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Thursday Morning Briefing
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Thursday Morning Briefing

by The MoleAugust 29, 2013

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

The spoos managed to recover a little overnight but I still don’t see any major mojo in either direction yet. I can appreciate that fence hopping is not everyone’s style and I respect Scott’s style of holding the existing short entry. If you recall on my end I managed to hedge myself via the NQ and that’s still working in my favor, thus I haven’t lost out due to fence hopping during the recent whipsaw. That is the one advantage of discretionary trading and it’s something that’s very difficult to train to an automated trading system.

Be this as it may nothing really has changed on the equities side. This puppy may still swing either way and I patiently await resolution. This is not a question of opinion – simply one of putting yourself on the right side of the trade during a honeypot period. I don’t know which way it’ll resolve but what I do know is that the losing side will pay a big price. FWIW – trading styles may be debatable but the current inflection points appear clearly to be observed – so however you play this thing keep an eye on the daily and weekly NLSLs and the 100-day SMA.

Gold has been taking a little breather and is now facing the Pincer maneuver by the 25-hour and 100-hour SMAs. I expect it to bounce around here for the next hour or two and then pick a direction. Mind that NLSL at 1406.3 which is good until well into the NYSE open. But there’s one contract that just came into sync – please step into my lair:

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Addendum 9:44am EDT: I just realized that we painted a shooting star yesterday and there are implications:

The series of lower spike highs and spike lows means that we are in a bonafide downtrend on the daily panel. And that means that a breach of a shooting star low represents a short entry. Which now gives us two strikes to be short – the NLSL at 1631.5 and the low of the SS at 1624.75. If we close below those two today then it’s sliders time.

However, until that happens we remain stuck above an important inflection point and the bulls have an opportunity to pull this thing out of the mud (stranger things have happened in the past few years).

Have fun but keep it frosty – this tape is designed to soften you up and draw you into bad trades.

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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  • BobbyLow

    Nice Overnight Debut for the CI 480 EUR/USD

  • RacerXX

    Scott needs a bigger gun.

  • bdoone

    Equity P/C ratio, $CPCE, on 2 sources went from .68 to .34…Drop is big enough to question its validity, which is why I checked 2 sources. so far. I know a few people post and follow CPCE. Any thoughts?

  • Ronebadger

    CBOE has 147/407 P/C volume … something is wrong…don’t think it’s valid; too low

    http://www.cboe.com/data/PutCallRatio.aspx

  • Skynard

    Quite a slide, long side not broke yet. /ES 28.5

  • Dyellowflash

    I counted a total of 6 F-Swings since I traded against you last morning UST… I have TP-ed all my shorts except a small position. Awaiting new signal from zero while i remain slightly biased on the short side.

  • https://evilspeculator.com molecool

    Please reload this post as I just posted an addendum.

  • Darkthirty

    Algo generated short squeeze, but will the shorts bail? Does it matter

  • captainboom

    Longer term – SPX weekly hammer last week, weekly OP this week. Hmmm…

  • Skynard

    How’s that? Still in some of those trades. Mainly scalp the /ES, guess if people are going to start grading me I’ll have to stop posting.

  • Skynard

    Fuck ya, what do you think?

  • Darkthirty

    digital market, currency, statistics, is any of this real?

  • ridingwaves

    short NG..small lot…

  • Dyellowflash

    Grading? No – I meant it was an observation from the past few mths that when we trade opposite direction, either the mkt swings around like brazer or I will be right ST while U got it right slightly longer timeframe. So I learnt from my experiences and keep TP-ing my shorts at ST opportunities which was what I did the whole day. But the process wasn’t fun – like having to run from one bomb shelter to another throughout the trade duration.

  • newbfxtrader

    bearish engulfing? weekly candle.

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

    How about 2 VIX buy signals in a row.
    Anybody has stats on that?
    Thou, the second buy signal has to wait to end of day…

  • Fearless

    Give me some time. I’ll run it.

  • SirDagonet

    Are you related to Ned Davis? 🙂

  • Pervergence

    Still s GC

  • Pervergence

    Looks like GC is picking its direction….

  • Pervergence

    (I’m never posting a Wolffe wave again)

  • BobbyLow

    Sky, You still “Da Man” who is one of the best counter trend, divergence readers, I’ve ever seen.

    BTW, this is not a grade just an observance. 🙂

  • Skynard

    Go Bitch!

  • ridingwaves

    out with tiny amount left for shits and giggles…someone wanted in down here

    all out, good profit…work beckons…

  • Skynard

    Target, upper BB @ 62.

  • Skynard

    Target, upper BB @ 62.

  • Fearless

    Two VIX buy signals in a row (defined by two VIX buy signals confirmed in one week):

    -Two instances occurred in choppy markets (sideways)
    -One instance right before the big crash
    -One instance right before the maga ramp
    -Two instances of upward move following the signal
    -Two instances of downward move following the signal

    Conclusion: No edge whatsoever since the probability is exactly 50/50.

