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Trading POMO 101
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Trading POMO 101

by The MoleDecember 5, 2010

And now for something completely different. Earlier last week a generous soul sent me the Excel constructs for that coveted POMO rolling total chart, and I decided to make it the theme for this weekend post. So, I’m going to show you all my brand spanking new chart – but if you want to know what it all means you’ll have to either wait a few days or log in now as a subscriber:

The cyan regions mark delays in market response to a Fed liquidity reversal. The left axis is in Billions – which means the current total is 94 Billion – the right one is the daily close of the S&P 500. Okay, now I have given this a lot of thought and I’m about to dump it all on you:

As you know I am keeping a close eye on the POMO (and TOMO) auctions – so I’ll be updating this chart on a regular basis. Let’s start off with a general thought about this chart. I think at best it shows when to get the hell out of dodge. Which was earlier this fall when they ramped this thing up the bears’ collective asses.

Basically, this is the way I see and plan to use it: Consider the relative rolling POMO total to represent a market bias – if it’s near zero the tape may actually behave like it used to. Once that number pushes hard into positive territory (and now extreme/record readings) it represents an influx of liquidity that is extremely difficult to bet against. In other words, a zero reading means there is little to none Fed monkey business (unless of course they are using other liquidity windows, but let’s not over complicate matters). A positive reading means that there is downside liquidity resistance which most likely will diminish the magnitude of downside corrections. A negative number means the Fed is draining the swamp and that there is upside liquidity resistance that limits moves to the upside.

Now, I would be very cautious about using this as a general trend indicator – when it comes to trading context is everything. Thus you must correlate it with something context specific that represents the general state of the market. In my own case that is my trusted collection of momentum and general trend indicators. The Zero is one of them – but there are others in my arsenal as you know.

Example – Neutral POMO 20-day rolling total:

Scenario 1 – Market in oversold territory, expecting downside correction:
Since the rolling total is near the zero mark then taking short positions is probably a reasonable approach.

Scenario 2 – Market in neutral territory:
Just stay out.

Scenario 3 – Market in overbought territory, expecting an upside correction:
Again, the rolling total is neutral, so we trust our momo indicators and go long. Moves may not be huge but tradeable.

Example – Positive POMO 20-day rolling total:

Scenario 1 – Market in oversold territory, expecting upside correction:
For some reason the market was permitted to sell off – most likely the big boys wanted a good dip buying opportunity and it was the retail schmucks (that would be you) who were left holding the bag. I think, depending on the amount outstanding (let’s say $20 Billion +) going long here is probably very good medicine.

Scenario 2 – Market in overbought territory, expecting downside correction:
Here it depends on how ‘positive’ we are as well as where we are heading. If you look at 2009 you will see that rolling total actually peaked in April and then dropped and then slowly started dropping until it reached zero by late March 2010. Which – not so coincidentally – was pretty much exactly where equities topped (until most recently). So the lesson learned is that the direction of the signal line does not seem to matter, what however does matter is its value. To make this even more clear (because it’s important) let me point you at the current reading, which now stands at a rolling 20-day total of $94 Billion – wow! That’s a lot of coin, especially if you can leverage it up by a factor of 100. The sad truth (for the grizzlies) is that it may take months to work that off and that any downside until that happens will be extremely limited at best and perhaps non-existent at worst.

Example – Negative POMO 20-day rolling total:

Scenario 1 – Market in oversold territory, expecting upside correction:
That’s pretty much the inverse of the Fed buying in an overbought market. As the Fed is most likely draining the swamp any upside should be muted. Trade small and divide your target range by half. If you trade options consider rapid moves in volatility – which means either selling it or at least some clever option spreads.

Scenario 2 – Market in overbought territory, expecting downside correction:
That’s where the real fun begins and we should be so lucky. The Fed may again be hell bent on sending Congress a reminder on who’s really running the show. For some reason retail schmucks (yours truly) and less talented funds bought the last dip and burned a few shorts in the process. Just like in 2008 I would be very tempted to go short here – in particular if the Fed is continuing to reduce the rolling total into more negative territory.

And there you have it – your POMO road map. Use it in correlation with some of the other indicators we discuss here on a regular basis and you should find yourself on the right side of the long term trend.

Wait A Minute!

So, how does a record total on the POMO side contrast with record bullish readings over on the ISEE Equities chart? Damn it – I knew you’d ask that. Quite frankly – that’s a tough one. The best answer I can offer is that we may see a rapid reset here – a quick drop in the next four to five weeks. But when it comes to a more meaningful and painful correction of long term overbought conditions the jury is still out. With all that easy cash floating around I have a hard time imagining the SPX pushing below its 1000 mark.

However – if it happens – if we see a continued influx of POMO cash and the market actually tanks and is unable to snap back quickly. Well that, my dear stainless steel rats, would be a complete game changer and one that would basically mean that we had finally reached the end of the road. And that would be a very bad day over at 33 Liberty.

Moral Of The Story

Fucking Prodigy sez it best:

The writing is on the wall – indeed…

Cheers!

Mole


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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  • amokta

    Seconds away…round 1

  • http://practicalt.blogspot.com/ Gold_Gerb

    WTH is cyan?
    I'm colorblind you fool!
    😉

  • http://zstock7.com/ z stocktiger

    Amazing how the brown line shooting up late feb, 2009, produced a 8 month bull trend…

  • http://zstock7.com/ z stocktiger

    I got of of ZEUS longs one day too early.
    Here's followup chart
    http://zstock7.com/?p=3761
    I'm hoping I can get back in at the 22's

  • http://zstock7.com/ z stocktiger

    See how the brown line shot up in FEB 2009…That was followed by an 8 month bull trend…

  • http://zstock7.com/ z stocktiger

    Man molecool, what an interesting observation, about POMO…I better quit shorting next 8 month's.

  • https://evilspeculator.com molecool

    Join the club – the highlighted periods – that's all.

  • https://evilspeculator.com molecool

    Kind of my point. Prechter is again hoping for 'one last push up' after which the tsunami is supposed to be hitting. Well, IF he's right then equities would have to ignore a record influx of POMO cash. After having watched this game for several years now I remain extremely skeptical about this possibility.

  • convictscott

    Elliot wave theory dates from a long time ago, and does not consider the possibility that markets can be large scale supported like this. It also fails to consider the highly correlated nature of todays markets (historically unprecedented) where equities can have a perfect bearish wave count and for example the AUDJPY could ramp, triggering a short squeeze in es futures, causing a chain reaction. IMO the evidence suggests that this is a market situation where several long time working theories have been invalidated due to massive influx of fake liquidity.

    Dow theory non-confirmations no longer work either, which shits me to tears since its a major part of what I used to do. Dow theory was one of the most reliable forms of TA before 2 years ago, and had been forever. Actually wave counts used to be a major part of what I used to do as well…. adapt or die, I say!

    Fuck elliott wave, its dead to me

  • Joe_Jones

    Fully second that. EW is based on a non-manipulated market. That is no longer the case.

  • https://evilspeculator.com molecool

    Yup – the market has changed and we are seeing manipulation on an unprecedented scale. I feel bad for Prechter and his crew – after reading his books I realize that he must be crushed for having underestimated the Fed's reach and power.

  • stuped
  • stuped

    i followed ew for 3 years till i figured out it was taught wrong…..after making corrections , i am back in the ew boat

  • http://zstock7.com/ z stocktiger

    Hi Molecool, here's where I came up with the idea, no shorting next 8 month's
    http://zstock7.com/wp-content/
    POMO and it’s consequences to the price of the indexes, going forward.

  • https://evilspeculator.com molecool

    If I may ask – what corrections did you make? And how has your trading changed since?

  • bluprint

    Based on my understanding of EW, the problems stand out as obvious. EW is supposed to be based on market sentiment, right? How people feel, etc. But it makes no consideration for nominal vs real, which is where pomo comes in. Double the money supply and, other things equal, prices double. Do that in an environment where prices would go down 50%, then prices wind up flat. Do it over time and any reality of EW theory gets completely covered up, even if it IS right. Unless you can adjust out the effects of pomo or other such non-sentimental factors.

  • Joe_Jones

    “EW is supposed to be based on market sentiment, right?”

