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Wait For Weakness
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Wait For Weakness

by The MoleFebruary 18, 2016

We are seeing continued strength in equities now with buying interest becoming increasingly more assertive. If you are still long from the lows then I suggest you keep a loose trail around 1R – 1.5R away.

2016-02-18_NQ

I currently elected to focus on the NQ as it seems to offer better daily context at this point in time. The daily and weekly panels show us clear skies until about 4271.25 – where we’ve got a weekly NLBL waiting, remaining active until late next month. The upper 25-day BB won’t offer resistance until about 4300.

2016-02-18_spoos

On the spoos we are also good to go until about 1960 which marks daily resistance. The weekly panel shows us converging 25/100 SMAs near 1980. And not shown on this panel is the 25-month SMA which currently is in the process of rolling over near 1970.

A Cunning Plan

Which brings me to a cunning plan I have devised to take full advantage of the current advance in equities:

  1. Do nothing.
  2. Then do even less.
  3. Go back to 1.

That about covers it. You see timing as always is everything, and lacking any new information in the midst of medium term corrections across the board our modus operandi should be one of inactivity. The game here now is to wait for weakness, most optimally occurring near a technical inflection point.

2016-02-18_gold

Gold is technically sitting at the knife’s edge here and I’ve put in a binary campaign which currently has me short but flipping for a long position near 1212. Let’s see how that one goes.

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Update on the ThinkOrSwim Issue

After wasting hours yesterday exchanging a dozen useless emails with TDA support I stayed up until after 2:00am last night, poring over my scripts, to get to the bottom of what’s going on.  Apparently TOS has introduced some strange bug that effectively breaks some scripts – it has to do with at least one of the internal built-in calls they provide. I sent them a very simple test script to demonstrate the problem which they have passed on to their super nerds. TOS apparently have received a large number of complaints from a number of irate script authors and are now working to deploy a fix this weekend. Hopefully this will address the current issue – ya se verá.

In the interim I am tailing the ThinkOrSwim log and am keeping a close eye on the indicator. I certainly hope that the Zero won’t crash again this week but I cannot promise it as application related bugs are outside of my control. I did port the Zero to NinjaTrader7 but would have to add a bit more code to the script like the Mole reversal signals for example. There is a good chance that TOS will see the errors of their ways and either roll back this weekend or deploy a non-buggy version. So my current plan is to not waste more time and wait for that to happen – especially since it’s already Thursday.

FWIW – the Zero has been running without any problems since late 2008 – that’s over 7 years of faithful service. It’s clearly not me who broke the script and I don’t see any glaring bugs either. So I humbly ask all you Zero subs for your patience this week while things get sorted out. I am working hard in collaboration with the TDA ‘support team’ to resolve the issue 😉


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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  • ford8n47

    Zero not working again….no problem…I’m heeding yours and my advice of DOING NOTHING!

  • jmoney3000

    Agreed. After 6 weeks of a lot of intraday trading, today I am also DOING NOTHING

  • Kidd Cudi

    who was that guy who talks about waiting for a good pitch?

  • https://evilspeculator.com Sir Mole III

    Zero crashed again and I just recycled it….

  • ford8n47

    Running now! Thanks!

  • https://evilspeculator.com Sir Mole III

    Really sorry about this guys – I’m doing my best to keep it running.

  • Tomcat

    Being an IT guy myself, one has to accept, sometimes chit will happen. Now in terms of waiting for weakness, are you implying to wait for a short oppt or long?

  • ridingwaves

    Those up time percentages rival OEM contract up time language for some software utilized around the country….we crashed on an integration script error too after a similar 8 year run….That’s some good coding Mr Mole…

  • mugabe
  • tradingmom

    fatpitch / urban camel?

  • ridingwaves

    L TVIX 9.60..chart on the way

  • BKXtoZERO

    I finally posted my rules late yesterday if anyone missed it. It only took me a year of “thinking about it”. There are still holes in it and room for much improvement on the technical entry and exit side but it is a start.

  • OzarkHillBilly

    I’ve never used TOS but always heard good things. I figured it would probably go bad to one degree or another after TDA picked them up. It’s just the nature of the beast. Most of the execs at these brokerages have a lot of trouble figuring out what they should be focusing on. Ironically for online brokerage firms, the public-facing technology and trading platforms often get shafted, even though one would think that that this would be a fundamental priority. From speaking to low and mid level developer/tech folks at TD Ameritrade, Interactive Brokers, Scottrade, etc, I’d say that there’s plenty of frustration across the board with what they are tasked to do, the lack of necessary support, and absence of understanding from upper management.

  • BKXtoZERO

    says they got in “after” 100 point SP rally. Their timing is seldom perfect so that is concern for the bear case.

