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Send In The Clowns
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Send In The Clowns

by The MoleFebruary 25, 2019

A few weeks ago some perma-bearish clown showed up and began to mix it up in our comment section. It didn’t take him very long to get squashed by the mighty ban hammer as he immediately began to challenge and offend half of the posters here, including yours truly. I don’t usually comment on trolls or clowns but this particular incident turned out to be highly educational and thus should serve as a stark warning to the rest of us: Never ever bet the farm on a lottery ticket.

Now since I was brought up in a more conservative/sane century I elected to blur out the guy’s disqus ID. We Germans may be famous for inventing the word ‘Schadenfreude’ but we do take losing your life savings by sheer idiocy or mental disability very seriously.

That said, here are two of the highlights, both posted on February 8th:

He quotes my post and insinuates that ‘trop traders’ have been building short positions in equities and are massively long implied volatility (i.e. the VIX and perhaps various option based vega plays).

Well, the E-Mini held up just fine that day and the next day and the next day, and many after that. In fact it relentlessly kept on steaming higher (fading an onslaught of bearish clickbait) and managed to gain almost exactly 100 ES handles as of this morning.

Alright, this is the money shot. Señor Payaso claimed that he was holding nearly 5,500 weekly 29 VIX calls, which happen to expire tomorrow. Not sure who up-voted that comment but it for sure wasn’t me.

Now let’s see how his option campaign has fared. I am giving him the benefit of the doubt here by setting the entry date to February 8th – if he bought them earlier or accumulated on the way up then that would have amplified his losses.

The ask on the 29 weekly calls were $20 and not considering commission he paid $110,000 for the entire position (not sure why the panel claims $55,000). And unless equities unexpectedly fall off the plate today or tomorrow and the VIX touches 29+ odds are his calls are going to expire worthless.

Lesson Learned

A lottery ticket is just that – a Hail Mary pass at some six sigma event that has extremely low odds of occurring. We’ve have all traded them and the few that actually panned out ended up glorious.

But don’t back up the truck and buy $100k+ worth of lottery tickets – or you will end up getting crushed just like this guy.

On the plus side he just won the coveted ‘beartard of the month award’. Congratulations are in order!

Alright, so where are we in equities this morning? With Mole kicking a damn tree as he succeeded to have his trail taken out (with profits naturally) by a mere tick or two. Best laid out plans and all – I really hope some of you guys were luckier and are still holding.

BUT we may just get a chance at a reload. See that huge volume chasm just above at at around ES 2820? I would be very surprised if there wasn’t some sort of shake out attempt and with a bit of luck and duct tape we may see a correction back down to ES 2750 as this run is getting a bit long in the tooth.

The Dollar has been gyrating around one the past few weeks and is now back at its 100-day SMA. Which is starting to flatten, and may roll over if old bucky is unable to get out of the gate here.

My new gold campaign is still alive but my ISL remains as we have not seen sufficient upside just yet.

A special goodie below for my intrepid subs:

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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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  • Jason13

    Stopped out of Wheat at b/e. Another shakeout? Wait and see.

  • https://evilspeculator.com Sir Mole III

    Wheat is a tough contract and takes finesse. Have you had issues getting filled by the way? On my end I am almost able to predict whether a campaign is going to pan out based on how difficult it is to get a fill. If the fill is too easy/good then odds support a loss 😉

  • Darkthirty

    Wheat may have been compromised by the “polar vortex”. Decent snow cover acts as insulation …..

  • BobbyLow

    I remember that “Beartard”. He was not only banging the table on his position, he was also doing it in an insulting and degreading way. The Market Gods must have seen him bragging. LOL It’s just another reminder that anyone who is absolutely positive about the future success of his or her position is completely full of shit.

    In the meantime, I got stopped on the my long position in crude this AM for +.75R. It closed weak on Friday and I would have done better closing it out before the COB but acting on feelings has been bad business for me so I had to go by my rules instead.

    Getting ready to open a short at a break of today’s low. . .

  • phantomflash

    Mole, that perma-bull you talked about forgot the cardinal rule of the stock market – “Don’t fight the Fed.” Sure, things have been kind of bearish apart from that factor, but the market got ka-Powell’ed.

  • BobbyLow

    Glad to see you didn’t get married to your spec. Getting out of a trade when you should get out is a win.

  • https://evilspeculator.com Sir Mole III

    Perma-BEAR but yeah…. What’s tragic is that there are thousands like him waiting in line. But hey – we need someone at the other side of our trades, right?

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

    oops – comment now edited appropriately….

  • https://evilspeculator.com Sir Mole III

    Hochmut kommt vor dem Fall.

    Online translations are shit but it basically means that hubris has a tendency to be met with swift justice.

  • ridingwaves

    his qqq puts that he also had might have really taken him to pauper status

  • BobbyLow

    Ya vol.

  • Darkthirty

    Another factor is if china can’t/won’t import soybeans, they might use wheat as feedstock

  • Darkthirty

    HD still out hunting desert pigs?

  • Jason13

    No not really so that may be why but no skin lost so happy to watch.

  • HD

    Never made it up there. They closed the roads. 100 year storm. Dropped 3’ in the unit we were supposed to hunt. Even got 2” in my back yard down south. Crazy.
    https://twitter.com/seanparkerphoto/status/1099530195223031809?s=21

  • ridingwaves

    ok, 10-16 and 11-8 bear move short term tops are now touched, what say you….grabbed some shorts

  • HD

    Imo SPX cleared yet another “tuff” resistance level. Watching the EOM rally for the fade. That’s been one way to play it for months. If I recall the smallest PB was 50 handles.