    I don't follow you here. I thought EW is based on price and time only.

  • psycho_puppies

    What market has never been manipulated?

  • http://www.hervey-bay-holiday.com kea11

    The linkages within all markets are so pronounced. Liquidity seems to move around the globe like the tides – and the market rewards the brave with regard Support and Resistance, in that if you're not in position ahead of time, the ship has sailed in respect of gaping Opening Gaps.

    This market is all about insiders IMHO and if you can tune into their brain all is well. As always, it works until it doesn't and any closed system will only work while it's closed. The Indonesian Tsunami swamped the systems until they didn't and I'm sure the same can be said about the market at some future point.

    A 400 pip retracement in the AUDUSD since the 1st, making a 800 pip round trip since the 22 November and a similar mirror image in the AUDJPY makes a mockery of any desire to project the future. The Hand of God does not appear to be adhering to any elegant pattern in the short term. I have been watching the H&S pattern on the Daily AUDUSD; it still seems to be in play but only just.

  • 99er
  • Joe_Jones

    QE changed the rules

  • http://www.hervey-bay-holiday.com kea11

    There reach and power is unprecedented. This has to be an indicator of how much the Global power brokers had to lose if they let the financial system fail. The vested interests must have been huge for elected politicians – not just in the US but Globally for this to proceed unopposed.

    The moral hazard is significant and if the ball is dropped now I doubt that a Nuclear War head would have as much impact on many of those power brokers with their hand in the collective Till. The World has certainly changed for the time being.

    It amuses me that Wikileaks is coping a hiding from the press and politics in an effort to discredit their actions within the mind of the greater masses; while the real betrayers are hidden behind a wall of silence and slight of hand called thought manipulation.

    When Convictscott states that he has lost confidence in Dow Theory as well, I suppose we shouldn't lose faith in these predictive indicators but treat the current situation as the exception that proves the rule; the effects will eventually be cleansed from the system.

  • psycho_puppies

    OK whatever… so Fantasy Land is reality and we can print ourselves to prosperity?

  • psycho_puppies

    You cannot rewrite history and still have reality.

  • Fearless

    I used to trade based on my timing charts, which allowed me to stay the heck out of financials when I started trading in 2007 and just stayed in commodities/mining until summer of 2008. I avoided the Lehman crash and shorted the major one before October 6 2008. I front ran again in February 2009 to catch the final stages of the falling knife and went long less than 30 DOW points from the exact bottom. I also front ran May 2009 decline, the June 2009 decline, the October 2009 decline.

    What triggered me to make major adjustments was February 2010. It was December 2009 that I started noticing the most blatant manipulation right in front of our very own eyes. I didn't take it seriously until February 8 2010. The market totally went the opposite direction than my timing chart was indicating, and I knew I had to make adjustments as I knew right at that moment the market was never going to be the same again. I subscribed to Zero shortly after the April top after speculating the GS lawsuit timing (I just got lucky there). The Zero showed me what I had believed happened since December 2009 – the blatant tape banging by the biggest fishes.

    You make adjustments and you move on. Jesse Livermore couldn't make adjustments to his new market after 1933 and ended up losing all of his life's hard-earned efforts. To me, EW was f—ing useless to begin with. Many TA methods predicted the 2000 crash and the 2007 crash. For Prechter claim that he called them and to think that the market must follow a set of EW patterns is just lunatic. Taking long term positions in the new market is just f—ing suicide. This new market will have lots of wild swings, and eventually traders will have to guess and front run the moves as they will be done during overnight sessions. My goal is to get as many coins as possible before the system becomes completely useless, and run on my bank, collapse the f—ing system. Oh yes, I possess PMs and a piece of farm land.

  • stuped
  • Brishort

    Nice one above Mole, I like it a lot. New and fresh approach, yet sufficiently researched and thorough to think outside the box with contextualization and steering clear of the too simple shortly drawn conclusions. Thanks.

  • gsavli

    actually… yes, you can prosper on the account of future generations.

    i lived once in such a country and it didn't end well.

    and there's more to this “free money” – people get used to this idea and mentality changes. before you know it, those who get free money, stop working. i mean, why would they, if they are getting money for free (in reality it's always from the others – in your case from today's and future taxpayers). and then also those who give money away, stop working/producing – i mean, why would they, if anything they do, is immediatly taken away from them and redistributed elsewhere.

    in other words – why the fuck would bankers do anything, if they always get some sort of free money and why the fuck would anyone work hard if they are taxed like 80% (by higher prices and by direct taxation).

    and in case you wondered – this sort of money redistribution from one pool to another, without asking the recipient to do anything in return, has a name – it's communism. now you know, why these things have to end up badly.

  • https://evilspeculator.com molecool

    Thank you! I merely drew conclusions based on prior observations and empirical research (i.e. the chart in context with indicator observations). Now this is not a Rosetta Stone but I think over the long term it should provide a clear edge for market participants. I would very much enjoy seeing you guys add your own charts and correlate it with the Fed's activities. We can really drill into this – let me give you an example: For instance VIX buy signals during positive POMO periods vs. VIX buy signals. Zero signal performance (long/medium/short) during positive (and hopefully eventually) negative signals. You get the drift….

    Anyone up to the task?

  • https://evilspeculator.com molecool

    I recognize your sarcasm and don't blame you for taking the other extreme side of things. NO, obviously I am NOT saying that. But what I AM saying is that Prechter has been wrong for a long long time now and being intimately familiar with his work I can confidently say that it's because he under estimated the power of the Fed. He stated that the Fed would be 'powerless' in the face of a bursting multi-trillion Dollar bubble. Now, define 'powerless' – it's all semantics after all. He will tell you that measured in 'gold' the S&P never recovered from the 2008 crash – and he would be right. But I would tell you that most subscribers of his would not care about that and had expected the 'nominal' value of the SPX to be below 667 by now. Obviously we are light years away from that and if you held puts to that effect you have been getting killed. Just look at the poll right here on the left sidebar and reality will sink in quickly.

    Eventually the Fed will lose this game – but by then all the fat cats will have long cashed out and it won't matter anymore. Most likely the Dollar will be worthless by then anyway and nobody will care anymore because it doesn't matter if you have 1,000 or 1,000,000 worthless Dollars.

  • https://evilspeculator.com molecool

    I'm split on that one actually – the tape was heavily manipulated back in the 20s and 30s – just read Livermore. But maybe today the game has become too sophisticated. But does it matter what the reason is? Fact is that vanilla EWT has provided little to negative edge in the last two years – as traders that's all we need to know. This is not about Prechter bashing – none of the other EWT pundits are doing much of a better job IMNSHO.

  • https://evilspeculator.com molecool

    So, what do I wake up to every morning then?

  • Joe_Jones

    The problem I see with the top chart is that the bond market is not taken into account. When the 10 years goes above 4% due to POMO “to infinity and beyond” expectations The Bernank will have to create another flight to safety.

  • raised_by_wolves

    From Wikipedia:

    The Elliott Wave Principle is a form of technical analysis that investors use to forecast trends in the financial markets by identifying extremes in investor psychology, highs and lows in prices, and other collective activities. Ralph Nelson Elliott (1871–1948), a professional accountant, developed the concept in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves. Elliott published his theory of market behavior in the book The Wave Principle (1938), in a series of articles in Financial World magazine in 1939, and most fully in his final major work, Nature’s Laws – The Secret of the Universe (1946).[1] Elliott said that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable."
    Elliot Wave Theory is based on social mood/investor psychology.

  • http://www.hervey-bay-holiday.com kea11

    National Inflation Association reply to Bernanke on 60 minutes:http://goo.gl/toaGW

  • psycho_puppies

    You’re living in history. The museum has come to life. We all want to know what year it is.

  • https://evilspeculator.com molecool

    I would have picked Twilight Zone episode instead. Quite frankly – had you told me about the shit that's going down five years ago I would have laughed in your face. It's surreal to the max.

  • raised_by_wolves

    When you eliminate money altogether, however, people do necessary work for calories and, if they have a surplus of calories, people do optional work because they think it will improve their quality of life, because they derive meaning from it, because it satisfies their intellectual curiosity, or just for the hell of it.