  • ridingwaves

    but that is big money, so maybe they are tuned in on quick pullback for better shot at higher….SPX is stuck here and can’t get past the 2/4 candle high

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

    Miners, not rolling over.
    stubborn little buggers.
    [GDX]
    http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=6&dy=0&id=p49247235813

  • BKXtoZERO

    Long DWTI (short CL) 237 entry more later

  • OzarkHillBilly

    Even with the market dropping a little here more as I type, the words “shake shake shake” come to mind, and when they do, I can’t help but think about this song. I imagine both bulls and bears coming out to dance, and showing their asses on various blogs and bulletin boards.

    https://www.youtube.com/watch?v=xWxLc555sgU

  • BKXtoZERO

    So Crude chart I posted yesterday showed we are bumping up against down trend line, today, posting 3X reverese chart w/ horz support at 220 zone. Saw it start taking off and just caught the tail of a pullback candle at 237. Target 290-300, INTRA DAY only, going against me core belief system here like that DUST trade. Keeping it tight. Stop is 230.

  • Time Bandit

    I think most of the problems come from an attempt to dumb the platforms down. I mean do we really need crap like Heat Indexes? This kind of stuff is for mass marketing and makes it sound like all you have to do is push some magic buttons and the money will come rolling in. TOS also pushes the shit out of Options because that’s probably where the money is for them. But what they wont say is that most new traders will get their clock cleaned trading options. But it is a business and it’s their job is to maximize their revenue no matter how stupid some of the stuff looks like.

    I started out with Ameritrade in 1998 and made TOS my Primary Platform a few years ago. Because the TOS platform can do so many things it was difficult to learn and it took me quite awhile to get familiar with it. But here we go. Simple and easy to learn = Basic stuff. More difficult to learn = more complex stuff. I’ve never attempted to write my own code and probably never will because that’s one learning curve I can do without so I’ve never had to contact their IT department.

    On the few occasions that I’ve had to contact them about other issues, everything was resolved quickly and without any hassle.

  • ridingwaves

    pullback to 1890 might be better for bulls here to go higher…..

  • https://evilspeculator.com Sir Mole III

    TOS was awesome when Tom Sosnoff was still running the show. Once TDA took over I knew it was a race to the bottom – it’s been a ton of features since but most of them are completely useless. I guess they cater to their particular retail audience which focuses on exotic features, a ton of indicators, and attempting to find an edge via functionality inspired by professional platforms. The problem is that they have squeezed way too much stuff into a Java app which makes it run slow. I rarely run it as it takes up half of my CPU every time. So adding more and more stuff defeats the purpose as I won’t cut the lifetime of my system in half by maxing out its CPU all day.

    The biggest problem however is internal – in short their QA team sucks and every once in a while they release a turd of a version that breaks everything. That is probably driven by an aggressive marketing team that keeps those devs jumping through hoops having to accommodate one exotic feature after the other. It’s a typical example of innovation for innovation’s sake – I don’t think there is a need to constantly release new versions but they are trying to attract the type of trader who thinks that new features means more profitable trading. Meanwhile their spreads are shit and their data feed is stable but delayed and is missing a lot of context. Don’t even bother putting up a tick chart – you’re missing about 80% of the data out there.

    I could go on but this gives you an idea.

  • Darkthirty

    Great time to practice scalping. 10 ES points on front month options gives you 2X profit if your system works. Loss is limited to investment. You figure out the “R” …………..

  • CandleStickEmUpper

    Long NQ 4168 on this pullback

  • BKXtoZERO

    entry 237, raised stop to 245, switch to trailing if it keeps going. “I sell women’s shoes, yet I hate to come home?”

  • Darkthirty

    Been cultivating that foot fetish?

  • BKXtoZERO

    Out DWTI 254, Gain 2.4R, 7%

  • ridingwaves

    good trade, oil is close to having its moment, keeping some dry powder for it to come…next month likely

  • BKXtoZERO

    I had my daughter all over me on that one asking me for paint and paper. Trailing stop I dropped on it of 1$ way too close. Hard to concentrate. Off to the shoe store now.

  • tradingmom

    zero crashed again

  • Yoda

    all are very bullish! 🙂

  • CandleStickEmUpper

    ah yes, I didnt notice the time. It hasnt updated since 11:50 am

  • OzarkHillBilly

    Or could easily just blast on up to 1947ish from here. The action is a little different today, but it still looks at least partially as if the basic plot is still in play this week: Run it up, camp out, fizzle out the short term overbought indicators, rinse, repeat. Other arguments could be made, of course, and so I’ll just keep waiting.

  • https://evilspeculator.com Sir Mole III

    I’m on it!!!

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

    Having said all that, if we meander along around these levels into the close, I might take a small short position overnight. Or I might not.

