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Threat Down!
50

Threat Down!

by The MoleApril 19, 2013

The RTV Sell we took on Wednesday is dangerously close to running out of steam and the bears are now officially on notice. In the current market conditions two days without closing the deal on a short setup is absolutely impermissible and we all know what usually comes next – some gapping action that traps the bears followed by a squeeze.

Now I don’t want to be hasty so let’s look at our charts to provide us with some technical inflection points. If you’re short right now you may have your finger on the trigger but I would suggest you stick with the charts and don’t let your emotions do the trading.

The daily is now starting to provide us with much needed context. After two rather useless sessions we remain near our RTV Sell entry point at 1542 (one tick below the Tuesday low). Yesterday I suggested to lower our stop down to the 100-hour SMA but as we’ll probably paint an inside day things are coming a bit more into focus. Assuming the IP holds our stop moves to one tick above today’s highs starting with the Sunday night session.

The VIX is now in round two of attempting to paint a VIX Buy Signal. Odds have it that we’ll complete step 2 today which leaves us with a lower low on Monday to produce final confirmation. Again I would not count the chicken before it’s hatched – there’s always the chance that this is a bull trap and that we descend lower. Granted the odds are not great for that right now but I personally plan to hold my short positions until I’m being stopped out at 1550.25 (as of the current candle). FYI, the 100-hour SMA is currently at 1550.50 something, so I still think that it’s a great binary inflection point. I leave it up to you how you handle your position but whatever you do stick with your charts and with the plan.

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We’ve had another good week and once again it’s time to kick up our feet and crack open a bottle of our finest brew. As usual I’ll stick with chilled glass of Franziskaner – liquid bliss I say! 🙂

Prost!!


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://ibergamot.blogspot.com/ i Bergamot

    A, I’m right on time.

    Thanks Molecool, CS, DG, Ivan and all
    Have a great weekend everybody

    PF moving average update. (Not for intraday trading)
    Crossing again, but like all MA’s prone to whipsaw, even more so lately
    Fool me once, then twice and now…… kinda LKGB? (can I even apply this concept to MA’s?)
    Don’t you love round numbers? How about target 1500SPX
    And look – all those late buyers from 1500 to 1560 on huge 24bil volume….

    Back into cave (I am surrounded by merciless slave-drivers)

  • Skynard

    AAPL Chart, the hourly presents an impressive hammer candle and div. Will only keep this long for a short period in anticipation of a deeper correction on the horizon. Oh, the Marines are in the house!

  • newbfxtrader

    15.30 ramp pending…

  • http://twitter.com/D2point0 Daron
  • http://dartht.blogspot.com/ Darth_Gerb

    ah, good to see you alive.
    you too!

  • Thunder44

    What do the blue arrows on the zero represent.

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

    SPY 156 calls for a penny…any takers?

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

    signals.

  • newbfxtrader

    Mole signal for scalping.

  • Thunder44

    Thanks.

  • Skynard

    They are Mole signals. They represent exhaustion moves, a down arrow sell/up arrow buy.

  • Skynard

    Next week, holding longs over:)

  • Skynard

    You made it through the week, ah?

  • http://dartht.blogspot.com/ Darth_Gerb
  • newbfxtrader

    Good work. Enjoy the weekend.

  • Skynard

    Nice!

  • Skynard

    Thanks, you too!

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

    They are not going to get me that easy!
    Bergamot is a light and buoyant fruit – always floats to the top, like….
    (ok, ok , I’ll behave, lest my rants be redacted away)
    😉

  • Peter Levchenko

    I’m still long usdjpy. I bought 3month 105 vs 110 call spread on that Boston bombings panic pukeville down to 95.67. Importantly the 95.88 25day ma held really well on the close, and the way the pair has bounced back to highs is almost a perfect copy of the correction we had from 94 smth down to 90.88 a few months ago. Check the daily chart: huge spike down candle, and the low is usually seen that same day. Then follows 1-2 days of chop but the pair makes progressively higher highs and higher closes. And today we finally broke out of that dreaded 98.50/97.00 consolidation range and now closing near the 100 mark. Check out the weekly too, huge hammer candle this week.