    A lot of the work that I've done has been for free. (1) I have not made any profit doing traditional black and white photography, nor do I plan on it, yet I spend at least 10 hours a week doing it because it is enjoyable, and I want to be a master of the craft. I rarely show the work to anyone else, and I have never tried to get into a gallery though I know I can. This work really isn't for other. It is for me. (2) I do photo editing for others for free; whenever I come across an picture on the internet that is generally well composed but has some specific flaw that I think I could correct, I do it, and I send it to the owner of the site. I have never gotten paid money for doing that. I spend about 3 hours a week doing that. (3) I have not charged any money for copy-editing; if any friend is writing a paper or article on a topic of interest to me, I want to edit it. I spend about 2 hours a week doing that.

    I don't even do these activities to improve my resume.

    Along the same lines, I want to learn how to brew beer sometime in the future. I would plan to give beer away for free to my friends. I guess I would get paid social currency by people liking me more, but wouldn't be the primary reason why I would do it. I would do it because I want the challenge of creating a quality beer. I would give it away to get feedback on it. I would be constantly working to improve the quality of the beer.

  • https://evilspeculator.com molecool

    Good point – I'm watching the TNX like a hawk and the inverse trajectory of the past few months had me worried. Well, let's see what happens at the magc 10-year mark – I expect to see that one early next year.

  • raised_by_wolves

    In practice, what communism and capitalism have in common is that participants primarily do work for a powerful minority. It seems to me that capitalism has done a better job for the powerful minority by providing the illusion that people are working for themselves.

  • psycho_puppies

    I’m going to have another beer and than will be unable to type but… Apparently, we can all buy gold and silver and the Ben Burnak will take care of us. Mole, as you go to sleep tonight think about this (sorry not about big titty girls) is it strange that you and TK are somewhat both capitulating?

    I’ll check back with you in the late AM.

  • https://evilspeculator.com molecool

    Mmmmh…. big titty girls…. yummie…

    Capitulating? NO, that happened a year ago, mate – ancient history. I take it you have not been around here much 😉

  • raised_by_wolves

    When the Fed has injected liquidity, take long signals; when the Fed has drained liquidity, take short signals; when the Fed has done neither, take long or short signals depending on what indicators are showing.

    The Fed has injected liquidity. So, take long signals.

  • raised_by_wolves

    Silver (candles), silver to gold (yellow), and silver to equities (cyan) have all made new highs on the daily chart.

    http://content.screencast.com/

  • Pingback: ERNEST()

  • Hungry_Joe

    Just like there was a time when Mole went berserk when GMak said something less than charitable about the Elliot waves. How times have changed. 😉
    Btw, Silver making new highs this morning.

  • Bob the Horse

    And where do you think equities will be by that stage?

  • convictscott

    Interesting chart 🙂 BTW I got stopped out of silver on the open this morning my time.

  • convictscott

    Im all over this. This is a very interesting concept !

  • convictscott

    Its not that I've lost confidence in dow theory, its that objectively the evidence no longer supports it.

    I used to trade 3 dow theory based setups

    Setup 1) sidebyside3d – a market fails to make a new high while a related market makes a new high. Short the weaker market on break of the low of the bar, with a stop 1 tick above the high. eg es z0 make a new high on friday, not confirmed by spx. eg silver made a new high on Friday, not confirmed by gold.

    According to this setup there is a short setup if es breaches the daily low. I'm not taking it.

    Setup 2) Color3d – 2 related markets have a difference in the color of the real body, ie one black one white. Short the weaker of the two on break of the daily low, stop 1 tick above the high.

    Setup 3) Spike3d – same as sidebyside3d except that one related market breaks an existing spike high and the other does not.

    Go back a few years and you will find this setup in virtually EVERY MAJOR TOP IN EVERY MARKET. You are in Australia, take BHP and RIO charts side by side (weekly charts will do), find the times where there is a difference between the two of them, and *bang* thats the turning point.

    What I'm saying is that this shit was *reliable* Find a market with one month contract of futures not conforming, and the top was in or about to be in. See silver and gold behaving differently and get the fuck out.

    This setup averaged real world for me over 72% wins.

    It *no longer works* It has *negative* expectancy,

    the last 3 month period I used it was running at 35%!

    Thats how drastically the markets have changed. Its not a question of “if it was priced in gold it would all be sweet” we are talking about a totally different animal here

  • convictscott

    And thats the important point, none of the other EWT people do much better, even the bullish ones like PUG really are no better. I truly wish that EWT still worked, evidence says it doesnt.

  • convictscott

    Just a random thought since someone mentioned GMAK. If we break to new highs here, it would be a good idea to dust off the impentrable Tom DeMark books. His TDST countdown setup is an *extremely* reliable indicator of when to get out of a blow off top overbought market.

    Fucked if I can understand it, so dont have much confidence trading it, but have personally used it to count tops before and its voodoo witchcraft white man magic.

  • raised_by_wolves

    Thanks. I figured you were stopped out. Will you go long now?

  • 99er
  • 99er
  • 99er
  • captainboom

    I did so enjoy GMAK's TD commentary, alas…
    Anyway, I've turned on the Sequential indicator on TOS so I can watch the turns. /ES tends to turn right on the money. Take a look at this morning's 5 min chart on /ES. Volume picked up about 3 AM, the yellow 9 count buy setup was completed around 3:30, and the buy countdown of 13 (in red) completed about 6 AM. Turned right there, and then a sell setup happened between 6:40 and 7:15 (in green).

    http://www.screencast.com/t/oP

  • stuped
  • stuped
  • AlohaBear

    Question looking for sectors that are similar such as Railroads or Agriculture any body have suggestions like groups of 3 to 8

  • volar

    I know it is intraday…. but 375 ISEE Equty… good sell signal intraday. And if we close north of 250 i am adding to my small short ES position as this is just unsustainable.

  • https://evilspeculator.com molecool

    Boy, quiet in here – what, is everyone out shopping for X-Mas presents?

  • 99er

    There may be a problem with Disqus since I've been unable to post a chart. They suck blocks.

  • amokta

    There were some high-value comments earlier in the day to make up for it

  • OldChicago

    A strange day. I still can't figure out the bullishness, but it is there. Dips are being bought. Some tech recovered before open. Indexes were up earlier, ahead of Euro, when USD isn't moving. If we can't get the index close below Friday, tomorrow might see fireworks. JMO.

  • Fearless

    Mole, I got a different idea on how to use the ISEE readings. I am going to start collecting data on the actual number of calls and puts purchased by the retails. I will do a running total of the options and purge at each opex. This way it gives a better representation of the C/P ratio readings, so a 400+ reading on a light volume day won't skew the results during a heavy volume 150 reading week. I will let you know in January how this is working out.

  • SW6

    Stuped, when you say EW is taught wrong, who are you talking about? Do you mean that the instruction given in Frost and Prechter's Elliott Wave Principle is flawed; who are you pointing a finger at?

  • amokta

    Quick question – if you 'sell-short' 1000 shares of a stock, and the stock moves from 2 to 20000 overnight (company strikes oil), will a contigency 'but-to cover' order be of any help! – selling short is not without risks – maybe spread-betting with guaranteed stops is safer?

  • http://pulse.yahoo.com/_VSVXKYHCX5MPKIR6C2MRTTL42U Celtic33

    Time to go Short I think

  • Fearless

    “if you 'sell-short' 1000 shares of a stock, and the stock moves from 2 to 20000 overnight (company strikes oil), will a contigency 'but-to cover' order be of any help!”

    In that case, you're SOL.

    My rules:

    -Never sell short any stock under $20, especially penny stocks.

    -When selling short, buy ATM call options to protect against violent breakouts. You can still profit on the call option side should a violent breakout occur.

  • BobbyLow

    I'm assuming you mean contingency “Buy to Cover” order. In your example if you had a Limit Buy to Cover it is possible to blow right through your Limit Order Price and you would be screwed. If you had a Market Stop Buy to cover you would get covered but in the case of a gap down you would get covered at the gap open price or worse.

    If protection is what you want the best protection would be buying Call Options to protect you against getting whacked.

