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Wednesday Morning Briefing
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Wednesday Morning Briefing

by The MoleJanuary 28, 2015

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.

2015-01-28_spoos_briefing

I’m grabbing a short if the spoos touch 2040 and change – stop above 2045. Low odds of a slide but big payoff. On stop out I’d flip for a long with a stop below 2040. A direction will most likely present itself here before the week is over, this thing is coiled up to the max and ready to jump.

2015-01-28_GBPUSD_briefing

Cable – long with a stop below the 25-hour SMA. Only 1/2R as it’s early in this push and one must be ready for a little shake out. Could have legs though.

2015-01-28_crude_briefing

Definitely experimental long on crude – I should have my head checked but this ST formation does look pretty good to me. 1/2R only here – entered right here with a stop below 45.

A few more ST setups below the fold:

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2015-01-28_events

Plenty of event risk later this afternoon but we should be okay for the next five and a half hours.

Happy hunting!


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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  • HJS

    Got to be more nimble in bearish conditions… I am thinking that I should get out of all potions daily. Reevaluate each night in cash because the “fuckery” is over the top on declines. Seems they even engineer the bullshit earnings reports to whipsaw.

  • https://evilspeculator.com molecool

    “Seems they even engineer the bullshit earnings reports to whipsaw.”

    I think your sub conscious is giving you the proper information – being nimble and not resorting to over trading. But don’t fall prey to looking for culprits and becoming cynical. See it for what it is and deal with it – volatility being exploited. All is fair in love and war. It’s important you keep your emotional equilibrium.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Bob the Horse

    There is no ‘they’. There is only the net result of lots of independent actions.
    Tops are incredibly hard to trade. They frustrate and exhaust precisely because bears are inherently weak hands. After a multi-year bear market, people run tight stops on shorts, hence increase the chances of getting stopped out. Timing the top is more luck than judgement.
    It is still easier to buy a dip than sell a rally in my opinion for equities. I would be pretty bearish on where the stock market be be in mid-2016 but between now and then, I would rate the odds of a market collaspe as very low indeed.
    Even if we take a dip, the Fed will pull back on the rate increase, the dollar will ease. There will be a growth boost from lower oil, etc.
    Bull markets end with a whimper, bear markets end with a bang. If we are close to the highs there will be loads of opportunity to make money on the short side, why waste energy and money trying to predict it? The job of a trader is to travel with the crowd, not against it.

  • https://evilspeculator.com molecool

    Exactamente. But I think you meant ‘multi year bull market’, right?

  • Skynard

    /CL getting a retest, will attemp another long. buy @ 44.30

  • Skynard

    /NG been driving me bonkers, still long.

  • MK Ultra

    I still think it will break the 44.20 spike low………IMHO

  • MK Ultra

    LOL…………..it has a tendency to do that……….

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

    2 days ago I was looking for CVX to squeeze higher. didn’t happen.
    Yesterday was literally on-the-fence nobody knows.
    50% retrace, 50% T-time, (is my rule) pulled my long position.

    Got lucky. Looks like a possible pennant in the forming.
    http://s16.postimg.org/6p7pmr0s5/cvx_gerb.png

    -GG

  • Skynard

    Yes, agree. Want on the train again:)

  • Skynard

    Good signal thus far

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

    There will be a growth boost from lower oil,
    Yeah – I can see that one, just waiting for the bobble heads & the cheer rally.

  • MK Ultra

    most definitely

  • Skynard

    APPL up over 6%, no earnings, WTF. /NQ still moving down:)

  • Skynard

    It has established a weekly base here, it is now or never. UGAZ has also retested it’s lows:)

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

    $115.60 and falling.
    one Helluva gap fill.

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

    chop city before the yellenator and crew wipe up crumbs… the real issue now for bulls is the PE for snp is being hit so hard by oil/gas sector that a move down is needed to make sense…but when is always the issue…

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

    I was a bit sarcastic on the gap fill.
    technically, this thing could ride on top of the bands.
    at least that’s my lens (I have no AAPL positions)

    http://s12.postimg.org/bfsa8i9ul/technically_AAPL.png

  • Bob the Horse

    I meant mutli-year bull market!

  • Bob the Horse

    Just realsied I could edit it instead.
    Mole – I think your personal email is lost in my old firm’s inbox. Do you have my gmail?

  • captainboom

    Do you mean ‘on earnings’? They announced excellent earnings last night.

