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Trap Nation
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Trap Nation

by The MoleMay 9, 2018

I’m a bit under the gun with various deliverables today, so this is going to be a quick update. Nothing really new to be said anyway regarding the overall market and the current tug-o-war between the bulls and bears. As you know I was still positioned long but then got stopped out during a quick stab lower. The ensuing run higher once again confirmed to me that this market is determined to trap as many participants as possible. My kind of tape!!

So a decision had to be made. Call it quits or re-enter after a pronounced spike low? After consulting the Zero indicator (you are a sub aren’t you?) I didn’t see anything truly bearish on the participation front.

So I decided to jump back in near 2679 with my ISL a bit below my previous trail – it now sits < ES 2652. Right now things are looking bullish again but we all know this can change quickly given almost random daily reversals.

Bull Versus Bear

Some of you guys have pointed out that I have been almost annoyingly bullish over the past few weeks, continuously stepping in to buy the dips. Well, for one I have been getting away with it, and probably couldn’t have done better shorting the rips.

On the other hand I have yet to see compelling bearish evidence on the price end. I’m not talking about momo, breadth, or volatility measures. All I’m talking about is price and the long spike lows on the daily chart still show significant buying pressure which materializes mostly when it counts the most, i.e. > 2650 and more recently 2600.

Call me old fashioned but until I see significant long term support clusters taken to the woodshed I’m not exactly prepared to back up the truck on short positions. A lot of bearish moment has been wasted in the past month on sideways churn.

Now that said, right now – below the 100-day SMA to be more specific – would be a great time to really stick it to the bulls. So I’ll be monitoring the Zero for the remainder of the week and if I see signs of distribution again then I’ll be first to pull the trigger on some short exposure. Until that I happens I remain long.


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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  • ridingwaves

    Wth- First comment from a early morning surf dude? what is going here…I see the oil barons took me out-sneaky little roughnecks…10 yr auction at 1PM EST, tomm. 30 yr same time….
    With JP Morgan CEO saying 4% on 10 yr is coming yesterday, I would think they are playing it hard..

  • maxcherry

    spx by sectors, the two leading the spx since jan1st XLV (amzn) and XLK (aapl) with little help from XLE, i don’t think they can continue holding the spx up.

    https://uploads.disquscdn.com/images/19de9ef2d002da9873ef89c18f7f2425d7e7df2faaa42f88cbe4c5a44ba1066a.png

  • ridingwaves

    Apple with Buffett disclosure is going to be hard to push down now…
    Amazon continues to impress the financial folks, so another tough one to short or project to head down…..bifurcated market for sure

  • Mark Shinnick

    Well… the vol crush thesis seems to be holding.

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

    aaaaand that’s why you only sell 50% when you think it’s a top.
    😉

    [XLE]
    http://stockcharts.com/h-sc/ui?s=XLE&p=D&yr=1&mn=0&dy=0&id=p31333985422

  • StockTalker

    Shorted crude oil @ 71.25

  • BobbyLow

    “Some of you guys have pointed out that I have been almost annoyingly bullish over the past few weeks, continuously stepping in to buy the dips. Well, for one I have been getting away with it, and probably couldn’t have done better shorting the rips.”

    Totally agree with this statement. For me it boils down to why the hell would anyone want to short a strong market. I’m not talking about people who are excellent at playing both sides intra-day because that’s a different skillset altogether. But for swing traders that think the market can’t go any higher or lower that’s another story. A lot of Jesse Livermore quotes have withstood the task of time and this is one of my favorites. “. . . A stock is never too high to buy and never too low to short.”

    There are some that can trade “various perceived” support and weakness levels but I suck at it. Out of an attempt to survive, I found it much easier for me to go with the flow and not pee against the wind. 🙂

    Still Long Crude, Long Gold (albeit a bit shaky) , and I’m still holding a spread on Wheat while waiting to see if it’s ready to rollover for awhile.

  • maxcherry

    if someone buys aapl here it’s probably buffett that’s selling it to them

  • StockTalker

    /YM back tested the 38.2 again of the entire move down. Today should give clues to where the tape will be heading. If crude oil can not hold these gains she will go down hard.

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

    where were you Yesterday? lost in the swamp, we thought.

  • StockTalker

    10 yr bouncing off the 3% mark, hang on here we go.

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

    GG, Energy all out.
    including the hedge.
    too much drama, too much talk, too much volatility in that sector.

    Can’t complain. Next Thousand trades.