    I’m not going to go into the fundamentals of the trade but they remain unchanged. What’s amazing is I thought Japanese would be huge sellers of JPY post latest BoJ meeting, as they rush to sell their JGBs and buy foreign bonds. But shockingly latest MoF data shows Japanese have been net BUYERS of JPY in recent weeks and even after BoJ.

    I believe these flows will have to reverse as inflation starts to hit home via higher import costs. And Japanese will be the driver of the next big leg up in USDJPY.

  • TumblingDice

    Somebody will get screwed here, either the foreigners or the Japanese. Foreigners have been buying the Nikkei just now after selling it on the way up. Like you said foreigners are also the ones who have been selling the yen as well. Never discount the possibility of the foreign investor getting fleeced.

    The technical picture is very clear here IMO. Pretty good risk reward shorting USD/JPY going into the weekend. Just below the recent high, with a stop and a flip above it. If it can’t make a new high VERY quickly, as in early next week, then it goes down having just confirmed the top with a lower high. Otherwise a new high indicates a resumption of the trend with the next target being 110.

  • Th3_Acist

    My bias just cost me 100 pips, I’m a bad, bad man…

  • BobbyLow

    Second Suspect in Boston Bombing is in custody!

  • Th3_Acist

    9,000 vs 1 ….finally.

  • convictscott

    Evidence is that the gap fail caused a drop down that has been pretty short lived. The short side (which I myself posted the setup for) is still arguable, but hanging on by a *thread* technically. Friday opened at the daily lows, closed at the highs – ergo bulls in control start to finish. Same picture for the week, the long tail on the candle indicating (another) failed attempt by the bears to wrest control. The price action this week gives a nice opportunity for bulls to raise their stops to the weekly low of 95.80, as if the bullish case is valid that low should not be tested

  • convictscott

    I wish him a long and terrified life in prison!

  • convictscott

    For shits and giggles I’ve been trading bitcoins (I know its a ponzi but I made a heap of money out of the bitcoin bubble) Because there is no professionals playing the game and the tools available in terms of trading are poor, technical analysis works unbelievably well. I can actually recommend it 🙂

    http://bitcoin.clarkmoody.com/

  • convictscott

    Interesting situation for you. We all get biased. The very act of looking at a chart and thinking about a trade starts the process of subconsciously wanting that trade to work. I got biased shortside on USDJPY this week despite me posting “the odds are low for this trade.” Insidiously that also starts the process of collecting evidence to support your view (even demonstrably idiotic things like hindenburg omens, sentiment stuff you never heard of before, blogs you don’t usually read, analogues with no basis in science), and ignoring that which does not support it. At its extreme you end up like the clowns on the slope, huddled together for warmth consoling each other that “one day we will be right and America goes down the toilet”

    Speaking for myself many times a suboptimal biased exit, or missed trade has set off a pattern of several weeks of poor trading (poor trading is not following the rules). When I am in this situation I have several filters which stop me being a fuckranaut, an astronaut travelling to the planet fuckhead, trying to trade my way back. When I make a mistake, a clear violation of the rules, I have to stop trading for a week and work on my trading game. I force myself to feel the unwelcome emotions of fear and worthlessness that arise from poor trading. When I feel myself getting into emotionally painful screenwatching obsession, I only look at the charts on the timeframe I trade. I currently trade 6hr charts, so that means I cannot even load the chart until 6 hrs is up.

    When I have a series of losing trades that I have traded well for (2 weeks ago 6/7 losers) I force myself to give myself a pat on the back, and reinforce that what I did was correct and that losing is a natural part of trading. I connect with my “internal self” and ask it what it would like to do as a treat. Usually for me that is a meal at a 5 star restaurant by myself, reading a book in a park somewhere, and a leisurely walk along the river or beach where I live. It is *important* to stay connected to the long term goal of being in the markets and still profitable in 30 years time. In that context this trade, the next trade, only matter in so far as one of the next thousand trades.

    Ivan who posts here is perhaps the most emotionally centered person in a trade I have ever met, he has a far greater emotional tolerance for losing periods than I do. He will not vary his approach after 2 months of drawdown. He is *not* an emotionally calm and centered guy though, he is as cantankerous and argumentative an old bastard as you would meet in this life (I love him dearly though) but he has concocted a system for *everything* trading related that gives him little room for bias.