  • Time Bandit

    That was a good movie. I couldn’t imagine serving in current day Submarine but especially one made in 1940.

  • https://evilspeculator.com Sir Mole III

    Seriously….

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

    I watched K-19 several years ago. Unsung heros & radiation soup {shudder}

    https://en.wikipedia.org/wiki/K-19:_The_Widowmaker

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

    The 80 envelope has worked well for me the past year.
    overhead resist, similar to September.
    Lion in the grass, no edge for today.

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p19131117373
    -GG

  • Yoda

    cool! just bought the 2″ one on Amazon to stick it on top of my desktop. 😛

  • BKXtoZERO

    Off to the Indian Buffet… I earned myself a good number of trips there today. My wife cooks only slightly more than Peg, so if I want to eat, I have to keep the Rs coming. Enjoy the close!

  • CandleStickEmUpper

    Rs = Rupees for indian food 😉

  • Kato33

    Been under the weather all week so very little trading. My trails on long GC, SI, and ZB were all hit early in the week for 13R, 6R, and 5R respectively. Very successful campaigns for me. My only trade this week was a discretionary long on GC at 1208. Discretionary because I didn’t wait for the triangle to resolve before committing. It was a spec on the intermediate up trend re-asserting itself. Not something I want to get in the habit of. Staying on the sidelines in equities for now.

  • ridingwaves

    big SPY seller being soaked up by some buy algo…seems like a win for bulls today

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

    I live outside of Chicago. The museum of science and industry has a German WWII U boat that the US captured, sailed up the east coast, through the St Lawrence and the Great Lakes, and ported across Lake Shore Drive into the museum. Its awesome. I can barely walk thru without having a severe claustrophobia attack.

  • ford8n47

    Perfect IHS on the Zero! Not touching it!

  • tradingmom

    just thinking the same thing!

    SPX is trapped below a significant downtrend line right now. You can draw a line from the bottom at 2019 and 1993 and the tops at 1947 and 1931. This line may come from the July 2015 top around 2132.

  • Time Bandit

    I know what you mean about the feeling of claustrophobia. I felt the same way when I went on a tour inside a Sub at Patriots Point in Charleston, SC a few years ago. I used to work with a guy who served on an American Sub during WW2 and he said he actually liked it.

  • http://greenlander1.blogspot.com/ Greenlander

    Looks like consolidation so far

  • http://greenlander1.blogspot.com/ Greenlander

    VIX is down also despite equities being down. No fear in today’s move. Very orderly sell off.

  • tradingmom

    Hourly ES — Bear wedgep

  • OzarkHillBilly

    I picked up a couple of handfuls of short options on that bounce about 45 minutes ago. Selling most if not all of them before the close largely because of this lack of $VIX movement.

  • Grant

    My uncle was in a sub in ww2 in the Pacific. Those things were tiny.

  • Time Bandit

    They sure were. Besides the claustrophobia, I can imagine the smell might get a little ripe as well.

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

    game over man, game over

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

    it’s tight. Tour in Pearl Harbor.

    https://www.youtube.com/watch?v=jrCFQBQPnv0

  • Time Bandit

    Might be consolidation. The Closing price on the NDX came pretty close to my stop which is pretty tight for me but didn’t hit so we’ll see what tommorow brings. My other positions are reasonably safe for right now. . .

  • CandleStickEmUpper

    Still long here. Couldve taken scalp profits when we hit 4187 but overall trend is up so I held.

  • http://greenlander1.blogspot.com/ Greenlander

    Looks like consolidation to me. On larger time frame we are overbought as hell but took some SPY long and see what happens tomorrow. My hourly sell signal triggered today but in strong trends this signal means shit most of the time.

  • Time Bandit

    Hey Newbie,

    FYI, I went Short EUR/USD this afternoon. I’m a little late but not too bad. Thanks for the heads up. I think. 🙂

  • http://greenlander1.blogspot.com/ Greenlander

    That looks like a decent setup

  • Billabong

    Very nice … congrats. Sounds like solid campaign mgt pulling down Rs like that. A few of those help build confidence in your system.

  • Billabong

    LOL….

  • BKXtoZERO

    I was thinking about your stories of taking care of a baby while trading. Today my wife was sick and turned my 3 year old daughter loose on me. “I want cereal”, I want paper, I want paint, I want more cereal” I have to go poop poop….. Let’s see Van Tharp trade with a kid hanging on him huh?

  • http://greenlander1.blogspot.com/ Greenlander

    Yeh I got a nearly 2 yr old son and have memories of him trying to unplug the computer while I was trying to send in orders.

  • http://greenlander1.blogspot.com/ Greenlander

    I’m long and willing to ride some turbulence here but pain trade seems to be up.