  • HD
  • Yoda
  • BKXtoZERO

    short crude via DWT 7.43

  • HD

    Mole, nice blog again. Nothing bullish or bearish about being a buyer or seller-just trading and you’re entries as a buyer have been sweet. The exits… not so much.

  • Mark Shinnick

    Glad you have an eye for that stuff. Always interesting.

  • nirav777

    Zero pane w/ slight stealth pos divergence.. “long frame buyers, vs short term sellers, YET on the low participation fell off for smaller frame” and back inside IBl trapp the sellers of the breakdown

    .. https://uploads.disquscdn.com/images/165e94b000e2566266d8c8e26fcb9ee2fad0279baaeb7548980f243160644391.png

  • BobbyLow

    Nice trade on XLE!

    I’ve been putting ear plugs in to block out the talk and blinders on to block out the drama so I can only watch prices. It helps. 🙂

  • nirav777

    long the 73 zone

  • Mark Shinnick
  • HD

    Thx Mark. try to gap it over R, goes nowhere for an hour and sellers move in. I’m gonna give the pattern this week to resolve. It’s losing appeal by the hour.

  • BKXtoZERO

    Out of half of that 1R TVIX from 6.66 at 6.4

  • StockTalker

    Have decided to add to my arsenal of shorts, -2 /NQ w/ stop @ 6870.

  • Julie 35 – 25 – 36
  • BKXtoZERO

    I see declining RSI on CL for 20 day chart, 10day, 5 day and 1 minute. It;s Dead Jim. “Get on me Bert… I Can’t Lose”

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

    thank you sir. If I didn’t have the hedge, it would have been sweeter.

  • Julie 35 – 25 – 36
  • ridingwaves

    dead is dead but it ain’t dead yet…..See Mole bullish and bear musing above, Aka Scotty for reference

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

    ok, if that isn’t an impulse move, I don’t know what is..

  • BKXtoZERO

    I was being facetious, as usual. It’s a shot is all….

  • BobbyLow

    Sometimes a hedge can keep us in a trade when it might otherwise be psychologically difficult to do so. In these cases, I think it’s worth it and just a cost of doing business.

  • Julie 35 – 25 – 36

    GG C can equal 1.618 A which is 31.44 right where price is presently A = C @ 29.82
    JULIE

  • Julie 35 – 25 – 36

    My Bad price approx. 30.44 as I type
    JULIE

  • https://evilspeculator.com Sir Mole III

    Difficult to get it perfect but I take half a compliment 😉

  • BKXtoZERO

    Driving season is coming up. A quick look at CL 10 year chart shows some kind of cycle lows in July, (9 years out of 10). 2014 was a miss. Many some start as early as May, mostly June. That is the powers that be giving us a break to go on vacations and spend money.

  • https://evilspeculator.com Sir Mole III

    Been slow lately. This tape is not helping matters of course.

  • Ronebadger
  • HD

    So IMO about exit strategy: all of these trends have a relationship in price and time. Whether you want to call that EW or not doesn’t matter. BOTs, HFT’s, quants etc all use the math. Whether it’s a 3 day hit or a 34 point rally they all have characteristics in common. No stops on the ES go untouched. You have to take the trade off or they will find that stop. Mechanical traders have issue with that as the system should take them out but that’s where progress can be made IMO. Nothing wrong w taking profits and reloading.

  • HD

    Agree, should we give it 10 points?

  • BKXtoZERO

    Mole lot’s of compliments your way from me. I was just checking for any hint of bias. Maybe I missed your short entries as I am not a sub.

  • BobbyLow

    Excellent topic. I believe Exits and Trade Management are a hell of alot more important than Entries. I also think there’s a difference on what time frame is being traded. If someone is day trading futures on a 5 minute chart than I think profits need to be taken rather quickly because prices move so fast, profits can be gone in a heartbeat.

    OTOH, with swing trades, there are many different ways to exit. For me it’s either an ATR Trailing Stop or a noticeable break in trend. For swing trades, the worst type of exit for me is discretionary because emotion can be involved which can lead to a premature exit or an exit that has eaten up too much paper profit. IMO, Exits are the most difficult thing about trading and getting it just right should fit the personality and risk tolerance of the individual trader.

  • HD

    SPX 2595+(89), 26(55) +(34). For example

  • Mark Shinnick

    Ok, so here we are at the February vol support.

  • nirav777

    scaled 1/2 87; but the divergence has lead the way..

  • Dyellowflash

    Interesting interpretation. I was also long at 24328 during one of the dip. Looks like u r a better reader of the zero than me. How long have u been using it? https://uploads.disquscdn.com/images/511342cf9223b1db0432f6c8d938f78100ca2710dc088eae73324cafd2b6c2de.gif

  • Mark Shinnick

    Well, I’m long. since earlier under the vol crush thesis.

