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Running Like A Hare
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Running Like A Hare

by The MoleJanuary 31, 2012

The tape that is – at least for the past few weeks. Gaps at the open galore followed by systematic squeezes to the down or upside – it’s a pretty nasty January we’ve had ourselves here. Which is kind of strange as on a daily basis things are looking a lot more tranquil. Once you zoom out a bit you get an idea what I’m talking about:

It’s been a nice 120 degrees hill climb since mid December. When I see intra-day noise coupled with long term tranquility I usually take notice. But what really puzzled me as of late was the small signal range on the hourly Zero and the Zero Lite. Which is reflected on the TOS version of my hourly Zero – see above.

Now, I started to think about what the implications could be here and whether or not things could continue to bubble higher alongside minimal participation like this. The answer to my question was delivered when parsing for prior occasions in the past. In particular take a look at the highlighted sections on the daily Zero chart ranging from May 2010 to September 2010. Back then we got a pretty thorough correction and then the signal went flat. I still remember a lot of bears getting very excited in August 2010 – which of course turned out to be the bear trap from hell. The daily Zero was spot on throughout I may add and kept us out of a boat load of trouble.

Now, as Mark Twain famously said – history does not repeat itself – but it rhymes. Very smart man and it’s a good lesson when it comes to trading as well. Look – a significant correction here is not impossible. Obviously bullish sentiment is through the roof and the ongoing correction is still a bit shallow and seems to attract intrepid dip buyers. On a very short term basis I would fade equity charts and stick with the currencies. But on a long term we continue to look very bullish here. The daily Zero is not painting any divergences and even more so – has gone flat.

A lot more charts for subscribers below – please step into my dusty lair:

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More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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This was one among several divergent charts I presented a few weeks ago – we are looking at advancing vs. declining NYSE volume. Given a major divergence at that time a medium term correction was on the horizon. It came late in the game, which I pointed out would be an harbinger of a weakened velocity to the downside. And accordingly the bears have not been able to properly leverage their one opportunity thus far. Perhaps we’ll get Scott’s Retest Variation Sell – and that would be sweet. But even if we do I think the downside potential is limited at this point.

I think my timing on ole’ bucky wasn’t too shabby. It seems to be holding on its 100-day SMA and as long as it doesn’t drop below we ought to be holding here. Of course – if it does then it would give the bulls quite a bit of headwind – so I would watch this chart like a hawk. The hourly panel is rather interesting right now as we are sitting right at the 100-hour SMA.

Silver is sitting at daily support right now and may be a great opportunity for a reload. Pretty low risk setup as you can set your stop below that 100-day SMA.

My call on copper wasn’t too shabby either. We are now sitting at the very first support in the form of an NLSL near 3.76. A breach here gets us to 3.65ish. However that hourly seems to be holding up very well and was able to stop some pretty nasty red candles. So if you are long here I would hold with a stop below that daily NLSL or below that 100-hour BB line.

Bonds – the 30-year is looking mighty bullish and just hit a NLBL near 144’14. The only problem here is that we have some pretty mighty resistance looming not too far away starting near 145. So it’s tough to be long right now – I’d rather have it bounce its head a few times and then get a sense of what it’s up to.

Ditto for the 10-year – now running into resistance. Those BBs are going to start lifting however and even if there’s a pull back 131’065 ought to hold and may be a good jumping board for a trend continuation trade.

Corn appears to be sitting right at an inflection point – we have both the 25-day and 100-day SMA converge. As you can imagine a breach above would be one sweet long opportunity as there’s nothing but air above. I’d say watch that hourly support I have pointed out and be patient as this thing may flail around a bit before it makes up its mind.

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Cheers,


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

    Ya, the ZL looks primed as well:)

  • nyse

    Yep.

  • Anonymous

    Hasn’t the dailyZL been divergent since when it was at 1200 (mid-Dec), when it peaked around 9?

  • https://evilspeculator.com molecool

    Yeah, that peak is not as pronounced on the TOS version of the daily. I think the NT feed is better but in any case there was also a divergent signal back in 2010 but as long as the signal remained above the zero mark we bubbled higher. Here is the NT chart:

    http://content.screencast.com/users/mmehrle/folders/Jing/media/85be3166-57e3-462a-a389-e579d0f15d15/2012-01-31_1155.png

  • Kudos

    Mole, is the /NG NLBL still in play at 2.485 ? I see we are currently under the NLSL of 2.512 any thoughts? In particular, any thoughts if we get a close in between those two points?

  • Anonymous

    Hit my target, may watch for a short set-up now.

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

    bear trap from Hell indeed.
    burnt so bad, took me months to get the soot off.
    http://www.twinsqueaks.com/gerbilblog/wp-content/uploads/2010/03/chip.jpg 

    I’m liking this SDS position.  9 days and nowhere.
    that length of time in a front month option?  death.
    ok, maybe it’s a slow death.  at least I can’t feel it like options.
    😉

  • Anonymous

    Wait for EOD ramp to get short if ZL agrees:)

  • Anonymous

    What hit your target, and what was your target?

  • Anonymous

    Ahh, picked up the same puts that I sold today:)

  • Anonymous

    1310 /ES

  • Anonymous

    ridingwaves,

    Picked up some NGSX:) Getty up!

  • Joe_Jones

    LMAO!

  • Anonymous

    Ya, good thing they were cheaper:)

  • Anonymous

    May need to test that recent low before the ramp.

  • https://evilspeculator.com molecool

    It dropped through its current NLSL at 2,512 – this is a short unless it recovers and closes above it.