  • ridingwaves

    It’s a SYN not to take small position, stop at 1.55-breakout near…easy pickings…

    http://s29.postimg.org/979f8cq9z/its_a_syn_to_breakout.jpg

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

    connect the highs to make a trend-line, horizontals are easily crossed.

  • Skynard

    Ok, did not see that. Just was looking at today. Thanks!

  • https://evilspeculator.com molecool

    Best earnings EVER – like for real.

  • https://evilspeculator.com molecool

    Nope – but you can email me at admin@ – from there I can send you my personal email if you want.

  • https://evilspeculator.com molecool

    How is everyone? Did anyone grab an entry near 2040?

  • AcoBrasil

    Yes. I grabbed mine yesterday afternoon though.

  • squirrelsome

    @Ivan: Hi Ivan, the equity curve you’ve shown yesterday… Amazing, I was too floored to ask any question. Thanks for revealing what could be possible. I guess that was your intent. Many of us fail because of losing faith. This example helps with holding it.
    Without asking you to disclose any secrets, on what time frame is that RBT working? From the graphs I think it does 6 trades a day on average, with a 0.3 R expectancy. I also assume it’s plotted for multiple pairs. Also, if you can tell me, the win/loss ratio and the SQN?

    EDIT: I just realized I might be able to extract the win/loss ratio myself, not sure yet though. So, if you can disclose the entry time frame, please.

  • https://evilspeculator.com molecool

    For a touch of reality I recommend you watch this – it’s an Evil Speculator favorite:

    https://www.youtube.com/watch?v=ew1L6SLpHgM

  • Ronebadger

    yesterday, as well

  • squirrelsome

    Thx Mole. I did some time ago, but I feel like doing it again.

  • MK Ultra

    Here comes 44.20

  • Skynard

    Lol, just waiting patiently. 30 pip stop in.

  • Skynard

    FOMC up next

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

    time marker 21:33 “Losing streaks”
    still gives me chills. mathematical fact.

  • Sean

    What are you trying to figure out with all that information? It is easier to help if I know where you are looking…

  • Skynard

    AUD “Hot and Ready”

  • Scott Phillips

    THERE IS NO THEY!!!! THERE IS NO THEY!!!

    It really pisses me off when someone loses on a trade or sees price action they don’t understand and feels the need to label it “they did this to run it up to here before they do that” or even worse “this is clear bot driven tape”

    ALL tape is bot driven tape since bots make up the overwhelming majority of volume.

  • ridingwaves

    the only thing I see is lots of selling and buying….today’s word for the day is gyrations…..

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

    Where’s BobbyLo?
    looks like I’m into DUG for a hedge. well, ERY.

  • Skynard

    ZL firmly in neg territory, see if it sticks.

  • M E

    rock n roll

  • squirrelsome

    I am trying to have a clearer image of “what is possible”. I want to see the Holy Grail. πŸ™‚

    I am also concerned that shorter time frames RBT are not all that we see in simulations or real trading limited time line.

    In particular, what I think happens when going to shorter time frames is that the tail risk does not scale. The average slippage taken into account is not enough. It’s also the possible slippage, even if improbable.

    Take for example what happened with the Swiss recently. With a good broker, IB, as Scott said, I think he got a “good” exit of a few hundred pips. The move was around 2000 pips in a second. When you go to lower time frames you have to spread your risk over a smaller pips interval. That makes the traded size proportionally larger to maintain a viable R, and the exposure to the tail event disastrous. If you were caught in a wrong trade on a 20% leveraged move in a daily system you might get out still with an account. If you were caught in a lower time frame trade on a 20% move you need to bring money from home to get back to zero. I think in Forex the liability is not limited to the size of the account.

    So I would like to know from an experienced trader like Ivan of an acceptable time frame for an RBT.

  • ridingwaves
  • https://evilspeculator.com molecool

    Looks like my evil morning plan may just pay off. Either way it’s a good hedge for the NQ campaign.

  • Skynard

    Long since the announcement last night avg .7916

  • https://evilspeculator.com molecool

    “So I would like to know from an experienced trader like Ivan of an acceptable time frame for an RBT.”

    Somewhere between 30 minutes and 30 years.

  • BobbyLow

    There is no they and “if it is to be it is up to me”. πŸ™‚

  • Darkthirty

    never quite got the benefit of a hedge. one position gains and the other loses?