  • Trouzzer_Snake

    I’m putting a 10 handle trail on my ES long at 2695. That’s a couple pts below the weekly 20 EMA…

  • nirav777

    I’ve been looking at it for a a month, but have found keys ways to use it- im actually better at spotting divergences across delta Zero is just another tool set, but a great one.

  • BobbyLow

    Excellent trade and trade management!

  • Trouzzer_Snake

    Fixed my typo – 2655 is one hell of a trail!

  • Trouzzer_Snake

    Thanks!

  • Julie 35 – 25 – 36

    $BKX and $SOX are in sync which is bullish. SPX 2702 target then approx. a 50% pullback then another run up
    JULIE

  • nirav777

    closed other 1/2 94.25, +21.25// NEXT

  • Ronebadger

    there’s your 10+ pts…2696 high for day

  • Julie 35 – 25 – 36

    $RUT Now looks like it has completed it’s E leg of triangle (May low) Outperforming $SPX since beginning of March. Bullish and nod to the Bulls Overbought so expecting a pullback perhaps coinciding with a pullback $SPX JULIE https://uploads.disquscdn.com/images/245a416fe0901c8203a6d9ea4ba878570b69e14ec612f7bdce0a6970b3053bdd.png

  • nirav777

    Some small neg div delta vs zero; trying small rotation short here 93-92 zone; tight risk control

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

    $RUT,
    I really should just break down and join ‘the small cap Side’.

    http://stockcharts.com/h-sc/ui?s=%24RUT&p=D&yr=1&mn=1&dy=0&id=p30335026147

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

    Reminder: ES 2700-2710 is the next volume hole

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

    This is huge, a custodial solution would open the floodgates to Wall Street investment.

    https://cointelegraph.com/news/nyses-plans-for-physical-delivery-of-bitcoin-pave-way-for-major-crypto-adoption-analysts-say

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

    Ian!
    still HODL’ing brother? I do not know how you do it.
    😉

  • Julie 35 – 25 – 36

    Hi Yoda GG and I … Well …… Your absence … Expecting another red head ….. What a surprise ! SPX my target 2702.78
    JULIE

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

    Custodial, Hmmm where have I heard this before?

    oh yeah, the GLD prospectus.
    https://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus2012.pdf

  • BKXtoZERO

    looks like the bulls have it. My fun is over….. need to find something else to do now. Buy silver or something. I had been keeping it tighter and smaller positions expecting this today. I still don’t rule out the bears entirely, but they are just about dead for a while much above 2700.

  • Julie 35 – 25 – 36

    Yup BKX … 2717
    JULIE

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

    I think you’ve graduated.
    from wild gambler, to cautious speculator.

    https://www.youtube.com/watch?v=Kw-_Ew5bVxs

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

    If you get the itch BK,
    psssst.
    VIX 10.99
    (wink wink)
    http://stockcharts.com/h-sc/ui?s=%24VIX&p=D&yr=0&mn=4&dy=0&id=p60176032823

  • Julie 35 – 25 – 36

    BKX I expect a pullback my target 2702.78 then a pullback to enter long Pullback 2656 – 2647
    JULIE

  • http://www.captainboom.com/ captainboom

    “…or an exit that has eaten up too much paper profit.”

    That has happened to me waaaaaay too many times.

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

    out to lunch.

  • Julie 35 – 25 – 36

    BAC Daily PMO has turned up — 5 ema has now crossed above 21 ema — Next need MACD to cross above it’s centerline (very close)
    JULIE

  • Julie 35 – 25 – 36

    BAC OBV confirming with a higher low relative to price closings JULIE https://uploads.disquscdn.com/images/101051e3918f7d461791bf788ee08fb9c67256b22b045bc0a9508e3af1eaccca.png

  • BKXtoZERO

    Thanks Gerb.

  • Julie 35 – 25 – 36

    BAC Going to wait for a pullback for a possible long RSI and MACD positive divergences V bottom reversal perhaps too far too fast https://uploads.disquscdn.com/images/720328c076646066a0ebb134a1b47322131d72f05f6996d1d7a0209fdc58e870.png JULIE

  • HD

    That’s a great number Julie.

  • Julie 35 – 25 – 36

    HD SPX This bounce from May 3rd still could be the D leg of the triangle. Often the D leg is the most complicated . Checkout a comparison with the B leg
    JULIE

  • Yoda

    Ha!

