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The Final Hurdle
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The Final Hurdle

by The MoleJanuary 31, 2019

The Fed caves and the bulls run – for now. In a nutshell Fed Chair Jerome Powell told the market exactly what it wanted to hear: No key interest rate change combined with more dovish commentary. Which frankly wasn’t a big surprise as the Fed had pushed rates as high as they could without causing a wipeout in equities.

From a technical perspective the recent bullish action has however not yet eliminated the medium to long term bearish scenario. We may get there soon as the price action is looking encouraging, but the final hurdle for the bulls still lies ahead.

The E-Mini is now in the process of crossing the volume hold with the psychologically crucial 2700 mark positioned smack in the middle. The final hurdle I’m referring to however is positioned about 30 ES handles higher, near 2730.

The 100-day SMA was tested three times late last year and did not budge, which of course was eventually followed by a major sell off. The median of the preceding sideways range almost exactly lines up with the 100-day SMA, which is why I consider it a technically viable resistance zone.

Here’s the long term panel which shows us a successful retest of the 100-week SMA and unless all hell breaks loose today a close > the 25-month SMA appears to be a shoo-in.

After yesterday’s Fed sponsored spike higher it would not be unusual for equities to spend a day or two pushing sideways in order to take profit, gauge momentum, and decide how to re-allocate exposure. The SQN panel supports that view, as does the realized volatility cycle below it.

Gold continues to exploit continued Dollar weakness and has now managed to cross the median of the LT churn zone shown above. It’s amazing to consider that gold basically has been treating water for the past seven years.

Something else is going on however, which may have implications on how trade precious metals going forward:

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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

    Just a heads up in case anyone is watching USD/JPY. Descending bullish wedge with RSI divergence on the 15min…looking to break back up potentially.

  • StockTalker

    /YM looks to be about a 62 retrace at 25k. Added to my short play

  • zzezzezz

    same here. right at the 200 DMA too

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

    -16°F in snowy SW Michigan today. Rain on the weekend. That is going to suck. We have a ton of snow, and we’ll definitely get flooding.

  • Jason13

    Yikes that’s a nasty combination

  • StockTalker

    Last lot of TVIX, see if there is a reaction.

  • StockTalker

    /NQ had some unfinished bus. Was actually keying 7k but was also targeting TVIX @ 40.

  • BobbyLow

    Good luck Captain – Stay safe.

  • maxcherry

    getting close to the upper channels, Friday unemployment report could be the short term top (or the new moon, monday)

    https://uploads.disquscdn.com/images/6c0bfde3e2b78f809a42828b960dda41d6ec9e5c7d03c898c5e08788d879df81.png

  • kim

    Nice channel

  • Jason13
  • Jason13

    Seeing lots of click bait on Gold rush…wondering if someone needs to sell to retail.

  • Jason13

    I’m short Euro at 1.1491

  • Mark Shinnick

    Yeah, CB… started some short miners, tight.

  • zzezzezz

    …wait for it….
    ….waaaaaiit for it……..

  • HD

    Round numbers after EOM rally.

  • Mark Shinnick

    Too soon for that trade….but nice attack on euro.

  • BKXtoZERO

    I put some back on… DUST 18.6, saw your update but leaving mine on for now. Thanks.

  • Mark Shinnick

    When gold runs, stops and objectives don’t seem to mean as much…it becomes more guessing game….dangerous stuff.

  • maxcherry

    i posted a chart of the ZBT about 20 trading days ago (feb 4th will be 20 )

    last 9 times the spx rallied higher 9 out of 9 times barring a massive selloff by feb 4th it will be 10 for 10

    https://uploads.disquscdn.com/images/735bc98122c0bfbc47aa473f59f4bbf9a47722c4543389b65d2608f090414f68.png

  • Sp00nman

    Crazy market, not sure what to make of it. Market’s been rising on weak buying but I guess that just means there’s a complete absence of sellers. Bonds rallying, market rallying, everything rallying. Nat gas heading lower, sure is taking longs to the woodshed.

  • StockTalker

    Last of the blow-off hot air.

  • BKXtoZERO

    long DUST again after stop out yesterday, today NUGT appears to be diverging on RSI and volume, struggling at yesterdays high https://uploads.disquscdn.com/images/89dc71a2e0fb6a12674ef678aca6b061081ccc93134d7bd94ff9e39d17aa25a5.jpg

  • https://www.youtube.com/playlist?list=PLEx52bnnbLmh2dnV_Vyq1ErXT79LSU6pT xenoson

    Don’t fight the market, don’t fade end of month move.