    When I started working with Ivan again we looked at things like the order at which I checked the markets in the morning first thing. Doing things the same way, every time. Managing the exits from my trades the same way every time. Filling out my trade spreadsheets the same way every time, and setting aside time to go through my results to gain insight on my performance every time. The beautiful thing about trading is the opportunity to improve yourself and your character using the markets as a metaphor, and a mistake is the perfect opportunity to work on yourself 🙂

  • Th3_Acist

    That’s part of why I love trading, the mental battle within. My problem was winning (I know right) however a few months ago I went 11/14 on trades but stopped trading for 3 months because subconsciously I knew I didn’t have a clue what I was doing, no exit or entry strategy. My brain literally knew that this couldn’t continue so luckily I was able to stop, now entries are a little clearer but trade management is where I’m deficient. I trade extremely small lots and use the -2r rule and am trying to learn as I go. I have another source of income and am 28 years old, so I’m in no rush to develop this skill. I enjoy it so much anyways It doesn’t even feel like work or studying. This week I had bearish views on USD/JPY so I only took short entries on the daily, knowing damn well that if 98.50ish was broken it should be good for a run up but still only took the short…thus missing out and hopefully starting to learn a very important lesson. You guys here have helped me and continue to help immensely in this endeavor errr campaign!

  • https://evilspeculator.com molecool

    Well done, Helmut!

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

    Those are the odds of him getting Jack’ed Rubyied.

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

    I signed up for an account several years ago, never funded it. Then Gox was compromised, and I couldn’t differentiate legit from spammers. wHen the ETF fund comes out, I’ll pick some up.

  • BobbyLow

    Here is copy of a tweet from “Happy Gilmore” – Adam Sandler

    “Boston is probably the only major city that if you fuck with them, they will shut down the whole city…stop everything.. and find you.”

    I am proud of Boston.

    BTW, now we are getting all kinds of talk by prominent defense attorneys on whether this crime comes under Federal Terrorism or State Murder Laws concerning this scumbag’s rights.

    The perpetrators were not concerned about the rights of the people they harmed and the people that they murdered experienced a terrible death. I saw a picture of one of the surviving victims who was being transported on a wheelchair from the scene with his foot blown off and his entire shin bone exposed from his knee down because all of his muscle tissue was gone.

    I wish I had never seen that picture.

    There probably is not a fitting punishment for this bastard.

  • http://twitter.com/D2point0 Daron

    Zum Wohl!

  • Ivan

    By that time the market will be far more ‘mature’ and early player advantage will be greatly reduced … additionally the entire EFT market is an invitation to feather someone else’s nest, so to speak … the time to strike is early!

  • convictscott

    Agree, its money for jam right now, and it is not ever going to be a buy and hold suitable thing (seeing intrinsic value is zero) Inside day about to trigger shortside. FYI the last losing trade according to your setups was in the first week of January. Something like 20/20 right now 😉

  • convictscott

    Ivan – The high volatility environment in AUDUSD this week produced outsized returns on the 6hr 🙂

  • convictscott

    And yes I *know* it is a retest variation inside period long at the lows 😉

  • Ivan

    More to the point, the Shooting Star was on the back of my STH sell setup … this provides the increased probability of a larger return … the devil is in the detail.

  • Ivan

    Interesting on the data I use to spot the setups (as opposed to my broker’s data) the setups were slightly different … tho still a similar ‘normal’ return to yours.

  • convictscott

    I played around with time templates a bit this week, hence my question to you earlier in the week. Similarly I am noticing similar but different returns using different times for the 6hr bars

  • Ivan

    Pretty much as expected and my experience also … means that the risk of bunching is greatly reduced … doing time-shifts is another rather neat and positive exercise.

  • newbfxtrader

    Really enjoy these charts. Thx!

  • http://www.yepi250.com/ yepi250

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  • http://www.yepi6.org/ yepi6

    I wish he’d never seen the sun for the rest of his days. and all those who have clay will be severe punishment law.

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  • http://www.yepi-yepi.com/ Yepi Friv

    More to the point, the Shooting Star was on the back of my STH sell setup … this provides the increased probability of a larger return … the devil is in the detail.