  • mugabe

    yes, I like those uncluttered 30-year candle charts.

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

    a way to absorb the blow of the enemy. If the enemy hits hard enough, he pays for
    reducing your pain. it’s mind blowing.
    πŸ˜‰

  • BobbyLow

    I got out of my DIG at slightly better than BE.

    I’m in DUG now. I’m not particularily crazy about this but gots to follow the rules.

  • mugabe

    it stops the neighbors from looking in

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

    it’s moving fast, like Jan05/06.
    spurts and chops. I’m not crazy about it myself.

  • Darkthirty

    hawthorn will keep them from getting through

  • Sean

    Just my two cents, but I think you need to start by narrowing the universe of where you are looking for your HG…I believe holy grails are created, not found, but that means putting in the work to figure out exactly what that means for you, but that also means that you can’t copy anyone elses HG, so any time spent taking apart someone else’s HG will only delay you finding your own. I would start by figuring out your own constraints, beliefs, requirements, etc… then we can start talking about what is and isn’t possible given your situation. For instance, you are worried about slippage on short time frames, so why not look at how to build a system around limit orders? (if short time frames is even what fits your personality)

    Also, regarding the SNB… a 2000 pip move is relative… if your stops are 100-150 pips then 2000 pips is a 20% loss (assuming 1% per 100pips) when things finally settled. Not great, but certainly not a complete wipe-out… and if you had stops less than 100pips on a lower time frame (and/or risking more than 1% per trade), what the hell were you (generic you, not you you) doing trading CHF pairs anyway? (especially since EUR/CHF was trending down after a spike on 12/18, no reason to be long unless you thought you “knew something” or the “SNB has your back” or “it’s an asymmetric trade” or whatever BS you told yourself… those people deserved to get wiped out).

  • Darkthirty

    Make $ on your trades, hire the aussie to cripple the enemy……fun to watch

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

    C’mon, everybody’s skills and pleasure is different

  • http://www.ProfitFromPatterns.com/ Ivan K

    S’some – ‘The’ / ‘Only’ Point I was illustrating with the 2 EqC is the very different picture that is presented by R-based versus $-based Equity Curves … yet the attention and focus has been elsewhere … judging from the comments … with just 2 exceptions.

  • BobbyLow

    I agree. As it was, I held onto DIG for about 20 Minutes too long after my Chart said to dump it. It cost me some profit on the sale of DUG and then on top of that I paid a little more for DUG than I should have.
    This is where thinking comes into play and does nothing but fuck things up. When I back test, there’s never any thinking involved (there’s not even an acknowlegement of Fed Days.) It’s simply when X happens you do Y – PERIOD. In the end, I traded correctly but I’ve got to give myself a bad mark for pushing the edge on this one.

    I also got stopped for a loss on my Long GBP/JPY that I put on Yesterday. However I closed out a win on it Monday so at least there was a net profit of +.47R between the win and loss.

    All and all not as good a performance as I would have liked.

  • squirrelsome

    Thanks Ivan. I got that, but hard to not look at the unintended message πŸ™‚

  • Scott Phillips

    Careful asking for easily answered questions capable of being answered in a single sentence πŸ˜‰ As a general propostion systems with stop distances of under 12 pips in FX majors will have slippage eat into profits in a very unsatisfying way. So the timeframe you trade could be lower as long as you run wider stops.

    If you get 1 pip slippage on exit on a 12 pip stop then you are giving .08R to the market makers. If you do that in and out on the trade it becomes .16, which is too much for most systems to climb out of. You can mitigate it by entering on a limit or stoplimit and exiting on a stop.

    The holy grail, as I see it does not exist for mechanical systems, though it may in systems with a strong discretionary element. “Good enough for prime time” is the real goal. All systems, especially the very best ones, go through market phases where they don’t work at all. The more specialized a system gets, the more it relies on a certain type of price action, and the more it falls apart when it doesn’t get it. “one size fits all” systems, without exception, produce mediocre results at best (that includes the Crazy Ivan system that Mole and I built)

    Being familiar with the systems of Ivan’s students 2002-2012 they typically have expectancy between .1 and .25 long term, with a standard deviation of results making them suitable for trading with position sizes of 1% R maximum.

    It is, of course, possible that some new student has garnered a great leap forward in system design and built something orders of magnitude better than Ivan himself, me, dudeplunger, etc were able to using the same toolset.