  • Jason13

    Yeah Gold is weird like that….i gotta keep a close eye and be prepared to be wrong

  • BKXtoZERO

    Long Nat Gas via UGAZ 1R at 36.9 for a hold

  • Yoda

    We are finishing the month at the high.
    This however does not mean that February will be similar. IMO, this is a good time for bulls to take profit and re-assess. We are about 10-15 handles away from the acceleration line (assuming a change of the LT trend from Bulls to Bears). For me the LT Bear trend scenario would be invalidated above ES 2740-50. IMO, now is time to pay attention and avoid getting positioned heavily on one side or another.
    https://uploads.disquscdn.com/images/a5a9a1943988c036b1a34ce0ac997a29f9c3b639a02f2b111fbb3f76091ea26b.png

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

    Yes – when the next major move begins will be plenty of opportunities to be involved..

  • ridingwaves

    XLF canary in coal mine

  • StockTalker

    Who pushed the button?

  • ridingwaves

    lots of resistance here, similar to SPX…overbought on stochs, not on RSI…momo still bearish..
    https://uploads.disquscdn.com/images/da260679917f9a6306e71048d18cb48adc6256596a11c5c163026a28950358fb.png

  • StockTalker

    Grabbed some DUST in the heat of the moment.

  • TomW4

    Julie? 😉

  • Julie 35 – 25 – 36

    As RW posted below XLF canary in the coal mine $BKX rolling over. I have been monitoring the Banks ($BKX) also. Extremely important
    JULIE

  • Julie 35 – 25 – 36

    Hi Tom I am here. What a week !
    JULIE

  • ridingwaves

    dangerous here to short…..momo clearly in their favor, not in gold bull favor is China market closed next week, but if the weekly stays above 1310, my lens is saying 1495 target….weekly view, not scalping view,

    adios, 4th airport in 2 days…..

  • TomW4

    Glad to hear from you! Was waiting for your comments about SPX =)

  • Julie 35 – 25 – 36

    Tom There is a ton of overhead resistance and now Banks rolling over. Also $TNX declining and not confirming $SPX. Canaries chirping louder than ever Bond market seven times larger than the equity market JULIE https://uploads.disquscdn.com/images/3d9560ee4e7b666403f7a418dabbe62a03aeef137ea8602cafe33f00518dc77a.png

  • TomW4

    Aren’t you worried that this market may keep on creeping higher though? As Mole said? We’ve been on the short side since sub 2600.

  • Julie 35 – 25 – 36

    No I am not worried esp with the Banks rolling over and TLT rising
    JULIE

  • StockTalker

    Yes, down largely today. I call that smoke in mirrors.

  • Julie 35 – 25 – 36
  • Ted

    Could be forming a bull trap. Much of the wall of worry is gone as well. Still sick that I missed most of this move.

  • Yoda

    Still waiting for Gartman to say out loud that the is now long stocks

  • evilasevildoes

    klac to 90

  • Julie 35 – 25 – 36

    Ted I missed most of the move too When in doubt like I was best to be on the sidelines even with a missed move. One thing you don’t want to be is a late bull and have a pullback. We just buy the pullback if it is corrective. That’s all Tom
    JULIE

  • Mark Shinnick

    Remarkable drv, almost 50% from when I dumped my calls 12-24-18. Anyone betting on the big one got so hammered. Yet….what’s happening really is quite insane.

  • Darkthirty

    PPT-algos-imminent tweets-what a clusterfuck

  • Jason13

    This morning I was just a button push way from shorting Palladium (hit a big fib) and I chickened out cause its so thinly traded….missed 40 pts. Huge. Shit!!!

  • Mark Shinnick
  • Mark Shinnick

    Do a smaller exposure. That way you don’t beat yourself up for not executing plan.

  • Mark Shinnick

    SH pretty damm interesting inflection here.

  • Darkthirty

    Looks like Soylent has competition……….

  • BKXtoZERO

    Like your post above which was good advice, take a smaller position so you don’t beat yourself up executing plan. I have small DRV yesterday, and small Nat Gas from today

  • Darkthirty

    Gut says AH gonna be a bloodbath….

  • BKXtoZERO

    Long some TVIX 40.8 ….I have been watching space on vix between last week or so and the 2.0 Bollinger for a shot at a signal. I haven’t been aggressive particularly with any holds

  • Julie 35 – 25 – 36

    Guys bifurcation $SOX unable to make a higher high — $BKX rolling over — DOW down — Mid caps wedging … Getting popcorn ready Gonna be a good show !
    JULIE

  • BKXtoZERO

    I am rolling over….

  • Ted

    He got long weeks ago.

  • https://www.youtube.com/playlist?list=PLEx52bnnbLmh2dnV_Vyq1ErXT79LSU6pT xenoson

    Only pullbacks to rising vwap so far.