  • https://evilspeculator.com molecool

    Here’s the chart: http://content.screencast.com/users/evilspeculator/folders/Jing/media/423061fa-fd8e-408b-bba5-f60db478d9a7/00003474.png

  • Joe_Jones

    Copper action is not too hot and has decent down volume
    http://stockcharts.com/h-sc/ui?s=$COPPER&p=D&b=5&g=0&id=p17816831231
    VIX painted a daily bullish hammer
    http://stockcharts.com/h-sc/ui?s=$VIX&p=D&b=5&g=0&id=p68625009364

    I think copper’s monthly candle is quite interesting: i.e. touch and rejection of 20 ma
    http://stockcharts.com/h-sc/ui?s=$COPPER&p=M&b=5&g=0&id=p18894397198

  • Kudos

    I did close out the small position I had. I was interested in that NLBL on your chart though. Hate to go into theory, but if we did close above 2.485 but still below the NLSL, would that buy line have been fine to play or too uncertain?

  • Joe_Jones

    looks like AMZN’s miss is going to do some good to my Nasdaq ultra short portfolio

  • Anonymous

    Mole, can we get a Daily Zero update?

  • Anonymous

    Yeah. But watch out for the Facebook steamroller!

  • https://evilspeculator.com molecool

    I updated it at 4:00pm.

  • https://evilspeculator.com molecool

    Did anyone play that beautiful short signal on the AUD/JPY?

  • Anonymous

    Added to short. Chinese PMI coming out at 8pm. Gotta see if I hold.

  • Anonymous

     I’ve got to stop sleeping during all the nice moves. I need some of whatever Skynard is on…

  • Anonymous

    He runs iv caffeine laced with ketamine. Sometimes he sees stars when its not really there!

  • Anonymous

    Mole has email system. So your smartphone should be able to alert you.

  • Anonymous

    Damn! looks like a nice trade with a hammer candle on the 5 min to boot.

  • Anonymous

    LOL! you guys crack me up! Ya, you don’t want any of this stuff:)

  • Anonymous

    You think it will have an impact on the market?

  • Anonymous

    Short term could see a bounce. If so I will short higher.

  • Anonymous

    Very odd occurrence with my /HG short. Just blew by my stop loss and dropped below it without stopping me out. Not the first time!

  • Anonymous

    stop loss? were you not short?

  • Anonymous

    guerrilla short going back in at .0650. 

  • Anonymous

    Yes, with a stop loss in case it moved against me and to lock in gains. Luckily it fell back for now.

  • Anonymous

    Coppers going down big but timing anything in these markets has been tricky.

  • Anonymous

    BTW UUP calls are just pennies now. If you play options.

  • Anonymous

    At a glance it would have to be June 24’s @ .17

  • Anonymous

    They sold that off right quick!

  • Anonymous

    Got some march 24 calls for like 4cents!

  • Anonymous

    That my good man would be difficult unless the dollar launched to 89 by March. You need time for that trade.

  • Anonymous

    Yeah not looking for 89 just a couple of cents over 4. Dollar is at support. Look at moles setup above. 89 on DX will take months.

  • Anonymous

    You would need the dollar at approx. 86.5 by March.

  • Anonymous

    I dont think that will happen that fast. But if support holds here and starts moving up I may get a cent or two on my options. I will get out.

  • Anonymous

    Some I bought for 4. Already they are at 5 cents.If I see 6 tomorrow I am out.

  • Anonymous

    That is rough figures, although if the dollar does rise you will make some premium but time is the problem.

  • Anonymous

    If you want to bank good coin you need 1-2 months options with the ZL:) Day trades.

  • Anonymous

    Yeah. I am learning. Especially with forex. Not good with options. Too complex for me. Just saw the low price and decided to take a shot. Also dabbling in some futures. Took a shot at silver(mini). Looking good.

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

    I searched for carolina guerilla….this guy wouldn’t live close to you?
    http://api.ning.com/files/MA8gS4K-6OSv*5r0FikjqYeQ7JE5*IuBCjyayjdbWKY_/

  • Anonymous

    Haha. I am with AMC on this one. Playing whack a Aussie.

  • Anonymous

    He looks hungry!

  • Anonymous

    LOL!! No, regretfully.

  • Anonymous

    Short /ES @ 1310. sitting on a fence.

  • Joe_Jones

    This damn line is messing with us for almost 2 weeks now.
    🙁

  • Anonymous

    Tough nuts are hard to break, unless of course it is consolidating. Kills options as well!

  • Anonymous

    the better the rout. 😉

  • Anonymous

    as stated yesterday, it would pull back and then move north, BB break was part of reason for pullback then move north..when the big boys accumulate that much in 6 mos its telling..

    100 sma held it back yesterday..but all good…buy cheap sell high..

    Bio as a whole is definitely enjoying sector rotation

  • Anonymous

    Yes, looked at it and that symbol has 4 good weeks of accumulation now. Stops in!

  • Anonymous

    Futures fading…

  • Anonymous

    Futures fading…

  • Anonymous

    Is this thing on?

  • spicestory

    i think so, watching /ES making higher high as well as /GC revisiting $1750

  • Anonymous

    Isn’t SDS made from options? 

  • Anonymous

    Dollar getting whacked!

  • Anonymous

    Check out the divergence on EUR/USD on 5 minute and 1 hour charts.

  • volar

    new post for the heck of it- will be on the road till MON

  • Anonymous

    Nice! Could be worth a shot. Thinking to add to shorts with a watchful eye on ZL today.