    Most production systems (over 90% of systems used by professional traders) have an expectancy in the range .15-.3 , and most systems of the professionals I know are between .2 amd .25 expectancy. I personally have periods where I have superperformance, but this does not extrapolate out to the long term.

  • Scott Phillips

    Damn straight! “they did this to the tape” – is code for “I need to fit an explanation to the outcome” which is code for “I an uncomfortable with not knowing” which is code for “I’m a loser trader”

  • mugabe

    What about adaptive systems- ie systems that switch strategies as market conditions measured by some metric(s) change? Have you ever seen something like this in operation?

  • squirrelsome

    Thanks Scott, really appreciate it. This is what I was looking for, what could one expect the best seeing what’s out there. When one does not have exposure to what successful traders are doing, the “upper limit” is foggy and one tends to imagine things out of touch.

  • BobbyLow

    Now Short GBP/JPY

  • Sean

    That is really just having multiple systems, each with an if-then statement that tells it to trade or not to trade… making things sound more complicated than they really are is a sign of a weak system and/or lack of understanding (not directed at you, directed at the people selling/touting “adaptive system”)… true adaptive systems would automatically adjust parameters based on market conditions, not just turn on and off…

  • mugabe

    from this, it probably follows is that the closest to a HG is to simultaneously deploy a range of positive expectancy systems that operate on different premises / time frames .. something Ivan often mentions

  • mugabe

    good answer

  • Sean

    I find it instructive to look at performance over time… a system that has a long term expectancy of .26 and an SQN over 3 sounds fantastic, but looking at the expectancy of the last 100 trades over time should temper expectations of performance in any give week/month… (these are market replay results of the system I am currently live sim trading).

  • Darkthirty

    Just take less of a beating? Who talked you into that mindset?

  • Skynard

    Down we go, get some

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

    ..back from a lunch walk – Holy Mother of Perl

  • squirrelsome

    Turns out my “perception” of a strong hand going long /CL was out of touch with reality. Good thing I got out of the long yesterday based only on what the candles told me only. Lesson learned.

  • BobbyLow

    Then there is the question of how often does something like what happend to the Swiss happen? Isn’t this in relative terms a “Black Swan” event?

    I remember in May, 2010 when the Equity Market had massive drops with no bids because of “Computer Bots” malfunctioning. I had long positions that got creamed because price dropped way below my stops. BTW, I’m glad these Stops were at the market because I would have gotten whacked much more than I did if I had Limit Stops that were never hit.

    There’s not much that can be done to insure against Black Swans except to not put both balls out there on the chopping block. Probably best to keep one safe at all times. πŸ™‚

    Just sayin

  • SirDagonet

    LOL! Keep one ball safe! Kinda like don’t look directly at the laser light with your other eye…

  • mugabe

    I think that in terms of price move CHF was a definite black swan.

  • Sean

    “The current global population [of black swans] is estimated to be up to 500,000 individuals. No threat of extinction, or significant decline in population has been identified with this numerous and widespread bird.” … so I’d say there are a lot more out there than people realize πŸ˜‰

    http://en.wikipedia.org/wiki/Black_swan

  • Ronebadger

    This is the big one, Elizabeth!

  • Sean

    It is only a “black swan” if people think in terms of Gaussian normal distributions… but this isn’t physics, this is finance, that kind of incorrect thinking will get you killed…

  • mugabe

    paradoxically, the extinction of all black swans is the real black swan.

  • mugabe

    so why are you using SQN numbers?

  • Ronebadger

    VIX 20+ = not bull territory
    Nice erection…uhhhh, candle
    http://stockcharts.com/public/1092905/chartbook/143877580;

  • Sean

    What would you have me use? Or are you suggesting that because a perfect tool does not exist we should not use any?

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

    JNK isn’t exactly doing a swan dive.

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

    I think you might need to decide whether standard deviation is a valid metric to use or whether it ‘will get you killed’.

  • BobbyLow

    From time to time I’ll hedge a position with In the Money Weekly Options no more than 2 Weeks Out. And I’m doing it with Oil right now by being Long UCO and Long USO Puts. IMO, Oil is in the fuck around stage where you get decent swings that can precede a change in trend. Hey what do I know? Maybe Crude goes to $20 from here or even free. Technically, I should be short here. But I don’t have the balls to go short from this level. So instead my measured Delta relative to the Price of crude is Neutral. However, as the weekly Put options get deeper in the money, the more profitable they become. And as each option get’s closer to expiry it’s up to me to say do I want to take profit and roll this or just take profit. The answer is determined by whether crude is still a short or is it a long based on my rule set.

