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The Quiet Before The Storm
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The Quiet Before The Storm

by The MoleJuly 1, 2015

Personally I believe that very little is going to transpire here before Monday morning. I’m sure you are aware that the Greek are holding a referendum on Sunday the 5th [good write up here] which is I expect will throw markets into a turmoil – no matter which way the pendulum swings. Expect a ton of volatility and most definitely expect stop runs galore right after the Sunday open (which is night time here in Europe and preliminary projections will be coming in).

quiet_before_the_storm

All of that means I’m pretty much shutting down the liar starting tomorrow morning – and I won’t be taking on any new setups in the interim as we’re now heading into low participation territory. I’ve got two charts of note though:

2015-07-01_bonds_update

First up bonds – here’s the 30-year futures contract. As you can see it keeps failing at the 25-day SMA and is now heading down for a revisit of the recent lows. The weekly panel on the right however toggled my interest – the 147 mark near the 100-week SMA has survived a few times but the Grexit vote this Sunday could be the catalyst that finally breaks that camel’s back. Nothing but air below – this could get ugly quickly.

Honestly I completely hate what’s going on right now. I would love to be long here but the continuous Greek roller coaster is producing so much uncertainty that taking directional positions has been extremely difficult as of late. And being short here today ahead of Sunday is simply not an option as we may find ourselves facing the gap from hell Sunday night.

2015-07-01_spoos_update

My long positions on the E-Mini survived that little dip lower yesterday by a mere tick. Sometimes you get lucky and sometimes they’ll get ya. Not that it’ll do my much good though as today was supposed to be the session which drives this puppy higher. I have already closed them out for a meager 1R profit. As I quipped a few weeks ago – I don’t remember working so hard for so little coin for quite some time now.

As you can see we’ve produced an inverse island down here and unless that NLBL at 2071 gives before the close we’ll most likely remain stuck down here until Sunday night. And that means very little buffer to the downside – extremely serious conditions. But frankly speaking it’s all academic as the odds for a huge move down or up are significant. Thus I caution all of you from holding any equity positions over the weekend.

Words To The Wise

With all the gapping action and general uncertainty I wouldn’t want to wager on where we’re heading next. Holiday weeks are tough sailing to begin – without EU members falling by the wayside. Plenty of opportunity for monkey business and you know someone will get the results early (hint – it won’t be you or I). FWIW – I hope the Greeks decide to rip off the band-aid and leave the EC. It’s been nothing but drama since they joined up and I’m convinced both sides will be better off over the long term. I believe some type of separation over the long term it’s inevitable. Under the current conditions Greece is simply unable to function as a member of the European Currency Union.

Alright, if I see anything interesting I’ll make sure to post a quick update tomorrow morning. In the interim keep it frosty and don’t take on any positions that would cost you any sleep over the long weekend. It’s summer – go out and roast a hotdog or something. Get a tan. Pet your dog. Talk to your wife if you have to. The markets still will be there on Monday – hopefully in one piece 😉

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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  • ridingwaves

    I’ll take the bait…
    the $HUI just revisited it’s 52 week low..could go lower no doubt but Silver sitting on daily support went L-S stop at 15.24…Greeks with some metals in their investment coffers are probably a little more comfortable than those without…

  • mugabe

    probably happier with USD bills 🙂 or sterling … or euros.

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    Completed a lot of research today…. a few interesting tidbits:
    -Every month this year we have made a low during the first 11 days of the month and rallied. March was the latest and Feb was the earliest. Tuesday does not count as it was the 30th….
    -we have made bottoms before or after the employment report in 4 consecutive months
    -Since 2008, we have always made a turn one day before or a few days after the 4th of July holiday….

    Tells me that it is likely we will see lower lows before we rally…. Anything is possible, but that is what I will be looking for, before contemplating a long side position.

    -D

  • https://evilspeculator.com molecool

    “Since 2008, we have always made a turn one day before or a few days after the 4th of July holiday….”

    Yeah, that’s been pretty much the script. Often with a courtesy gap on Sunday night.

  • ridingwaves

    yep….

  • Bill

    A new Greek crypto-currency. That would be a fun experiment.

  • Skynard

    ZL hourly and 5 min all coiled up. Off most recent low, possible 3 in the works.

  • mugabe

    the problem is, the only greeks who haven’t already got the money out of the banks will be the poorest ones.