  • stuped

    i did 3 yrs ew by the book….finally started my own way….flaws ew….got alot of those….lets take an irregular wave…..notice how ew would have a 12345 up count and complete….then they do abc count that yeilds a higher count then where the 5 ended….that is bs correcting a bad count…..i do not use triangles or flats or any of the wording th;at is taught….all you have to do is count…and nothing else matters…..i like prechter, but i do not follow his count….when i post a chart i remove all my trendlines and reasons that i put a number where i put it….i really dont want to disclose my method , but i put the numbers where i am told to do so….and you have to be prepared to constantly change you count….it keeps you knowing where you are….stops are my best friend….if i am to point a finger, it is direct at elliott….his ideas are great but times change and we are electronic now, not paper at the end of the day….

  • amokta

    Thanks – my usual (UK) broker doesnt do 'short sell' on either UK or US stocks, so never explored it

    However, my optionsxpress account does, so just investigating!

    Thanks for the tip – re call protection (you never now!)

  • Eva S

    The biggest problem with Disqus is privacy and that you don't know how many creeps have access to your email address. Today some weirdo was trying to access my Disqus account and change the password multiple times. When this happened to my gmail account, they sent me the creep's IP address right away. I asked Disqus to keep track of the IP address and to improve privacy. Thank God I did not use my work email.

  • amokta

    I always use a separate 'junk' email add for the general internet purposes, while protecting other email accounts for 'official' business

  • volar

    if you get the historicals- please let me know wprosser@gmail

    All i have is that damn ratio. I did the math with the CBOE data that way it it does clear things up.

  • amokta

    Thanks – will bear this is mind

    Also, noticed on penny stocks the 'spread' is quite wide on optionsxpress, but from other sites (ihub) the difference in bid/offer, although wider than mainstream stocks, is not as wide as optionsxpress make out. Limit buy orders are what the doctor ordered here i think!

  • Eva S

    Good idea. 🙂 We are still in the Wild West phase of the internet.

  • amokta

    Anyway, do you just trade individual stocks-picks (using direct buys, or options), or do you trade the main indices in themselves

    I think trading stocks (perhaps skewing balance of short or long set-ups depending on prevailing overall market may be more rewarding than trying to 'guess' which way the s&p or dollar or gold is going from one day to the next, and trading indices?)

  • Eva S

    Stocks are much easier for me than the whole indexes. But I do looks at the indexes for the overall mood of the market, and then at individual sectors.

  • http://iberianviews.blogspot.com/ catracho

    Silver…everybody jumping on the bandwagon..but short term, history says “better places to go long”?
    http://www.screencast.com/t/76

  • amokta

    I think i may do the same, once ive figured out a stock screening system etc

  • Eva S

    It's definitely a stock picker's market.

  • https://evilspeculator.com molecool

    Careful with commodities. I think we are close but when trading contrarian *always* be ready for a final push up.

  • Brishort

    Mole disqus keeps hanging my browse3r, but only only es.

    I see emails but nothing on the web.

  • SouthernTrader

    I know the close is what matters, but ISEE still hanging around the 300 mark. If they push this market up into the close, we could have another 300+ number.

  • BobbyLow

    Looks like pathetic volume and not too much Bellows necessary via POMO action to set a little fire under this market.

    VIX at LOD, RUT pushing at HOD among others.

  • https://evilspeculator.com molecool

    I'd love to see that!

  • EvilTrader

    Yes.

    When it becomes too obvious, thats when the early shorts get squeezed before a down move.

  • https://evilspeculator.com molecool

    So, you are basically doing an open interest total on the ISEE Equities?

  • https://evilspeculator.com molecool

    If I may sum up the sentiment: Nobody wants to be short here, especially going into the holiday season.

  • Eva S

    That's the correct holiday spirit! 🙂

    BTW, I will be attending the Christmas market in Cologne and possibly a couple other towns (Nuremberg, Berlin). German Christmas markets are the best!

  • https://evilspeculator.com molecool

    Lucky YOU!!! Yes, German/Austrian Christmas cannot be beat – period.

  • malverd

    TOS lagging for anyone?

  • amokta

    Ok, my silver lungs are doing well – is it time to take prufits, or hold?

  • Fearless

    In a way, yes. I think that will be a more accurate measure of retail sentiment, don't you think?

  • Eva S

    Physical silver ETF (PSLV) doing even better than AGQ.

  • amokta

    You should have told me this before! (i only knew about SLV, ZSL, AGQ)
    My AGQ is doing ok, but at least with PSLV, you have something tangible (i assume) if the price crashes, or at least it doesnt suffer from lossage (although might have fees?)

    p.s. how come PSLV is doing better than SLV/spot silver

  • Eva S

    That's a good question why it's doing better. They probably have some info here
    http://www.sprottphysicalsilve…/

    It's a recent ETF, just found out about it last week. 🙂

  • amokta

    Thanks 🙂
    p.s. PBR, SODA, OXPS doing ok again !

  • convictscott

    White man magic

  • convictscott

    Hell yes I will, on any valid long setup

  • Eva S

    re: Laptop noise. I scanned my computer for viruses and malware, and it did find some “Trojan horses”. Plus I took it outside and sprayed all the vents and openings with the computer duster. Result: *unbelievably* quiet laptop. I cannot believe the difference!

  • rg64

    don't short a final commodity push ever. It can go way beyond what anyone thought possible.

    Also don't short santa and the markets in Dec. ever. This has upside written all over it my evil friends

  • gsavli

    i went short some NQ here. it looks kinda weak here, despite apparent ueberbullishness, this thing just can't make it to new highs. will cover at breach of 2194.

  • http://pulse.yahoo.com/_VSVXKYHCX5MPKIR6C2MRTTL42U Celtic33

    Buy WNR, major short squeeze about to happen. on it's way to $12.50

  • raised_by_wolves

    Actually, I linked you to a ZeroHedge article about Sprott's physical silver long ago.

  • SW6

    hmm, sounds like you did a shitload of work my friend. Your system sounds highly nimble and adaptive, the very thing Prechter isn't. You innovated but EWI refuses to, good for you. It's very interesting that you consider EW patterns to basically be noise and that all you do is count.

    It's too bad for the rest of us that you will not disclose more of your method, but I can understand not wanting to possibly lose your edge.

    Also, you haven't posted in a while nice to see you here again. 🙂

  • volar

    even if we do a 280- that has only happened 3x and 2 of those times were within 1 trading day of today!
    Also there is a 0.2% chance of being >270.

    I like a 5 day weighted average with 20 day 2 stdev bollinger bands…

  • 99er

    Silver
    Now that's a long dong.
    http://99ercharts.blogspot.com

  • AlohaBear

    LOL everyday same Idea where you get in

  • raised_by_wolves

    p.s. how come PSLV is doing better than SLV/spot silver
    There is demand for the (real or perceived) added security of PSLV versus SLV.

    Personally, I still trade SLV options.

  • raised_by_wolves

    My first memorable trade was shorting WAMU at two dollars and something cents. While it did head toward zero, it first jumped to $4. That pretty much blew me up.

  • raised_by_wolves

    Hehe, I love that description.

  • 99er

    ES
    Okay bears….
    http://99ercharts.blogspot.com

  • Fearless

    Tell me about it. I shorted JPM at $20.2 on February 20 2009 aiming for the March bottom (I actually knew when the exact bottom was going to be put in, way back in October 2008, when my timing chart still worked). JPM went to $24+ before heading for $15. I got stopped out at $24…. It f—ed me over totally.

  • SW6

    Is it better to short a few shares on the initial position and then add as you see the price going your way?

  • Fearless

    Yes. Hard lesson learned last year.

  • BobbyLow

    Fearless,

    When you go Synthetic, do you ever go unbalanced meaning that if the underlying goes against you add more Options on the other side to change the dynamic of the trade?

  • Fearless

    Yes, I have done so on several occasions. It depends on how I want to be positioned; if I short in a clear uptrend speculating top (which I don't do too often for obvious reasons) at the Fib extension levels, I'd buy double the amount of calls. Should the stock bust through the Fib level, I'd sell half the calls to make my call purchase free, while leaving the other half protecting the short. I would then decide whether I want to sell those protecting calls at the next Fib extension and swap for higher strike protection or go double call again.

  • https://evilspeculator.com molecool

    Affirmative on both sentiments.