  • BobbyLow

    Actually it was called the “Flash Crash”. I’m not a Gaussian kind of guy. That kind of shit is above my mathematical pay grade. But I do no what the feeling of being totally helpless when one of the things happens.

    Who gives a shit what it’s called? Flash Crash, Black Swan, Its still a fucking disaster.

    http://en.wikipedia.org/wiki/2010_Flash_Crash

  • M E

    Today I obeyed the Zero’s first down arrow but I ignored the second up arrow. Muhahaha more $$$ in the bank.

  • M E

    Most of my portfolio is long in individual stocks and I need a hedge for downswings like today. So if my analysis is to go short but my individual stocks look good, I hedge with sizable short positions on the index. Works for me.

  • https://evilspeculator.com molecool

    Well, it’s an implicit hedge in that I was long NQ and saw a perfect short entry opportunity on the ES this morning near 2040. I’m going to convert that into a daily campaign now.

  • https://evilspeculator.com molecool

    Either would have been a nice scalp πŸ™‚

  • https://evilspeculator.com molecool

    You may get lucky here but make sure you’re not too heavily delta negative (i.e. short stocks or long puts).

  • https://evilspeculator.com molecool

    It’s all fun and games here but I’m pretty disgusted that only a handful of people have been trading my most excellent calls here lately. I told you guys to be long near the lows and then short near the 2060 inflection point. And then short again at 2040 today. And how many takers? That new kid ME and perhaps one more steel rat. Pitiful… I should just take down the blog and trade against you all.

    http://images5.fanpop.com/image/photos/24900000/We-are-not-amused-random-24960980-400-300.gif

  • M E

    I already had a nice profit so I just adjusted my stops to right above break even and let it run. Keeping the position overnight, let’s see if it’s a longer term campaign. I hit the stops on NG and Gold, but Bonds and Shorting the ES more than made up for it.
    My position in BEBE that I posted yesterday is up already 7% from when I recommended and it even ended green today. Adjusted my stops here and will ride this one too.

  • https://evilspeculator.com molecool

    My entry this morning πŸ™‚

  • M E

    I never short individual stocks, I think it’s too risky. Every day I go over my list to see the uptrend is intact in each stock, plus I have hard sell stops for each one that I adjust periodically. I only short indices.

  • wandering196

    I don’t say much but I still take many of your suggestions like today so thank you

  • Wyo_Redneck

    I took it as well, you also got me looking at oil, so I was able to try a small long at 44.11. We’ll see how it goes. Thanks for all the wisdom and setups.

  • Wyo_Redneck

    I meant 44.41

  • ridingwaves

    You wouldn’t have taken cash from me…I’m still waiting for this churn from hell channel to bust one way or another….great call..

  • Skidmarkalot

    Mole,,,, I took it too.

  • phylum

    Excellente

  • https://evilspeculator.com molecool

    It’s ‘excelente’.

  • mugabe

    In true counter-intuitive style, the euro has strengthened (a bit) since Draghi announced bigger than expected QE

  • M E

    Glad I took my profits on Gold 2 days ago and closed my long position. Still open: Long ZB, short ES

  • tradem4alpha

    It is still below the level of the announcement (around 1.16360); it has retraced the losses of the second day after the announcement of QE.

  • https://evilspeculator.com molecool

    ) * ) ( (
    ( ( /( ( ` ( ( /( ) ) ( * ) ) ) * )
    ) )()) )))( ( ) )())(()/( ) ) ( ` ) /( (()/(` ) /(
    (((_)((_) ((_)() ) ((((_)( ((_) /(_)) (()/( ) ( )(_)) /(_))( )(_))
    )___ ((_) (_()((_)((_) ) _ ) _((_)(_))_ /(_))_ ((_) (_(_()) (_)) (_(_())
    ((/ __|/ _ | / || __| (_)_(_)| | | | (_)) __|| __||_ _| |_ _||_ _|
    | (__| (_) || |/| || _| / _ | .` | | |) | | (_ || _| | | | | | |
    ___|___/ |_| |_||___| /_/ _ |_|_| |___/ ___||___| |_| |___| |_|

  • https://evilspeculator.com molecool

    Think long term, ME.

  • Skynard

    Not looking to hot for bulls, ZL rocking today.