  • ridingwaves

    it will affect all classes…I hope they print the Drachma 10-1 on euro..Get away from the money masters….The Gazprom gas pipeline deal is going to deliver 200-500 million in a yr or 2…I’ll rent a villa in the Ioanian islands for a month or 2

    China and Russia along with Turkey will fill the void for cash…

    I like Greece and the Greek people. I hope they are the beacon of light that stops the corpocracy and money masters from making them debtslaves, it won’t start in the US….They have done much more in reforming their system than France, Spain etc. over last 4 years…

    The bundesbank has already been paid in full on what the lent out anyways with the EU bailout…

  • Skynard

    Bulls need to pull something out of their hat:)

  • almez

    how do you even read the zero right now? I’ve been getting burned the past 2 days. I thought there was a legitimate bearish divergence (double bottom, but zero pointing lower the second one) but that turned out to be the lows…

  • Billabong

    Bull exhaustion … no, it’s short exhaustion … no, it’s at the point where all participants are worn out. Greece is just the icing on the cake. GDX is within spitting distance of yearly low. CL had a failed buy signal today. DX has a buy signal on $ strength. Mole has the right idea. I’ll liquidate my last position tomorrow and take a few days off and watch the World Cup games on Saturday / Sunday.

  • mugabe

    what world cup?

  • wandering196

    FIFA women’s in CANADA. It’s a holiday here celebrating Canada day. But I don’t really follow sports so maybe there is another world cup

  • mugabe

    ah yes – excuse my machista comment

  • wandering196

    Your excused:). The only reason I know about is because it is here not because its women’s. It’s been some great soccer

  • mugabe

    yeah – I actually knew it was on … do’h

  • Scott Phillips

    Its a weather vane not a crystal ball
    Divergences, even on a good indicator like the zero, will only play out around 60% of the time.

    It seems like they are highly reliable because our minds are only capable of remembering when they work and forget instantly when they don’t.

    To my knowledge NOBODY keeps accurate stats on this, and this is why 🙂

  • Scott Phillips

    Yet again the fundamental basis for your research is completely bogus 🙂

    Very small numbers of incidences are evidence of nothing 🙂

    Suggest you take an online first year statistics course through edx or similar and reassess

  • Scott Phillips

    That would actually be very cool – a non-fiat cryptocurrency backed by a nation state. A true gamechanger

  • studentbill

    Something like that could turn everything around for them in a few years. They could reinvent themselves as the financial capital of Europe as the world continues to evolve technologically. It’s too out there at this time though and would never happen.

  • mugabe

    platocoin

  • Billabong

    England vs Japan … 10 mins into tonight’s game …. score 0-0. First time England has made it to the semi-finals.

  • almez

    I think I’m trying to develop a better set of rules. For example, it looks like the zero quickly rebounded to positive, which should have indicated that the selling was done.

  • Skynard

    Took another long on crude. 4 looks complete now since a new low has been made at 57. Let r rip:)

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    Believe what you want to believe – for the US equity markets, it is the way they work. If you do not understand the market’s dynamics, then it is absolutely best for you to stick to your successful approach….

    You can tell me to go to all of the statistics courses you want…. The FACTS of WHEN we turn relating to OPEX, employment, FOMC and holidays is indisputable! (note: it is not fundamentals – I never focus on those – it is just historical FACTS!)

    I do not claim to have a handle on the exact timing, and I agree it does not happen 100% of the time, but the facts are the facts…. Just look at opex this year – we have turned every opex with the tops being post opex (Feb, March, May and June) and the bottoms occurring on opex day (Jan and April).

    6 opex periods and 6 turns in 2015. I believe you trashed my comments around April opex as well – just go check what happened…..

    The important thing is that the turns are there. You can trash it all you want – but understanding the market dynamics is important for people that want to do well. I have studied the US equity market intensively for many years. Understanding when they could turn is extremely helpful….. (note: they do not always turn….)

    If you know that there is a high probability for a turn within 3 days – like post June opex – then you just need to figure out price levels where you are happy to get involved. I can not explain the opex dynamics, but it is there…. employment and FOMC are a bit more understandable as they represent market events…. as for holidays… it surprises me as well, but there is a 74% edge for moves of at least 25 SPX pts (not what it used to be…) +2 to -3 days…. July 2009 (post holiday and employment) and July 2010 (pre holiday and employment) were serious bottoms…. July 2014 (pre holiday / post employment) was a small one for SPX – more significant for MID and RUT.

    Like everyone on this site – my focus is banking coin – I only comment when a strong edge exists or distinctive patterns are emerging….

    Doubt all you want…. but it works ….

    Take opex: If you want to show me when it does not work and when it fails – be my guest – (it does fail… but only in a few instances and when those conditions exist, I always note the possibility) I am just surprised that you cast dispersions on well documented facts.

    If one does not understand a particular market’s dynamics, but the price action intrigues, then I ABSOLUTELY agree that the approach taken by Mole is the way to go…. I would never get involved with soybeans (or any commodity… or any other instrument other than US equities) without using Mole’s approach or a modified version of it.