  • Fearless

    Hmmm…, interesting… One of my custom indicators seems to be telling me the market is about to get a heart attack.

    Meh, I'll fade it for now. I'll give it more serious thought if 1207 is broken.

  • BobbyLow

    Ok. Thanks.

    One of my trades was being Long Bonds by being Short TBT. By my rules, I should have been stopped out last Thursday. I worked around the stop by playing with my Long Calls instead. As of right now it looks like the right move.

    It seems kind of weird being Long Bonds and Gold at the same time. But this is the crazy market we are in. 🙂

  • anotherone

    Fascinating that SPY is hitting resistance at the 61.8% retracement of the fall from the Oct. 07 highs to the Mar. 09 lows. Fascinating.

  • Huck

    Hope your indicator is right. I sold some longs today to take a swing at it. Short TF @ 760 looking for 740 and perhaps 725. First short entry in a couple weeks. We'll see.

  • Fearless

    I haven't gone short except for my synthetic long puts. I got out of my longs because of that indicator.

  • convictscott

    Mole – Your take on the daily zero would be appreciated at this point 🙂 Is it my imigination, or did we just breach that channel to the upside? If so, thats very significant to me.

  • convictscott

    Absolutely expected. And the fact that its hitting resistance is not necessarily bearish, even if the market was going to spx 1300 you would still expect resistance here, because its an easy place for shorts to get positioned with a tight stop.

  • ronebadger

    And…I need some edification since I'm new, one DZ is up and the other is down…is there some significance?

  • anotherone

    What's fascinating is that this level was determined by a percentage of a move that took place over 18 month period over a year ago. That it would now be resistance just fascinates me and hints of something deeper going on than just a simple random walk. Market psychology amazes me.

  • convictscott

    Amokta, I was wrong on Friday about silver reversing, a gap and hold is quite bullish for Silver.

    My take on it is that silver is now embedded in the upper bollinger band, with a close way outside the band. If you can afford to trail a loose stop the odds favor the longside at this point, although I suspect it will be a wild ride as outside bollinger band closes usually come back inside.

    If you are trailing tight stops its probably a different story.

    Personally, though I thought silver looked stinky at these highs I was immediately proved wrong on the open of globex session. If you look at the small timeframe action it was a gap up, immediate gap fill, then go. Bullish.

  • fisheggs

    Free speech is alive and well………..NOT! http://www.bbc.co.uk/news/worl

  • convictscott

    How is liquidity in PSLV?

  • convictscott

    Dont short small caps. Period. Spread betting is a total scam, dont do it.

  • Eva S

    What numbers are you using for 10/07 and 3/09? I thought we were already past the 61.8% retracement.

  • convictscott

    Have you seen the various put/call derivative numbers on sentimenttrader dot com?

    You might find it useful

  • amokta

    Yes, gld/slv options seem good way to go

  • convictscott

    And is the break to the upside a function of the TOS reading you were dubious on ?

  • amokta

    Thanks CS
    anyone can get lucky (like me picking a direction), but in the bigger picture i need to work on a rule/system (i.e. luck is not going to make me profitable in the long run)

    anyway closed out my silver long (not keen holding 3xetfs overnight, esp in silver!)

  • convictscott

    hit me up on skype sometime (id scottphillipsau) I have suggestions about places to start.

    What was the gain in profit, compared to the distance to your initial stop loss, ie the profit/risk?

  • amokta

    I think RBW knows more about PSLV – seems liquid enough according to google chart (but order of magnitude less than SLV)

  • anotherone

    Not dubious at all. Just remarking on the level where it's hitting resistance.

  • anotherone

    157.48 and 66.87. From TOS

  • Eva S

    Thanks. Stockcharts is showing a low of 64.65. In any case, all we need is 1 good day and we are home free. 🙂

  • http://profiles.yahoo.com/u/27ZC2SBQHQE6XD4KTTKHVENQNQ Ray

    Mole – yes we need clarification. I am finding your VIX and POMO posts much better than DZ.

  • amokta

    For what its worth ewi prechter sent out special alert to go short silver/gold (with 3% stop), for speculators only
    – now is this a contrarian sign to go long!

  • raised_by_wolves

    Yeah, it's a great way to go as long as you don't care about inherent value since OTM options expire worthless and the underlying itself is a paper/digital/imaginary product (like most everything we trade).

  • Joe_Jones

    No. Regardless of what Preacher says.

  • rg64

    yep

  • amokta

    sold all AGQ today at 152.50 Bought in 1/3 lots at 148.77, 150.1 today and 143.9 on friday (avge=147.5). Difficult to work out stop-loss/risk, but on friday it was loose (lets say 142, then no stop over weekend, then today progressively tighter stops today 145, 149,152.5)
    Thanks for offer of suggestions – will take you up, once i get some of my basic ideas together!

  • amokta

    Yes, options can (and do!) expire worthless – learnt that after buying gld puts based on prechters 'gold top' some time way back earlier this year.

  • amokta

    My trading has improved since i no longer take ewi stu as gospel – of course thats not to say prechter cant be right (even a broken clock can be right once in a while), or he may have got the 'waves' right this time

  • OldChicago

    Yeh. You'll likely to find out after stopped out on 3% loss, this time around, and forget about all other times when he was wrong. Sorry for being a sour grape.

  • Joe_Jones

    Forget Prechter. Check the technicals.

  • OldChicago

    What's your reading on gold and silver?

  • slice40

    Interesting timing with Julian Assange, Wikileaks founder, set to turn himself in within 24 hrs. I wonder if his “insurance policy” becomes public.

    http://www.zerohedge.com/artic

  • amokta

    Just throwing it out there!

  • Joe_Jones

    I hear you. Right now we are at a critical juncture. Can go up or down. But the odds according to the tech are down.

  • http://zstock7.com/ z stocktiger

    Hello everyone!
    The market took a chunk out of CELG….I'm going long 52-54

  • amokta

    Your PBR picks seems ok so far!

  • http://zstock7.com/ z stocktiger

    CSCO, just raised my stops to 19.30…19.34 new support–$21 here we come!!!!!!

  • http://zstock7.com/ z stocktiger

    VIX is wound up so tight on the 15 minute chart, it's got to break out, huge, one way or the other…signals are favoring higher for Tuesday…we'll see!

  • Joe_Jones

    Why 99er last comment was “flagged for review”?

    One cannot call double top anymore?

  • http://zstock7.com/ z stocktiger

    I get about 70% of my trades right, lot of breakevens–that's the on going avg now, going on 5 years…

  • amokta

    i think if you can pick more winners than losers, and minimise losses, while maximising winners, then thats success!

  • raised_by_wolves

    Breakout?

  • raised_by_wolves

    Hehe, I'm always having to get 99er out trouble. Because he posts frequently and usually uses one or two words to describe his link, DISQUS often mistakes him for a spammer, which of course he's not.

  • raised_by_wolves

    To an algo, SPX Double Top looks an awful lot like SEX Double Top.

  • raised_by_wolves

    Hey, I keep trying to add you to the whitelist without success because DISQUS gives me a perpetual waiting icon. Stainless Steel Rats like you, but DISQUS sure doesn't. LOL!

    http://content.screencast.com/

  • Fearless

    Buy the physicals.

    I do it this way: buy 10 oz bars and buy 1 ATM put on GLD or SLV depending on which physical you buy. This way if you accidentally buy the physical at the top and get f—ed, you have some nominal protection until the put expires. It's getting harder to get your hands on the physical now, if you can read into it what this means.

    If the physical keeps going up in nominal value, you're saving it for the day the USD is officially worthless, so you could care less about not being able to trade it.

  • Fearless

    You don't think JA is another CIA operative and that this whole WikiLeaks thing is staged? The 911 truth campaign didn't get any airtime or press coverage in the MSM. Why WikiLeaks?

    WikiLeaks has now successfully given Obama a good reason to go ahead with Internet censorship. One freedom/right at a time until Americans wake up when it's all too late.

  • slice40

    There's no telling how deep the rabbit hole goes. This didn't get much traction until he mentioned the data on one of the banksters. Perhaps these disclosures are a result of the dragnet closing in on him.

  • http://zstock7.com/ z stocktiger

    ARO was down huge 2 days ago—teen clothing is the new bio-tech—post a comment, when you see ANY teen clothing company drop….

