short vol trade. Gotta wonder if they’re hedged for tail risk.

  • https://evilspeculator.com Sir Mole III

    We are getting there. But recall that VIX sell signals have been spotty over the past few years.

  • Jason13

    Right on Bobby. Join the dark side. I’m thinking Coffee is looking very good for a long. COT info has hedgies heavily short so potientially good spot to buy. They got screwed on Palladium (80% was long PAL…hehe) so why not screw’em on Lattes.

  • Jason13

    Like the Soybean call. The time is right.

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

    My Dad had a hideously extensive memory of everything in his and (by extension) my life. Excruciating detail from his childhood on through 86 years of life. Very annoying, he could quote verbatim any stupid thing I ever said or did.. I’ve never met anyone else with a memory like that.

    I can barely remember what I had for supper last night, never mind what the neighbors cousins that you met once in 1936 when you were five years of age were named.

    It was only in the last couple of years of his life that he began to have to dig and struggle to recall small details from 70-80 years before.

  • https://evilspeculator.com Sir Mole III

    Which is why the futures continued to push higher overnight…

  • https://evilspeculator.com Sir Mole III

    NEW POST!

  • Sp00nman

    Yep crow isn’t tasting so good this morning. Market has just been melting up. Nice trade!

  • nirav777

    and now……