    Doubt me all you want….. but watch for the turn….

    -D

    n.b. – there has been only ONE fall continuation related to the employment report since 2007 – that was October 2008. Tuesday could be the lows…. but if there are lower lows today or early next week – then the probability for at least a bounce for a few days is VERY high!

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    One other thing – I have a tremendous amount of respect for many of your comments (though clearly not this one)

    I even saved this one – as it is SO RIGHT!

    The path to profitability is well worn here.
    1) Work on your personality and inner self so you have the emotional prerequisites for trading success.
    2) Find an edge – through TA, fundamentals, or some other method.
    3) Build a system around that edge that SUITS YOUR PERSONALITY and a business plan to go with that system
    4) Backtest/Paper trade that system and refine it
    5) Trade it small scale until you can trade it at a high degree of efficiency (less than 1 mistake per 20 trades)
    6) Increase size
    7) Maintain updated trade records and continually monitor your systems for degradation
    8) Maintain periodic reviews of your own and your system performance with a view to iterative incremental improvement
    Everyone
    who is a winning trader here has done all of the above. Nobody was
    touched by the trading Gods and born brilliant at this. Each step, in
    isolation is achievable and not impossible. Anyone can do this, it does
    NOT rely on genius or brilliance (like the “super amazeballs trader”
    mentioned below) just solid work.
    My own experience is that it
    took me around 9 months of full time work (80-100 hr weeks) to build a
    system and get it ready for prime time large $ trading, not including a
    few years to get the basic trading knowledges down (including TA) Others
    report the same, as do Ivan’s students, who follow the same basic
    template (with more rigour in some areas).

    SINCE I dedicated myself full time to JUST taking the strongest Turning Point set ups in Spring 2013 (and publishing my research) -my results and consistency have improved massively. In my futures account, I have had just 4 losing months (only one significant one for stupidly taking a low probability set up late in the month – but even doing that taught me a lot about proper position initiation for my approach) in the past 24 and I have returned about 900%.

    I have learned a lot on this site, I will keep using it and despite the naysaying, I will try to contribute by posting comments when I see a strong edge from my research.

    Bottom Line: I have done all the steps you have suggested above, and I have found an approach that works extremely well for me.

    No worries if it does not work for you – but instead of reverting to suggesting statistical courses – why don’t you properly dispute the facts! That would be much more productive for all concerned.

    -D

  • https://evilspeculator.com molecool

    Wait until you meet the Germanzzz – hehehehe

    http://i.ytimg.com/vi/2WsxCg2Gt3o/hqdefault.jpg

  • Scott Phillips

    The facts are simple.

    Small incidences of statistical things mean nothing.

    This isn’t something we can have an argument about, any more than we can have an argument about gravity.

    It’s like observing rain 3 Tuesdays this month and saying “Tuesdays have a 75% chance of rain”

    This is not a question of belief, just of facts

  • Skynard

    We have a substantial div on the hourly panel which most of my decision was based from. It is an extreme signal deeper than the last.

  • Scott Phillips

    I don’t doubt that it is probable that there is some relationship there, just that the very small instances you quote, mean quite literally nothing at all.

    My question for you:

    “How many instances of a given event do you need to believe in an edge and why?”

  • Scott Phillips

    Better set of rules is good.

    Keep records. Thats the way forward 🙂

  • Skynard

    Looking for a H&S to complete on /CC @ 3300 where we will be short again. Been long

  • Skynard

    Short /SB, she needs to prove herself now.

  • Skynard

    Looking to get that reversal in crude.

  • http://pugsma.wordpress.com/denalis-turning-points/ denali92

    ignore the edge if you want…. I am just trying to help….

    I never get caught up in days of the week or anything like that…. you are completely right – but the opex edge exists and it certainly has helped me make a lot of money…. and one can not argue with that… If you are not interested in a little extra edge in the US market, then just ignore my comments.

    The market certainly did not ignore the edge this year or last fall (see Sept 14, Oct 14 and Dec 14 … and for good measure, Nov 14 does show that opex does occasionally have rally continuations for generally understandable reasons…. note: falls NEVER continue!)

    -D

  • ridingwaves

    SSE 100 didn’t hold…now up $87 on 3 month roller coaster chart…now that is a wipeout….and kind of telling…all this Greece drama is really distracting us from the elephant in the room…China..

  • https://evilspeculator.com molecool

    Guten Morgen!

  • Skynard

    Party on Garth:)

  • HeadNShoulder

    crude looks delicious now bro!

  • Skynard

    Ripe, took out all the stops and can run now.

  • wandering196

    was good until I saw that picture!