  • SW6

    RBW, 99er's email is exposed…

  • raised_by_wolves

    Just like 9/11, it doesn't even matter in terms of outcomes whether the whole WikiLeaks thing is staged because, staged or not, this will be used as an opportunity to extend internet censorship. Like you said, “One freedom/right at a time until Americans wake up when it's all too late.”

  • raised_by_wolves

    Oops. My apologizes. Fixed.

  • Fearless

    RWB, are you a fellow Canadian?

  • raised_by_wolves

    I'm half Canadian, half American.

  • 99er

    With 1004 comments now, I've become a proto-spammer. In any case, I think Disqus is not user-friendly to me because one of my most frequent comments is “Fuck Disqus.”

  • Fearless

    Not too many “100% Canadian” anyways. Most of us have ancestries outside this country. 🙂

  • http://zstock7.com/ z stocktiger

    already achieving more success, than even I could have imagined!!!! Started about 4 years ago, when I discovered a new way of looking at the charts…Now, I'm like molecool…I try to peddle the new way!!! (subscibe)

  • 99er

    Shit. I thought it would get me some SEX double tops.

  • raised_by_wolves

    Hey, phukdisqus@gmail.com is available. I highly recommend you pick that one up before someone else does and use that for your DISQUS account.

  • raised_by_wolves

    I can re-expose you if you want. Maybe one of the girls, Eva or Amokta, would email you.

  • SW6

    LMAO!

  • http://practicalt.blogspot.com/ Gold_Gerb

    that' just wrong.
    ;-D
    http://www.comicbooked.com/wp-

  • raised_by_wolves

    I've lived in Winnipeg for a couple years. I'm in Seattle now. Are you in Toronto or Vancouver?

  • http://zstock7.com/ z stocktiger

    ah hell no! I just blew up my amp, playing the prodigy video!!!!! good to know, there are other kindred souls out there!

  • http://zstock7.com/ z stocktiger

    molecool, you shop at Ralphs? KR stock is on sale—(Kroger)…when that's finished falling, I'm going long. KR always gets back to its 200 day 21.4, so on a technical basis..it's already a winning trade, buying it now.

  • Fearless

    I've lived in Winnipeg for a few years, too. I've lived in Toronto for a few years, Montreal for a year, and Ottawa for a year. Right now I live way up North (hence the Polar Bear avatar) because of a job and will move again next year.

  • raised_by_wolves

    If I can afford ever afford to buy land, I'm thinking about moving to Yukon to hunt, fish, gather berries, make moonshine, etc. Have you ever been to Yukon?

  • SW6

    I realize it's up to the beholder, but would you describe Montreal as beautiful?
    My definition of beautiful for a city:

    many cultures
    different races (as tension free as possible)
    many things to do whether one is poor or rich
    music venues for classical,jazz,rock, the avant-garde, etc.
    large city parks (like New York)
    an “energy” that is always in the air

    I've had Montreal on the mind lately…but I know nothing about it.

  • stuped
  • SW6

    That, is a beautiful vision RBW.

  • convictscott

    Amotka a girl??? Really?

  • 99er

    EURJPY
    Okay, Disqus. Second try.
    http://99ercharts.blogspot.com
    Yours truly.

  • Joe_Jones

    Montreal is a fantastic city. I lived there 5 years.

  • Fearless

    That's where I'd like to move to next year if at all possible. I haven't been to Yukon yet, but pictures I've seen have all portrayed Yukon as a beautiful place.

  • Fearless

    I enjoyed living in Montreal, but you would need to be able to speak some French if you live in certain areas. I lived in an area where French was a must, although my job there did not require me to speak French.

    There are many different cultures in Montreal, and quite tolerant towards one another. Heck, even Israelis and Palestineans are friends. I also enjoyed the selection of food there. Lots of festivals year-round.

    Darn, you make me miss Montreal again. 🙂

  • convictscott

    Amotka, thats a nice looking chart, and the perfect looking thing for you to be trading.

    OK here is how you work out risk. Risk is what happens if it all goes bad, so presumably you wouldnt have scaled into your position if it didnt work, so the extra lots you bought arent relevant for risk purposes, since you were only risking profits at that point. Ditto the way you trailed your stop, since its not relevant to your inital risk.

    Your first purchase at 148.77 had a risk of 6.77 per share. Your exit profit of 3.48 gives a R return of .51R on the first 1/3 position . Now, you actually got .77R over the whole campaign.

    You should note that there probably wasnt a reason to get out of the trade at this point, its working in your favor, the chart looks nice, could easily make an argument for scaling out… but the big thing is that over time taking .77R for a win you need to be averaging 75% or better win loss ratio to stay in front. Very difficult.

    Another way of working out R is if you actually *planned* to scale into the trade like this. In that case your risk would be 147.5-142 = 5.5 and your return would be 5/5.5 = .9R which is a perfectly acceptable return

  • convictscott

    Can someone who uses TOS please post an SPX chart with the TD sequential count on it please – I really couldnt be bothered doing it manually

    thanks

  • SW6

    🙂

  • SW6

    Thx, this is good to know.

  • rg64

    looking for a nice pull back to get back in long on SPY. Will not chase if I dont get it but I think i will and will set up great trade higher into end of year.

  • 99er

    I can try. What is “TD”?

  • convictscott

    Tom demark – he built mechanical systems for paul tudor jones, and has many acolytes using a weird, but strangely prescient system of counting to 9 and then to 13 to time market reversals. His books are extremely hard to read but worthwhile

  • 99er

    Scrolling through the TOS studies list, I found many things (Ulcer Index a new favorite) but did not see mention of “Demark.” Is there a formal name?

  • 99er

    TOS has a study called “DMI” which may mean Demark Indicators. Here it is. If this is what you are looking for, then let me know the time frame you need.
    http://www.screencast.com/t/s5

  • DMS425

    Mole,

    How do you have any money left? You have been wrong for two full years. It is amazing that you can find more idiots to pay you so you can help them lose money. YOU SUCK!

    D

  • DMS425

    He is worse than this site

  • DMS425

    You have no one left. First time I have stop by in months. Way to talk out of both sides of your mouth. The girls were right about you Roley. They have been banking coin daily like everyone for the last two years except you and the dumb mice following your shitty advice. You should be locked up with the rest of crooks.

    D

  • DMS425

    The best short sellers kill it in small caps, that is a fact! No matter what you do there is always risk. Live it, learn it, accept it. Don't listen to others most know nothing. Good luck.

    D

  • DMS425

    Why, that is where the BS……..is everywhere. For instance look for private placements that have move up a lot after an offering, then wait for the reg statement to become effective. Easy money scotty. Real money does this for a living. The investors sell the stock to lock in gains and stay long the warrants. FACT!

  • Hungry_Joe

    CS : “My take on it is that silver is now embedded in the upper bollinger band, with a close way outside the band. If you can afford to trail a loose stop the odds favor the longside at this point, although I suspect it will be a wild ride as outside bollinger band closes usually come back inside.”

    Silver has shown this to be the case. The problem is after it comes back to the average after consecutive closes outside the band, it just resumes its march towards the upper band and the band itself just keeps on spreading allowing for a higher move. Purely on this, I did not dare to take the soup plus one trade. Desired Stops are too wide for my Equity to permit this kind of trade. Copper too traversing the entire width of the band with the band now widening into a 5 year Triple top kinds. Hell.

    CS: I will also love to have your suggestions about places to start.

  • https://evilspeculator.com molecool

    Yes we did breach it – supporting the Santa Rally I was proposing for several weeks now.

  • https://evilspeculator.com molecool

    Heheheheeeee :-))

  • convictscott

    I guess we go on high alert for a gap n go trend day sometime this week then

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    I swear these f.ing “4 letter description” criminals know where my f…ing euro stop is every time.

  • https://evilspeculator.com molecool

    It's okay to swear here…

  • https://evilspeculator.com molecool

    What is KR? And no, I don't shop there – yuk!