  • Dyellowflash

    Ok… saw the rip up just now? THAT was what I was talking about – running from one bomb shelter to the next when trading against Skynard. Bagged the coins though 🙂

  • SirDagonet

    I’ve had Disqus sign in problems for a couple of days, but wanted to respond to Jaime’s comments on the System Development Crash Course thread a couple of days ago:

    “Jaime:

    Good synopsis of Van’s kool-Aid.

    Sample size (root) is under represented in the equation. If
    I recall, there are many discussions on system dev forums on that very issue.
    The truth is none of these measurements prevent you from Curve fitting.

    Give me an SMA cross over and a volatility filter and I can
    curve fit 100 trades into an equity graph that will make you salivate and
    satisfy most of these measures. But when the system steps out of sample it dies
    a horrible death.

    System developers should rather focus on the variances
    between in sample and out of sample. I’ll take .1R that survives a very large
    out of sample rather that a 3R that fades into oblivion during extensive WF
    tests..IMNSHO”

    Interesting points, Jaime…

    1. I think Van sells a lot of Kool-Aid also – with a graduate degree in psychology (not a PhD as he has), I recognize some of the psycho-babble he peddles. Some of the crap he promotes infuriates me as much as the sentiments I’ve read here in the last couple of days about Precther.

    2. However, as a non-mathematically inclined (I gave up after 2 semesters of calculus) wannabe trader, I have difficulty separating the wheat from the chaff in the trading arena. Over the years, I’ve traded several systems marketed by well known developers, that have collapsed in real time trading. SOME of the problem, I must hasten to add, was my own ignorance of and/or failure to adhere to proper risk management (regardless of the particular style). But – many of the systems were curve fitted, improperly (developmentally) analyzed, etc. and I didn’t know enough to discern the “truth”.

    3. Having said all that… I’ve corresponded with Mole & Scott a number of times as this project has evolved (even been the subject of Scott’s inclination-not-to-suffer-fools) and I have more confidence in this system than any I’ve ever considered. I honestly believe they have made a highly educated, informed, and experience-based effort to bring something to market that stands a good chance of profitability and longevity with integrity of intent.

    4. Full disclosure:

    a. I have no financial interest in their project other than to trade it on my own

    b. I have “known” either/both of them for a shorter period of time than many participants in this forum

  • ridingwaves

    jumped in short spx..tight stop so I can work

  • Darkthirty

    Just got in, too. Getting signals but this ramp looks faked, can’t wait to see what nanex has to say about this AM tape

  • Skynard

    The ones that run are big coin. Today may be one of them:) /ES resistance at 44.

  • Darkthirty

    Catching resistance at the 43 trendline

  • BobbyLow

    I’m a big believer in the KISS method. I’ve only read one book by Tharpe and that was one that Scott recommended awhile back. In it’s most simplest form, what I got out of the book was a deeper understanding of having a trading plan with rules for entry and exit, that have been back tested, forward tested and demonstrates a positive expectancy. (This probably reads like the AT&T Television Commercial with the Nursery School kids sitting on their little chairs while the teacher is trying to make the point being “It’s not That Complicated”.) But it really is not that complicated!

    Anyhow, the above has helped to keep me in the game. Most of the stuff I’ve read in books, read here, or through actual performance has to fit my personality or it just will not work period. Been there done that.

    Also, I’m wondering who said anything like 3R was the norm? OTOH, what kind of size does one have to trade to make any money turning .1R?

    http://www.youtube.com/watch?v=wguSXbUe2hw

  • bdoone

    could be the 100hr sma 1644.25

  • Pervergence

    might be jumping in front of a train….pretty strong looking candles

  • Skynard

    AUD bulls gaining traction here.

  • Pervergence

    GC keeps tapping the lower BB in multiple timeframes ….

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

    (month end)..abandon all logic.

  • Pervergence

    I guess that’s one way of approaching things…

  • Pervergence

    Crude looks to be wound up tight….

  • captainboom

    Tomorrow should be a sleepy session. US markets closed Monday for Labor Day.

  • Darkthirty

    618 of 3 now, or we go to gap fill mode

  • ridingwaves

    looking for 7 yr auction to drain it a little

  • Darkthirty

    Sunday1700 to 1030 Monday. re open Monday @ 1700

  • Pervergence

    Just wondering….thanks

  • Darkthirty

    breakdown, go ahead give it to me……….

  • momac

    miners are bouncing back, I wonder if this is all of the pullback in gc and si we’re going to get, hmm, just checked platinum and it’s not bouncing,

  • Pervergence

    Looks like a sweet bear flag on NG 15 min

  • momac

    where are the grains, softs, and oil/ natural gas reports listed ahead of time, was there a release on natural gas today?? I need to write them all down so I’ll know if to expect wild movement

  • Pervergence

    I released some gas earlier 🙂

  • saltwaterdog

    Every Thursday at 1030am EST.