  • BKXtoZERO

    Hey RW… so what is your take on “it’s moment”? break out or 20?
    I’ve been keeping it tight so far and taking what is free for the taking.

  • BKXtoZERO

    funnymentals say 20 is coming, storage almost full and demand declining but I’ll let the price decide here soon.

  • http://greenlander1.blogspot.com/ Greenlander

    Dunno maybe the pain trade is up. Technicals aside, guessing a lot of patient people wanting to go long are waiting for a decent pullback to go long and this overextended move near resistance is a ‘logical’ place to short. Continuing to move up would mess with both camps. Who knows maybe this time the majority gets what they want and we do have a heavy retrace.

  • Kato33

    Thanks Billabong. Though the urge to re-enter after those stops were hit was hard to resist. Big Rs have often lead to overconfidence and over trading. The board here really helps control that urge

  • Kishore Kumar

    I saw the video that was posted and then deleted. It was quite hillarious, a great comedy on themselves, produced by Indians. I don’t know why it was deleted? Personally, I could not care less for Indian food, except for the cooked vegetables. Most of the rest is rich in carbs; bread, lentils etc.. The desserts are all sugar. Maybe, meat-eaters, unlike me, like the curried and roasted preparations, with all the spices.

    The “fight” at the end of the video was for paying the bill, as it is considered to be an honor to pay the whole bill, unlike many westerners who normally, even after eating as part of group, pay just for their own food i.e. “going dutch”.

    Social customs are different in different parts of the world but, basically, we are all good and the same for the most part.

  • Kishore Kumar

    Except that on the daily chart, the down move can be considered as a retracement of the impulsive move up. So, there is a greater probability of continuation of the up move, especially for anything more than a quick scalp using a lower time frame.

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

    Been there, done that. Try option trades at Market open, in…..(wait for it)….Spring 2009.

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

    possibly offensive, second thoughts after nobody commented or liked it.
    so self pulled it.
    🙂
    I work with several Asian indians and pakistanii’s. good friends, but nobody would know that.

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

    /GC – a follow up from Valentines.

    Looks like buying momentum broke through previous ceiling levels of RSI on the hourly, and is temporarily trapped. just a theory.

    it’s not often I get to watch a parabolic like this, and watch the after-effect.

  • BKXtoZERO

    sorry I missed it. I am gluten free and Indian food (besides Naan bread) is gluten free with a large variety of things to choose from. My wife’s cooking, besides being infrequent, is also about as good as Peg’s.

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

    just search for Indian Restaurants are SAVAGE on youtube.
    😉

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

    one more chart, and off to bed, I’m exhausted.

    Spoos, weekly pivot points working good this week.
    I drew these Sunday night, I kid you not. Numbers overlay-ed on the chart.

    -GG

  • http://greenlander1.blogspot.com/ Greenlander

    Oops actually I read that wrong, I actually like the long based on the hourly. But I don’t trade forex that much tho so not exactly in tune with it.

  • CandleStickEmUpper

    Atilla tweeted that in a bear market, sentiment is not enough for a reversal. Time to go long.

  • kim
  • Darkthirty

    I’d like to see the nanex chart on that one

  • Darkthirty

    Who is atilla?

  • BKXtoZERO

    well, there is my 280-290 on DWTI reverse CL. I am trying to risk less overnight and I got what I could intraday yesterday.

  • https://evilspeculator.com Sir Mole III

    Zero – I’m on the case!!!

  • ford8n47

    zero is down again…..no biggy.

  • ford8n47

    RUNNING NOW! THANKS!

  • https://evilspeculator.com Sir Mole III
  • Time Bandit

    Len’s can be different for everyone Kishore and obviously see different things. Talking about things like “Impulsive” moves has an EW sound to it and to each their own. I only had time for a 3 Year back test yesterday under my Lens and it is indeed a Short by my view until such time that it becomes a Long. There is no guarantee that my short will work. As far as probabilities go, once again this is a case of probabilities based on what is being weighed on each individual’s chart.

  • Kishore Kumar

    Sorry about use of the word “impulsive”, but it was indeed a breakout out of a trading range and the retracement so far is right up to the top of the previous trading range. Not saying that it can’t go lower and reenter the trading range. But I just wanted to express what I see.

    Nevertheless, following your backtested rule set is the way to go!

  • Time Bandit

    I understand and appreciate your view Kishore. 🙂

  • CandleStickEmUpper

    He supposedly made a fortune trading ES in 2008, started his own fund, and has been calling market turns since then. His calls have been wrong for the last 7 years. He rarely tweets, but when he does he’s still wrong. Prior tweet was him going long ES at 20-something end of December.

    So, whenever he tweets now, I like to sarcastically suggest the opposite. Usually works! lol