  • evilasevildoes

    soxs to 11

  • evilasevildoes

    hmm soxs stopped it its tracks

  • BKXtoZERO

    Just in case you are thinking that life is hard…. Watched the movie FURY which is WW2 movie following an American tank crew. They talked to living vets and subjected themselves to trying to live the life preparing for the movie. Brad Pitt did a great job…

  • Julie 35 – 25 – 36

    EV AAPL If it does not fail here at it’s 55 ema (166) You have anything AAPL? I have a target 176
    JULIE

  • Jason13

    …note to self…thanks Mark

  • https://www.youtube.com/playlist?list=PLEx52bnnbLmh2dnV_Vyq1ErXT79LSU6pT xenoson

    Bear opportunity now testing vwap from below. Unlikely this day will turn into full reversal last 30 mins. Probably push through vwap and close strong.

  • Julie 35 – 25 – 36

    IMO SPY 269.51 important A close below AND …. !
    JULIE

  • evilasevildoes

    2688 on spx in about 10 min

  • Ted

    I’ll bet you an ice cream Sunday.

  • Jason13

    Yeah I don’t know where you get that….Zero showing its heaviest buying right now and it just found support at VWAP.

  • Julie 35 – 25 – 36

    Ted .. SPX A bounce EOD at the 60 min 8 ema … But of course !
    JULIE

  • zzezzezz

    i see SPX going to 2730-2742 before i short it

  • Ronebadger

    You meant, 2699, right?

  • Jason13

    Yeah me too. Short is a crowded trade right now. 70% of retail is short.

  • BKXtoZERO

    Time check (for the Gerb)

  • Ted

    Friday – another up day. IWM to 100 day SMA – why not.

  • Ronebadger

    Yeah, that will be around the top of the rising channel…I’m watching and waiting…might be soon

  • Julie 35 – 25 – 36

    SPX on very wobbly legs esp with Banks going to need the banks
    JULIE

  • Jason13

    There’s an issue with Zero

  • Jason13

    Fixed now

  • Julie 35 – 25 – 36

    Jason …? ? ?
    JULIE

  • Ted

    Long IWM

  • Jason13

    Yes?

  • BKXtoZERO

    Took half off dust and tvix…. Keeping small positions drv dust tvix and ugaz Another day another ding.

  • Julie 35 – 25 – 36

    Not sure .. Strong finish anyway. A lot of ifs here There was some good day trading today but I just watched
    JULIE

  • Jason13

    Yeah me too….I played in other markets today.

  • Ronebadger

    Last minute dump, rather than a pump…but oh well…yes, a strong finish.

  • Julie 35 – 25 – 36

    SPX out of the triangle on D leg
    JULIE

  • Julie 35 – 25 – 36

    RB out of the triangle on D leg .. a curve ball thrown
    JULIE

  • Julie 35 – 25 – 36

    Today follow thru on yesterday’s FED pop . One day at a time
    JULIE

  • Ted

    AMZN – beat

  • maxcherry

    if the spx gets back on it’s seasonal track and so far it looks like it is, the bears are in for a world of hurt.

    https://uploads.disquscdn.com/images/ff9ad979f66e7ad133a5ef9863bfe2f47f8e363cc98b440a85819f8ac00a1522.png

  • Darkthirty

    AH went up 50…now down 7 Hmmmm

  • Ted

    yup – the charts suggest this will happen. Once price gets between the Keltner and Bollinger bands it can just keep on running. This may turn out to be the most hated rally of all time.

  • Ted

    A little short on revenue but a substantial beat on EPS.

  • Ted

    Donald priming the pump!

  • Ted

    401K money coming in next.

  • Julie 35 – 25 – 36

    SPX Going to be interesting … Confluence of fib arc ; 61.8% retracement and Fib Time Zone JULIE https://uploads.disquscdn.com/images/d5e20280cbb794df7f4f587762306541677220c3c41988888aa53b739aa52c74.png

  • Darkthirty

    Can ya get a “T” on there too?

  • sutluc

    For what its worth (I don’t use RSI divergences any more) what I understood when I did use them was that you need actual tops (or bottoms) in price to establish a divergence. In other words your line drawn over price would have to be ascending for the RSI descending line to mean anything.

    Also single lines drawn between corresponding points.
    Also they become more reliable on longer time frames. Hour is about the minimum IMO.
    Also seemed more reliable if the RSI line stays above or below the 50 level while creating the divergence.
    Also I don’t use them.

  • evilasevildoes

    look for price to hold 45 degree angle..44.5 ok too also there are dips in mid arc band

  • evilasevildoes
  • http://ibergamot.blogspot.com/ i Bergamot

    yes
    but you have to use August 29 as a left side, for 80 days span to centerpost on Dec 24. This simple Advance-Decline T projects top of stocks at the end of April 2019 and (if this bull market to continue) will be overrun.
    In my interpretation of T-Theory, the Real A-D T has not been completed yet and any calculations at this stage are premature wishful thinking.