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    ok, didn't know.

    you know my stance on the other subject

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    i see a lot of shit. manipulation. collusion, etc.

    i even see when there are 16 bids on the euro, it trades 2 at that price and the bid is gone…. that's not coincidence.

    bastards are the “vampires”

  • Bob the Horse

    I am on jury duty. Makes life a lot easier. Since I went long at the end of last month, I have made back all and more of the money I lost over the last few months being bearish. And the funny thing is – it has been stress free. I have continually asked myself – do I want to be short here? The answer is a simple no. Will review again next year but unless market craps out within next week or so, it is just going to grind in to Jan 1. POMO is a powerful force in a liquidi market – what is it going to do in the last week of Dec?

  • jacksoo

    well done bob – – – not as successful but i do agree that being long comes with a better state of mind – -i guess its because we know we're running contrary to the known universe.

  • raised_by_wolves

    Hey, I edited your one of your posts, converting abbreviations into full-fucking-fledged swears.

  • raised_by_wolves

    That sucks. If it gets to the point where stop losses mostly get hit, I think Mole knows of a method for trading forex without stop losses. I'm not smoking anything, er, okay, I am, but that's besides the point.

  • raised_by_wolves

    I'm not seeing any TD sequential indicator so it will have to be coded.

  • raised_by_wolves

    Scratch that, I found the study. It's simply called “sequential.”

    SPX

    http://content.screencast.com/

    SLV

    http://content.screencast.com/

  • raised_by_wolves

    TOS simply calls it “sequential”.

  • jacksoo

    how do these counts work CS – – will research but opinion welcome

  • raised_by_wolves

    Maybe someone that practices Tom Demark's methods can confirm, but it looks to me like silver is likely mid-leg up since the most recent count on the daily chart leaves off at 5:

    http://content.screencast.com/

  • jacksoo

    do you have an idiots guide to TD RBW?

  • raised_by_wolves

    I have no clue how the TD method works except that counts conclude with 9s or 13s. Maybe that Goog Gerbil can help you find an idiot's guide that's more extensive than my previous sentence.

  • JDWM

    Stopped out of course on Short S&P. Actually, I am not at all unhappy about such an event. Better that than what i used to do – keep on feeding. Ugh! 🙁

    Just gone short EUR/USD at 1.3365. Stop at 1.344

    This time last year I saw $ strengthening and S&P rising (wierd I thought). Of course I was short S&P. This time the same is likely but I'm out of S&P short the Eur. On verra.

    Does seem likely Santa Claus etc yet if China raises rates this w/e as mooted.

  • raised_by_wolves

    Although not related to trading, this is related to silver since I captured the image on film and then scanned.

    http://content.screencast.com/

    Yeah yeah, I see that dust on the left hand side. I wish there was more of it and a big ol' scratch too. Dust and scratches, sacred artifacts of pre-digital photographic processes, are best left untouched.

  • raised_by_wolves

    SPX options expiration period chart (cleaner than monthly) with sequential indicator:

    http://www.screencast.com/user

    Probably more uptrend.

  • amokta

    Would you believe it – silver and spx futures up!

  • raised_by_wolves

    Why wouldn't I believe it? It's called an uptrend! 😉

  • amokta

    True, just i went short yesterday, as thought we might get a mini-pullback

    -as usual, breaking my rule re dont scalp against the (likely) trend direction

    -perhaps the 'buy the dip' rule should have kicked in!

  • raised_by_wolves

    Look at Mole's chart again. See the red? If one takes the Fed's liquidity pumping (2009 and now) and draining (2008) seriously, then one would be more inclined to buy the dip given that the red line is higher than ever (liquidity pumping).

  • raised_by_wolves

    If you were applying it as a universal rule, 'buy the dip' would have too much draw down. For 'buying the dip' to work well, you have to be context aware and know when to apply it and when not to.

  • amokta

    Thanks – lets see what happens after open!

  • Fearless

    Perhaps my only post of the day until after the market close:

    It looks like we gap up huge, glad I didn't try to front run my indicator by going short yesterday. Today's volume should be quite large, and the VIX looks to gap below 17 to fill that gap at 16.6 ish. The NYMO could again put in a negative divergence again, although this time both the negative divergence (longer term) and the positive divergence will be present simultaneously. Today's bar will be very decisive in terms of where we're likely going to be for the next three months. Depending on how this bar closes today, Friday may be my last trading day of the year.

    Bullish scenario: we clear 1235 – 1239 and close above 1239 with UVOL/DVOL > 10. On our way to 1300 by February 2011.

    Bearish scenario: we gap above 1227 with the VIX gapping below 16.6 but close more than 70% off the HOD with the VIX closing in green and near HOD on DVOL/UVOL > 3.

    The “f—ing annoying” scenario: we gap up and then sell off and then trade f—ing sideways for the entire day.

    Note: Don't short silver or gold now. Pullbacks are likely going to be small and quick, but the burst higher will be strong and more sustained. We may be 2 – 3 years away from the bursting of PM bubbles (actually I am not so sure that it is a bubble right now, as the USD will eventually worth less than toilet papers).

  • amokta

    Anyone seen the horror movie 'The Return of RampenKampenstein'

  • EvilTrader

    cheers to printing-press benny.

  • http://pulse.yahoo.com/_SQTBUFWYO7Y7ZHMHPKLR6PKHKU Forex Chump

    ISEE Equities 10 and 20 DMA both rising (229.9 and 219.35, respectively). This leg up from September could end soon but it's not time to short. Wait to see a reversal.

  • http://practicalt.blogspot.com/ Gold_Gerb

    Google not required, I keep a bookmark..
    http://www.healthywealthywisep

    There's a small cult of TD's over @
    http://trading-to-win.blogspot…/

  • volar

    hating interactive brokers… going to trade station or TOS

  • http://practicalt.blogspot.com/ Gold_Gerb

    amazing.
    definitely high risk territory.
    but no signal for short…yet.
    http://stockcharts.com/h-sc/ui
    even if, the POMO chart is convincing.

  • 99er

    ES
    Be careful of beautiful butterflies…some can bite like a big bad ass bear.
    http://99ercharts.blogspot.com
    Good luck.

  • jacksoo

    how do you calculate a tgt for a breakdown of that bearish pattern 99er?

  • http://www.mylifemytrade.com MyLifeMyTrade

    Why? what happened?

  • http://www.mylifemytrade.com MyLifeMyTrade

    They are going to break the back of VIX today.

  • volar

    somehow my stop was not “activated”

    Also I have had too many trades canceled.

    Lastly i have to have a diff system for charting- which is just a pain in the asss

    Anybody have thoughts on tradestation

  • EvilTrader

    anyone betting on a gap fill today ?

  • convictscott

    The master the gap stuff for today said “
    Risk Factors

    Size:
    Large up gaps (>40% of the 5 day ATR) during bullish markets (10ma>50ma>200ma): 32/66 (48%) and 1.1 pf
    since 2007: 12/35 wins and big drawdown
    Large up gaps (>40% of the 5 day ATR) when opening at a new 50 day high: 8/19 wins and .8 PF (but 13 filled or finished by EOD using EOD stop)
    Supportive Factors
    Gap Guides: show generally positive setups for today in the U-H and D-H zones
    5 Day Pattern: Up gaps following 3 higher lows preceded by unfilled gap : 15/21 wins and 1.8 PF
    Bottom Line

    Attractive return to risk opportunity, but large gaps have fared very poorly last 2 yrs and often have large post open volatility. Guides are good though – I'll reduce position size and use slightly bigger stop, and lock in scratch scratch trade around yesterdays highs. “

  • EvilTrader

    thanks, bro.

  • 99er

    EURUSD
    Guess plain folks are withdrawing their money. Wish I had some to withdraw. Bankstas suck blocks.
    http://99ercharts.blogspot.com

  • convictscott

    And “buy the dip” isnt a rule since it doesnt give a defined emprical set of circumstances where you can buy the dip.

    An example of a rule based methodology would be
    1) ADX is rising, indicating trendiness
    2) 50 EMA is rising
    3) pullback to 20 EMA
    4) Buy @ 20 ema with stop 2 ticks below 50 ema

    That would be a rule….

  • 99er

    I've yet to come across a specific target for the Butterfly but have for the Wolfe Wave (similar in structure); I'll put up a chart later today using that method.