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

    *this* was the picture in my mind this morning, looks like it came true.

    EDIT: Aaaaaand long signal
    [BPSPX]
    http://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&yr=0&mn=6&dy=0&id=p02855803153

  • HD

    agree but a close above 2683 would have me looking for tech signals that a low is in. Been a good few months.

  • BKXtoZERO

    so they are not going to zero I guess……..

  • Julie 35 – 25 – 36

    Guys you may find this interesting $XII is a descending triangle with D leg 61.8% of B leg. In a reply to HD below I stated $SPX it still could be carving out the D leg of the triangle JULIE https://uploads.disquscdn.com/images/10dfb5580eecf4fb64cd286cc36e0118777b2d1d4ee8a8d9ad517329fea67e8d.png

  • BKXtoZERO

    Gerb, I may actually go long on a pullback. TQQQ or URTY or some such, for smaller sized swings. I would rather try intraday scalps on dips but I don’t expect much reward ratio out of those.

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

    the triangle is soooo, last week.

    that (EW) triangle has actually been support!
    Check out the Equal Weighted.
    https://uploads.disquscdn.com/images/c754239a836cd7807cdd3a5f4dd3c684fcc4cd3aac33bdd4337415218a766801.png

  • Yoda

    The long DX campaign is in need of a ST break

  • Yoda

    L strength and S weakness

  • Julie 35 – 25 – 36

    GG I see it … Thanks !
    JULIE

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

    it’s a mixed bagged.
    you see something, I see something, confirmation biases..

  • HD

    The 0-B TL is there but only rule for D is not higher than B 2801.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Julie 35 – 25 – 36

    GG Triangles are the most difficult of all patterns to trade. Best to trade them on the 60 min oversold – overbought – resistance – support – trend lines. That is if you choose to trade them. Many traders take a break with a developing triangle
    JULIE

  • Julie 35 – 25 – 36

    HD Another question I have confirming a D leg is the a triangle should go 75% to it’s apex which it has not done. Oscar’s Triangle Rule. A breakout or breakdown before 75% can result in a false breakout or breakdown
    JULIE

  • Ronebadger

    Working on a VIX Sell Signal, Step 1 (still have some time to go, though)
    See the BBs tightening as well https://uploads.disquscdn.com/images/cdbefe710a8cc5cdd164ace27667b7e6fd2bea58e55550b3172a6d3b6e83f6d0.png

  • Julie 35 – 25 – 36

    An E leg would be 75%
    JULIE

  • BKXtoZERO

    You nailed the last one!

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

    sounds like me, inside a triangle, ‘anything goes’. not for me.
    I’m a trender, cannot deny, I like big trends.

    https://i.pinimg.com/236x/b7/a5/ff/b7a5ff972511607ba23dc3ed543fd8a5–shrek-donkey-donkeys.jpg

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

    time check.

  • https://evilspeculator.com Sir Mole III
  • BKXtoZERO

    I am still holding a small 1/2 position of TVIX from 6.66, no real damage can come from that though…. still not liking it.

  • Julie 35 – 25 – 36

    I am Chief small position USO short Daily RSI @ 70 top of upper trend line negative divergence MACD — Weekly chart negative divergences and overbought along with daily chart JULIE https://uploads.disquscdn.com/images/28e74378be072bbfbcc13c3a4e9f27f83a09a3db77828ef86f59e7f76b04956b.png

  • HD

    I don’t know Oscar but you don’t have an apex yet if you don’t have your B-D TL. Did I mention I hate triangles 🙂

  • Julie 35 – 25 – 36

    HD I dislike triangles too
    JULIE

  • HD

    I’m embarrassed to say after a S stop out I managed a few points long. It felt dirty.

  • Julie 35 – 25 – 36

    Chief Yoda was with a green haired super fox ! He is back now ! LOL !
    JULIE

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

    I knew (or at least had a hunch) last night.

    Long live VWAP!

  • Mark Shinnick

    Soooo iffy there because strict support broke in last tics.

  • Ronebadger

    Looks like we got Step 1…. let see what Thur/Fri have in store for us

  • https://evilspeculator.com Sir Mole III

    Was talking about equities. Everyone has been so bearish here lately…

  • BKXtoZERO

    It has treated me well this year Sir! still holding that crude short entered today. Smaller position wider stop on this one. https://uploads.disquscdn.com/images/a9f4e57a0f4eccdaffda52d2e4c2e275cd7b3d7c009abe389cfc3363faea1648.jpg

  • Yoda

    not me

  • BKXtoZERO

    I saw the same channel and we are not at the top of it. The other line from the high doesn’t mean much imho.