  • BobbyLow

    I’m sitting on some decent profit and am willing to give it a little room. But it would be nice if it made up its mind up sooner rather than later.

  • Dyellowflash

    Anybody knows what’s this pattern? Looks like a strange inverted triangle.

  • Dyellowflash

    I mean ST – it makes sense to short since we cant seems to clear it upward, but if this is a bearish mkt, shouldnt we be making lower high on a descending triangle, instead of doing a strangely triangle that looks bullish – each bounce goes up higher and each touch below becomes lighter?… :O

  • Darkthirty

    expanded flat correction

  • Maumaj
  • Rightside_ot_trade

    /CT sliding down the hourly lower BB
    See what happens with stops at the July low of 83.2

  • Darkthirty

    I know news does’nt matter, but Russia called for an emergency UN security council meeting…and the band played on

  • Darkthirty

    target 14575 DJI, see if they can holdit up till the close

  • SirDagonet

    Perhaps in fairness I should say that I also think Tharp sells a lot of steak with the Kool Aid… I agree that his emphasis on trading plans, psychologically knowing yourself, etc. is exceedingly important.
    As to whether or not his SQN formula, for instance, is reasonable or adequate – I don’t know and don’t have the sys dev skills to evaluate – that was part of my point…

  • Pervergence

    I don’t think the UK will get it through their parliament…..then no consensus on a UN resolution….China and Russia will Veto.
    US and France might go it alone….but Barry might not risk it.

  • Schwerepunkt

    Nah, too late to back down now. He’ll order the strike. The only issue is the timing. If the UK parliament holds us up beyond this weekend, we’ll go forward with the Frogs and the Brits will try to join-in before the fireworks end.

  • Darkthirty

    Barry aint got a clue, other that backing the MB. You’re looking at TEOTWAWKI, if the POTUS doen’t get put in his place

  • Sean

    VIX diverged ~11am (est), looks like we’ll get a catch-down of the SPX before the day is over… Cover those longs…

  • Schwerepunkt

    Hyperbolic.

  • Sean

    As long as we didn’t shoot off some patriots today then BTFD.

  • Pervergence

    We’ll find out what kind of Allies the Soviets are to Syria. Bet they sit on their hands.

  • Darkthirty

    bull pussy

  • momac

    excellent, thanks

  • Schwerepunkt

    Whatever. The only relevance this discussion has to trading is the timing of the impending strike. Draw your own conclusions about any effects the strike will have on the markets.

  • Skynard

    Wow, so many bearish comments. We are still in an up trend, would it not be feasible that the bulls attempt a recovery here? Remember, low volume end of the month….and so on.

  • ridingwaves

    I would take the other side of bet if you included Russia pushing it thru a different way..

  • Sean

    Well, I just bought an SPX call option so I’m pretty sure that killed any chance the bulls had…

  • BobbyLow

    As much as I try to avoid news and after thinking it through, the situation in Syria is an exception where I will probably err on the side of caution when it comes to my Oil position. I’ve been long since last week and according to my rules could be getting close to being stopped out with a decent profit. Ordinarily if I’m stopped out of a Long, I would Flip to being Short. But in this case, if I take profit on my Long, I’ll probably stay neutral.

    I do not want to be held hostage to what politicians might decide or not decide to do. Besides, under the present circumstances, I do not have the balls to be short oil over the weekend. The more there is talk about not throwing missiles at Damascus the more I think that it could happen. OTOH, they could all be sitting around a campfire singing Kum Ba Ya come Monday if not before.

    The last 30 Minutes of “Open Outcry” between 2:00 PM and 2:30 PM might get us off the relatively flat plane that we’ve been on for the last 18 Hours or so.

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

    meh, inside candle on the daily (from the big drop 2 days ago).
    I’m not taking any sides.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p28964907271

  • Schwerepunkt

    Prudent. I think when the missiles fly there will be a brief period of volatility and then oil will sell off.

  • Sean

    It’s always better to wish you were in a trade than out of one…

  • Skynard

    Hum, I am a very short term trader. The comments alone make me bullish:) looking for that re-test, where is that?

  • SS_JJ

    Hey, tone it down a notch.

  • Darkthirty

    could be b of 2 seeing as we only have 1/2 of gap fill, watching her close here! nice rally for 3 dayweekend is normal i believe

  • Dyellowflash

    TP-ed shorts grab from the top of that strange triangle and calling it a day. Exhausted playing with gold for cheap pennies today 🙂

  • Darkthirty

    getting a hinkey long signal, unconfirmed yet. on the bubble……

  • Ronebadger

    I’m just calling today and yesterday a “bear flag” (for now…)

  • Darkthirty

    put the fibs to it and come up with a 618 retrace

  • Pervergence

    NG had quite the reversal….

  • https://evilspeculator.com molecool

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  • Skynard

    Hehehe, short 63