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Return Of The Market Mole
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Return Of The Market Mole

by The MoleApril 15, 2014

Alright guys – it’s very late over here and I haven’t even unpacked – plus I just realized that I left my iPad on the train and as you can imagine I have a few passwords to change. So here’s the skinny:

After giving everyone the run around for the past week the tape started to run like a hare in the previous two sessions. Very very difficult to get a lock on things and I’m sure a ton of people got trapped into bad positions here. If you had any sort of directional opinion you are feeling the pain right now. So let’s talk facts – the E-Mini is on top of the 100-hour and 100-day SMAs right now. That’s slightly bullish but given the recent gyrations it’s still a far cry from being out of the woods for the bulls.

Interestingly however we just completed a bonafide VIX buy signal – which for the noobs I always have to qualify is relative to equities. It’s another ace for the long side but let’s see if we get follow through in the remainder of the week. We may meander around a bit more trapping more retail rats before this thing decides on where to move next.

For the record – it’s been a brutal spring for everyone so far. Although we have dropped a bit lower today’s push above meaningful resistance puts us back into the churn zone and that means we may see more of the high volatility sideways madness we all love to hate.

Now excuse me while I go kick a tree…

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

    He’s got big balls – must be one of mine.

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

    Maybe that rat sniper would get a fourth victim.
    granted, it’s not a nice candle tail, but instead a reversed weekly candle.

    But we know that nothing happens 4 times. well, with good odds that is.
    5 if you look back 18 months.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=1&mn=0&dy=0&id=p46636957716

    so my system would be to ignore short unless a second candle proceeded lower.
    otherwise, pull the trigger for a small long, and add (only) if confirmed with return-to-trend long.

    this avoids the deer-in-headlights, and sets you into a ‘let the market decide’ situation.
    essentially managing a trend within historic variability.

  • mugabe

    Looking at the hourlies, as per Brian Shannon at Alphatrends, price needs to get above a rising 5-day moving average to have any confidence in the move. It’s not quite there yet and is banging against resistance

    http://scharts.co/1gDb7YP

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

    yeah, that 37 may be overhead resistance now, until it isn’t.

    http://stockcharts.com/h-sc/ui?s=SPY&p=D&b=3&g=0&id=p54697640478&a=347026972
    (replaced chart, something easier on the eyes)

  • mugabe

    My gut says that the last couple of days is a rupture of significant support, followed by an attempt to regain that support which is now resistance, which very often fails in the end and the market heads lower. However, I’m not trading on that ‘prediction’. Price action will tell..

  • Billabong

    US markets closed on Friday

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

    yes. maybe start a gut log.
    it would be interesting to find out the ratio of “I knew it, to whoops” ratio.

  • Billabong

    LOL …. Oh no, is this another tool I have to back test?

  • mugabe

    that would actually be quite an interesting exercise. over a large sample the ratio would probably tend to 1:1!

  • spicestory

    The mad Muay-Thai boxer is my fellow countryman. Don’t think it has any bearing to do with the training. More so on being kicked out from his long position? Don’t mess with us šŸ˜‰