  • HD

    outstanding! That is better than 99% of market participants and better than 100% of managed futures “pros” – Kudos!

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

    If you could compound that every 6 months (it’s May, take off June), for 5 years?,
    38X return.
    😉
    clearly an outlier, and unsustainable

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

    Peak Ford
    “Ford will halt all production of its popular F-Series pickup”

  • https://evilspeculator.com Sir Mole III

    WHAT?? Why would they do that?

  • BKXtoZERO

    keeping it too. Lots of 0.15 0.20 stops that make you feel dumb, but the intra-day shots are friggin’ cool when they hit. I only held over night 4-5 times this year.

  • Julie 35 – 25 – 36

    XBD I showed this chart previously. Today a bullish close above a downtrend line. Notice the oversold bounces off the daily 89 ema and Ichi Cloud lower boundary( not shown) JULIE https://uploads.disquscdn.com/images/1c2ea5520655d39406a967c158201df6ea25e4d69f143e2375ee969e832f55ed.png

  • HD

    Today’s market recap video

    https://youtu.be/ymWag6DkJ8o

  • BKXtoZERO

    holy smokes…..

  • BKXtoZERO

    Gerb, I am going to get over account level resistance this time. In 2015 I was up 400% but that was indeed super dumb, super aggressive stuff…. building positions, holding overnight. I held, took a bath….. After that stupidity, with hard work, scalping intra-day and following my rules sheet, only swinging overnight or days when up on a position (reversal) etc, If they are going to beat me now, they have to do it to my face intra-day not with overnight pu$$y gaps. There were a lot of nice fade moves that fell off the plate with nice intra-day entries this year. https://uploads.disquscdn.com/images/bb35a1a5ee988157bbbe97bafb2c41283e1819b10374603bcf113299960ff6b7.jpg

  • Mark Shinnick

    “It takes 76 days for an F-150 to sell, so the company does have a bit of a cushion,” said Ivan Drury, Edmunds senior manager of industry analysis. “But when you have a vehicle that comprises a quarter of your company’s sales, any production disruption is going to cause some consternation.”

  • Julie 35 – 25 – 36

    M Down to 55 ema and lower channel Must have a bullish close above it’s 5 ema 30.37 and strong resistance 30.39 Oversold JULIE https://uploads.disquscdn.com/images/50e961835e754749459ef97d5172e5658f54554004956d49f21baff52e662226.png

  • BKXtoZERO

    Looking at 10 year CL chart it is not any kind of compelling short. It also goes against one of my core beliefs. I believe in gold, silver, oil. Stocks not so much. My position is small but I am not going to let this go against me very far. 62%retrace of last move down is 76$ I loved trading oil back when it was 30-40$ range and did well but it has been a while and I don’t feel a good fit/connection like I do with VIX. https://uploads.disquscdn.com/images/b329b035cc4ac1678f09d7de8cdde70898c9856e69b0c933e47f0f047dc44fd1.jpg

  • Julie 35 – 25 – 36

    BKX A lot of sharks in the oil trade. I keep my positions very small
    JULIE

  • Julie 35 – 25 – 36

    BKX $GOLD down to it’s (1) 233 ema (2) support (3) 50% retracement Oversold There could be one more push down to it’s 61.8% retracement JULIE https://uploads.disquscdn.com/images/7bea8528c0d9d4d803ee79aa2ea725ec4d81566858dfea11c65b0ea8166e7181.png

  • Julie 35 – 25 – 36

    BKX Since the greenback’s climb from mid April $GOLD has held it’s own i.e. consolidation. A large consolidation since mid January presaging a large breakout or breakdown when it occurs
    JULIE

  • Julie 35 – 25 – 36

    BKX $GOLD Weekly chart down to it’s (1) 55 ema (20 Major support (3) Uptrend line Oversold as is the daily chart Overall weekly pattern a bullish ascending triangle Might be worth a play the miners JULIE https://uploads.disquscdn.com/images/da0bb1dff02a9c25bee357b5a0a941e624f504e711dfbc449b4c654b2db0c1b0.png

  • Julie 35 – 25 – 36

    GDX WOW ! The exp moving averages are in a bullish alignment and rising. Strong support 22.51. A breakout above 22.80 and resistances 23.10 — 23.40 JULIE https://uploads.disquscdn.com/images/e735f0b688e1216d3dcba58726b1af361cb1f4be05e972af787d28d10e42c051.png

  • Ian Naugler

    Always!