  • HD

    Good eye! Looking left…

  • HD

    Clean 5 waves down from 531. Try a TL and buy if when that breaks up. Jmho. Some symmetry here 471 ish

  • Darkthirty

    Couple inches of snow makes for an easy hunt, especially after dark…

  • HD

    /ZWK

  • ridingwaves

    GDP print this week is going to be weak with shutdown….might be opening for a down move to 2750.. I grabbed TZA and spxu

  • Sp00nman

    I don’t trade on news, but I don’t think this is a coincidence regarding oil’s move.. https://twitter.com/realDonaldTrump/status/1100002139282309121

  • mSquare

    Nice trade. Admire that you are not waiting for ‘some more’ and executing your plan

  • BobbyLow

    Crude closed weakly on Friday and has been on a run even though we’ve been over supplied for quite some time. And on top of that, last week showed a build in supply over what was expected and price still went up. Oil was ready for a price correction. However, I believe that news can exacerbate a move that was ready to take place anyway.

  • BKXtoZERO

    Trying TVIX 28.11 today, garbage man trying again……………

  • BKXtoZERO

    giving it a try huh… congrats on your longs… for so long

  • BKXtoZERO

    congrats Bobby….

  • BKXtoZERO

    Even the Ayatollah of TVIX tried to warn him on that one. Then I asked him to loan me some money and if it worked, I would pay him back 🙂

  • BKXtoZERO
  • Julie 35 – 25 – 36

    Hi Guys … Standing pat
    JULIE

  • ElToroLoco

    I agree with your post about permabears but there is actually some valid technical reasons why a short here ES aiming last week 2278 is valid and if it doesnt hold or make a pattern in the area the spike up will be yuge like Trump says. if there is too many short interests will die flat for a while.

    Copper has some more room but not match.
    NG anyone?
    Yeah Gold tested the R area fairly accurately.

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

    yes, you can see the temptation on the left side of the chart. (APR/MAY)
    I suppose one could do the trailing stop thing.
    but just look at that jumpy MOFO.
    I was in the trade waaay too long. a target is a target.

    Next thousand Trades.

  • https://evilspeculator.com Sir Mole III

    100 year storm? Wait until 2020 🙂

  • https://evilspeculator.com Sir Mole III

    Jawohl 🙂

  • HD

    Ha. I have no idea how they label these storms. It was massive though. Snow in the desert is surreal.

  • Jason13

    2278? Is that a typo?

  • BobbyLow

    Online translations can come close but as you said, for the most part “sind scheiße”.

    I mentioned before that I spent 3 Years in Germany back in the 60’s. Back then I learned just barely enough German so that a non-english speaking German could probably understand every third word I said. 🙂

    If I remember correctly one of the most difficult things I found about translating from American English to German and vice-versa was the difference in sentence structure. But I suppose that could be the same for most languages.

  • BKXtoZERO

    Looks kinda of bull flaggish at 2pm EST area.

  • ridingwaves

    I’m getting a bit giddy about NG possibilities..in trade already…but its the widow maker, expectations are tempered…
    https://disqus.com/home/discussion/evilspeculator/whipsaw_galore_04/#comment-4349911375

  • ElToroLoco

    ups yes it is 2778 last week area

  • Mark Shinnick

    Putting on some shorts…very tight.

  • Darkthirty

    Speedos?

  • Mark Shinnick

    …its only a speculation 🙂

  • BKXtoZERO

    I made some bux on that first bump weeks ago then never got back in. Nice trade RW

  • Darkthirty

    Gap fill before the close?

  • Mark Shinnick

    Not usually.

  • Darkthirty

    Been very tentative shorting, saw too many down signals get obliterated like they were merely smoke………charley brown/lucy/football

  • Ronebadger

    SPX up 0.20% … AND … VIX up 9% ….. Interesting….

  • BKXtoZERO

    VIX can be seen as bullish falling wedge pattern on daily level. This clown is holding here…. Keeping today’s entry which is larger than my small daily position that I have been taking dings on.

  • mSquare

    Also interesting that $RUT has been under-performing large-cap like $SPX.

    Awaiting retail to tell the earnings stories rest of week. Observing HD and hedged longs in LB and M

  • bankwalker

    selling SBUX, BLL, and PAYX for a day or so, or maybe more …

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

    took some QQQ’s off the table.
    A little King cake to celebrate. Fat Tuesday is next week.

    https://uploads.disquscdn.com/images/d8c61754b50fd16e770bb0e4e2847f69225af1492d9410fc8c0231e97b828429.png

  • bankwalker

    lotsa sell signals – especially REITs

  • BKXtoZERO

    you made some long money? Fins or Sawbucks?

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

    I really don’t count, but short term I do notice EW a bit…. when a 1 up gets crossed it is the classic tell and on a short term basis, it is kind of accurate. You see certain areas protected and they are often wave overlap points. HD and some others on here use it in a smart way. My approach lately has just been what I call carpet bombing. There is just no way to know, and I show up almost every damn day and take a shot. The downside is lots of stop outs and looking like a jack ass here most of the time….. but when they hit things get pretty sweet pretty quick.

  • Mark Shinnick

    No shit? That’s pretty friggin’ damm important. A “almost” in my own models FWIW.

  • BKXtoZERO

    Dedicated to the late night futures buyers…… “Send in the Clowns” by Pat Martino

    https://www.youtube.com/watch?v=x7cfgolCMWw

  • Julie 35 – 25 – 36

    Hi BK.. As stated Friday this could be quite a week
    JULIE

  • Julie 35 – 25 – 36

    BK SPX The daily 5 ema intersects a lower trend line approx 2784.
    JULIE

  • ElToroLoco

    well it didnt take long … area was hit.