  • https://evilspeculator.com molecool

    Clearly you haven’t yet seen the German women’s football team 🙂

  • Skynard

    Killed it on /ZW:) Need some /ZC action

  • ridingwaves

    the girl with 2 credit cards above 🙂

  • Skynard

    Run coming on /CC

  • Skynard

    Me too, geez

  • Skynard

    She’s gana rip:)

  • https://evilspeculator.com molecool

    I got no dog in this fight.

  • wandering196

    not sure what you mean and if you are talking about me I have more than 2 🙂

  • ridingwaves

    http://s11.postimg.org/frieu55pv/IMG_0069.jpg

    take mine for the weekend…

  • ridingwaves

    the hot lady in the ad above.. speaking of cc cards, I love to play with the bankers, I run up a lot of credit for business, pleasure, they have penciled out the yield based off averaging and interest and then I just pay if off like clockwork before they make anything…did the same thing on new vehicle….I love messing with the pigmen…

  • wandering196

    I don’t see the ad so that explains it. and we play the same game also

  • Skynard

    Got it covered, rest after the day is over. Well needed after this week:)

  • Skynard

    Stops run on /ZC, good short

  • SirDagonet

    “Divergences, even on a good indicator like the zero, will only play out around 60% of the time”

    Not just divergences, but also nearly any setup, yes? Which is why you (meaningfully) continue to point out to us that one potential key to success is a lot of trades with positive expectancy and good risk management…

  • ridingwaves

    hey, you have 3 days to rest…fireworks, beer, bikini’s..
    Fog here on Saturday, scratch the fireworks & bikini

  • HeadNShoulder

    ZL complete flat on 5min, CPR! CPR!

  • Ronebadger

    I don’t know…bear flag from 2056?
    http://stockcharts.com/public/1092905/chartbook/229826273;

  • Skynard

    2070 holds she will run. FN running stops, bulls tape.

  • Skynard

    Lol, ready and willing:)

  • Skynard

    Bull flag, do not let the market shake you out of a position.

  • newbfxtrader

    Dip buying ain’t what it used to be…

  • https://evilspeculator.com molecool

    Yeah, he looks really ferocious :-/

  • https://evilspeculator.com molecool

    Mole reversal signals seem to love this tape.

  • newbfxtrader

    Not much participation today.

  • Skynard

    With sub 2 down we could have that 3 right here.

  • Skynard

    If we rally will reposition stops at 1R.

  • Skynard

    JBTFD

  • Skynard

    Taking crude off for the weekend @ 58. Got my 1R back:)

  • Skynard

    Hourly tuned, time to burn:)

  • Skynard

    /SB failed, next stop 12.00

  • ridingwaves

    closed out L Volatility scalping, added 1R today…the Vix is still in a sweet spot for moves…Using TVIX since the split as it now has a little more liquidity being above $5pps…

  • Skynard

    Anticipating an oversized move /ES 2083

  • Skynard

    Staight up BS, adding to long /ES.

  • ridingwaves

    nutty gas has to have a more edgy label than widow maker…maybe LSD schizo

  • ridingwaves

    one thing I know he is – Chick Magnet….

  • Skynard

    These W3’s are difficult to catch, good risk reward:)

  • ridingwaves

    YELP buy and hold folks whom bought at 70 are hurting..my pick up for quick bounce after exhaustion trade..

  • ridingwaves

    left a little early here…

  • Skynard

    Sucked in allot of shorts on this move.

  • wandering196

    You see bear flag, Skynard sees divergence, I see both so I stay out!
    I am a recovering permabear also

  • Skynard

    Nice backtest on crude, the ship stopped leaking:)

  • HeadNShoulder

    Good choice, I tend to walk away from the screen when my view contradicts with the bot.

  • Skynard

    Higher highs and lows rats:)

  • https://evilspeculator.com molecool

    I’m glad I cashed out yesterday. Another Nothingburger.

  • ridingwaves

    could retest that low….just scalping this as I still don’t understand their revenue model…

  • https://evilspeculator.com molecool

    As predicted.

  • Skynard

    Big move coming here!

  • https://evilspeculator.com molecool

    ) ( ( ) ) ____ ____
    ( /( ( ) ) ) ) ( /( ) * ) ( /( | /| /
    )()) ) (()/((()/( )()) ( /( ` ) /( )()) | / | /
    ((_)((((_)( /(_))/(_))((_) )()) ( )(_))((_) | / | /
    _((_)) _ ) (_)) (_)) __ ((_) ((_) (_(_()) _((_) |/ |/
    | || |(_)_(_)| _ | _ \ / / | | (_)|_ _| | || | ( (
    | __ | / _ | _/| _/ V / |_ _| | | | __ | ) )
    |_||_|/_/ _ |_| |_| |_| |_| |_| |_||_|((_) ((_)

  • https://evilspeculator.com molecool

    See next post.