  • convictscott

    Early days, but after 20 mins of market the $tick is showing roughly equal time in positive and negative territory (the blue line on chart)

    What this indicates to me is that its more likely to be a gap fill than a gap n go trend day

    http://www.masterkillers.com/w

  • captainboom

    I'm no expert, but yes it's at 5 on the daily, and looking like we'll get a 6 today. The requirement for the sell setup, which is what is being counted here, is that the close must be higher than the close 4 bars earlier. If it closes less than that, then the whole 9 count will disappear. Once the 9 count sell setup is completed, then a 13 count sell countdown begins. Those bars don't have to be sequential from day to day, like the 9 count setup has to be, and I don't remember the criteria exactly. Jason Perl's book on the subject is worth reading. Far less cryptic than DeMark's books. Note these methods should not be used alone, as I understand it. They exist to show you a higher probability of a direction, once the bar for the count you are looking at is completed.

  • convictscott

    The zero is not buying the ramp either

  • Eva S

    Love my Celtic tigers (AIB, IRE) this morning. Up 18-20% from yesterday. 🙂

  • shortcover

    backing up truck on VXX. Steals under 40!

  • convictscott

    I will spend some time preparing a dummies guide to Tom DeMark stuff, its really complicated and I dont trade it because I dont understand the methodology behind it the critical count numbers 9 and 13, but its weirdly accurate for blow off tops and major turning points.

    eg recently caught the top of junk bonds
    http://stephenvita.typepad.com

  • convictscott

    Wyckoff sign of weakness – new price low on 5 min es with new low tick reading of -945

    Conclusion, short the first 2 legged pullback. 945 is a pretty extreme tick reading it should start soon

  • convictscott

    Some ideas. We are in an uptrend on the daily. You could drop to a smaller timeframe (60 would work, 120 or 240 also). Draw in 20 EMA and 50 EMA on the chart. Look for a buy signal at a pullback to one of these levels.

    Alternatively, while bollinger band remains embedded take daily long signals (particularly daily hammer candles) on break of the daily high with a stop at the daily low.

  • convictscott

    When I get some time I'll post a howto, its cool stuff but the book is really really hard to read

  • convictscott

    Thank you VERY MUCH! I usually do this manually, meaning I can hardly ever be bothered.

  • jacksoo

    thx CS – – –

  • 99er

    RUT
    Wolfe Wave?
    http://99ercharts.blogspot.com
    Target is 715.

  • convictscott

    The gap was too large for the stops I use (I use 1.5 times the gap size, not ATR based stops), but it seemed an attractive proposition anyway by the numbers

  • convictscott

    I tried to be too cute with my 5 min entry. Plan was right, but I missed the trade ;-(

  • ds2

    The MACD needed to roll over. SPY almost touched the 50% from overnight and is reversing.

  • https://evilspeculator.com molecool

    Pre-holiday tape – don't start shorting here… It's simply that the boys shoved it up and then took an early lunch.

  • https://evilspeculator.com molecool

    Gap size stops – not a bad idea…

  • https://evilspeculator.com molecool

    Good decision!

  • Eva S

    Sold the tigers, bought TSLA.

  • https://evilspeculator.com molecool

    Surpri-ise!

  • https://evilspeculator.com molecool

    DZ completely and utterly rules.

  • raised_by_wolves

    Covered, not yet long. The chart explains:

    http://content.screencast.com/

  • raised_by_wolves

    You're welcome. Want me to update you at the close?

  • raised_by_wolves

    Sick!

  • amokta

    How come you time these so well – i bought those but they stayed flat a while back

    I bought RBS a day or two ago, but that hasnt rocketed

  • raised_by_wolves

    Good point.

  • amokta

    On that subject can VIX go to zero, if not, there must be a low-risk buy at some level (and can exit trade if remains flat). I assume vix can't rise with a rising stock market, so why would vxx go up (unless you are expecting a pullback)

  • raised_by_wolves

    Small caps are outperforming.

  • https://evilspeculator.com molecool

    Of course!

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    i'm short 10 contracts of soybeans right now….

    chinese banks are getting prepared for weekend rate increase.

    61.8 retrace and close to the 78.6 came up short…. last time beans sold of about $1.73 in 4 days… on the “fear”

    and Monday big inflation report coming out of China.

  • raised_by_wolves

    I guess you'd be more interested to hear when small caps are underperforming, huh? Hehe.

  • raised_by_wolves

    You have to admit though that this doesn't just look like small caps outperforming; it looks like a small cap erection.

    http://content.screencast.com/

  • http://profiles.yahoo.com/u/27ZC2SBQHQE6XD4KTTKHVENQNQ Ray

    Mole – how does VIX look and the Bollinger band? Aren't we at the low point ready fro a reversal and ready for the markets to crash next week at OPEX.

  • raised_by_wolves

    While /ES can't get it up, /TF will be either double topping or breaking out soon.

  • Eva S

    Both IRE and AIB had the pattern I buy – look at the MACD crossover yesterday.

  • amokta

    Echellento! (not sure thats the correct Italian spelling!)

    Anyway, good stockpicks seem to have potentially better risk/reward than the pure indicies-chasing (but each to their own, and perhaps indices-based products cant go bankrupt overnight!)

  • raised_by_wolves

    And here comes the retest of lows.

  • http://pulse.yahoo.com/_VSVXKYHCX5MPKIR6C2MRTTL42U Celtic33

    I went long VIX 12/22/10 call right here

  • raised_by_wolves

    VIX hasn't touched much less overthrown the lower BB. Personally, I think it would have been more bearish if the VIX gapped down lower than it did.

    http://content.screencast.com/

  • malverd

    eur/usd is cracking. market getting a bit toppy..

  • EvilTrader

    I shorted the SPX open gap, closed half position, moved stop to entry price now.

  • malverd

    yep gotta be quick with these moves

  • raised_by_wolves

    Thanks Captain Boom.

  • 99er

    Euro
    Did the bank run work?
    http://99ercharts.blogspot.com

  • 99er

    Copper
    Reality, folks.
    http://99ercharts.blogspot.com

  • raised_by_wolves

    Copper and silver divided by gold is still above my bolded trend line. If it goes under the trend line, I'm expecting a retest of the trend line and then a possible downtrend. Keep in mind that the MA(20) is also support.

    http://content.screencast.com/

  • amokta

    Im in a bit of a muddle – i have both a long and short position in silver!
    (one of the will be stopped out, risk is whipsaw, but hoping to capture a big move )

  • amokta

    Folks, long is the new short
    As PrimeMinsiter Thatcher said, 'this market is not for turning' !

  • raised_by_wolves

    Currently, I do not have any SLV trades on (or any other trades for that matter) but do have a working order for some call verticals. The idea is that if I think the trend for the next couple days may possibly be down but the current levels will probably be retested and the trend for the next few weeks may possibly be up (though I may be totally wrong), then I will attempt to buy call verticals on my terms. It's my terms or no terms, girl. If SLV has already bottomed in the very short term, that's okay. The risk/reward isn't exactly where I want it, and I don't mind missing an opportunity by being picky. If a lot of people are panic buying and then panic selling and then panic buying again, then I think pickiness, precision, and planning could pay off even more than usual.

  • amokta

    Thanks – currently i am avoiding options strategies that involve writing options (not sure my account is activated for that even!)

  • Fearless

    Brazil/US divergence: Look at the Bovespa slowly bleeding the day's gains away. Anyone remember what happened in April when Bovespa made its counter-trend move when the US made a new high, and what happened when Bovespa broke to a lower low? My theory – the heavily manipulated nature of the US market is such that it goes into a violent correction when the rest of the world market enter the most severe leg of sell-off. Look at the Bovespa making its move back to the 20 day SMA and then stalling there. That's why I said watch the Bovespa trendline. It was one that NEVER broke since November 2008, unlike other indices. It's getting close but no cigar.

  • https://evilspeculator.com molecool

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

  • raised_by_wolves

    Since call and put verticals have defined risk, you may be able to trade them. If you don't already know, verticals reduce potential reward compared to straight calls and puts, but they also reduce theta burn.

  • raised_by_wolves

    Thanks for pointing that out. Would you mind keeping Stainless Steel Rats updated on that Bovespa trend line in the coming days and weeks?

  • amokta

    Thanks – something for me to read up on!