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Whipsaw Galore
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Whipsaw Galore

by The MoleFebruary 22, 2019

We’re increasingly seeing quite a bit of whipsaw all across the board, not just in equities (where it’s actually mild) but particularly in the currencies, the bonds, as well as precious metals. Although I’m certain the MSM is pointing at all sorts of purported reason it’s just what you get once a rally is tiring after an extended run. 

Market participants start getting bored, which in turn activates the mental masturbation regions of their cerebral frontal lobes. And before you know it everyone’s running in circles with their hair on fire.

Late stage rallies usually get more volatile and as a market cycle conscious trader this means you add a bit of a extra buffer to your trailing stops.

Which unfortunately doesn’t always help – case in point is my E-Mini campaign which managed to scrap my trail almost to the tick, leaving me with ~1.5R in profits. Someone alert the media…

And that only leaves me with the EUR/USD campaign which made it to the 1.5R MFE mark but my rule do not permit me to advance my stop until 2R has been breached.

The XX-plus-size lady hasn’t sung yet however and I did expect a bit of monkey business when taking this entry. We only need a look at the daily chart to remind ourselves what a clusterf…k the EUR has been over the past few weeks/months.

The one setup on the horizon I covet right now is a long breach in gold > the GC 1330 mark. That was one nasty shake out and a counter response would not be unusual. If that happens my stop goes a few ticks < 1322 to weather out another retest.

If stopped out things start getting more interesting near 1314 but even there we would need to see a bit of price normalization.

Alright that’s all I got for now. Although being a short one on the trading front this was another rough week for me and I am looking forward to some gym time and much needed R&R.


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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  • Jason13

    Seems bonds are back gaining traction…added to longs late yesterday and early this morning.
    $4.6 BILLION FLOWS INTO BOND FUNDS, $12.7 BILLION OUTFLOWS FROM EQUITY FUNDS IN WEEK TO FEB 20 – BAML
    So hell yeah.
    In full positions in Wheat now and Platinum is starting its next run up.
    All is good in a no SPX trading world.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • Jason13

    I’m short euro at the 1.1340 area. I know opposite of Mole but my longer term picture has more downside before up and I think Draghi goes really dovish today. Small position.

  • Mark Shinnick

    These jerks are still whacking off on a nearly-broken paper clip.

  • Mark Shinnick

    Keep puckered BKX.

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

    https://uploads.disquscdn.com/images/c165c4815e73134f88a8f47a14ec789cfa666f674867aeda94c9040ff65cc74c.png
    Peak Ketchup b!tchez.

    (always check the weekly RSI before going full Bull-tard)

  • ridingwaves

    the cruelest melt up, leaving bears in a deep questioning mode….

  • Mark Shinnick

    Really is a work of psychological art….damm amazing things.

  • BobbyLow

    Mornin Folks,

    This morning, Crude was up around $6.00 from the February 11th Low of $51.52. The current move might be “running out of gas” and when it does “after” price really begins to struggle, I’ll flip and go the other way.

    BTW, one of the issues of catching a trend within a certain time frame is getting in after the trend has begun and getting out after the trend has ended. I never catch all of any move.
    This is because there is no magic ball to say which beginning move is going to have continued legs. So there has to be a signal of strength before entry and a signal of weakness before exit.

    Nothing new under the sun here just buying strength and selling weakness.

  • BobbyLow

    I’m assumiing he’s buying the VIX. Isn’t there an instrument to sell the VIX? I just stopped myself from saying – I’ll never understand why some traders have to always trade against the grain. I realized that I used to do the same thing until I got my ass kicked so badly that either I had to change what I was doing or the market had to change what it was doing. Obviously the market is not going to change.

  • bankwalker

    Most of the ETNs that sold volatilty blew up about a year ago.

  • BobbyLow

    If long is the only way one can trade then I think that could be like trading with one hand tied behind your back unless you’re an investor.

  • ridingwaves

    cyclical bull markets (14-16 years on average) are mean and can run longer than the your trading account can bear when short, it will be hard to top the carnage of 2008-2010, that was a once in trading lifetime..it may happen but the fed has showed their hand on what it will do if it starts down that road again, thus buying dips is still not a bad trade.

  • ridingwaves

    there are 10K other trades daily and much easier without daily resets causing their own pain….if you want some volatility go play in biotech….

  • bankwalker

    you can always short the VX futures.

  • https://www.youtube.com/playlist?list=PLEx52bnnbLmh2dnV_Vyq1ErXT79LSU6pT xenoson

    9 up weeks in a row

  • mSquare

    Buffet owns 27% of KHC and it is down 27% today!

    Will be interesting to hear what if anything specific he will say about this on his pre-advertised 3hr interview on TV on Monday

  • Mark Shinnick

    svxy breaking out to upside.

  • maxcherry

    just like 1995, govt shutdowns, tariffs and a bull market that never gave you a chance to get in

    https://uploads.disquscdn.com/images/1684fab1443a8c31d77f9487af153a9ac644adc3fbf78988ffae7575cf8297f3.png

  • ridingwaves

    nice find….history repeats sometimes….

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

    it’s not about the money for him.
    it’s about the GAME.
    😉
    good friends, good food, good times. his health, well – I’m awaitin.

    https://cdn.geekwire.com/wp-content/uploads/2017/06/gatesbuffettchairs.png

  • ridingwaves

    Florida police say New England Patriots owner Robert Kraft charged for soliciting a prostitute

    I don’t get it, all that money and he doesn’t just hire a $2000 a day escort….?

    Someone once did a spreadsheet on Paul McCartney divorce settlement and figure a 5K escort 5 days a week would have saved him 12 million……

  • Jason13

    Adding to Euro short

  • BKXtoZERO

    Good Morning! I see my fan club mentions below….. Yes puckered and questioning at this point. 2800 and a fake over was the plan that I had for a while now so I am not surprised. Getting positioned has been the hard part. I have kept it small overnight for years now unless I see a great known set up and I haven’t seen one. Just bought for the day at 29.98 today and unless something changes, will keep that tight as well and sell.

  • BobbyLow

    Yep. He could have got a lot more “Bang” for his buck. LOL

    “Jupiter Police Chief Daniel Kerr said Kraft was among the individuals caught at a “spa”, and was charged with soliciting another to commit prostitution.”

    https://profootballtalk.nbcsports.com/2019/02/22/report-patriots-owner-robert-kraft-facing-prostitution-charge/#comments

    OTOH, he’s a 77 years old widower and it’s good he can still get it up.

  • ridingwaves

    I actually am stoked he is having some fun at 77 but take advantage of all that buck to get someone to come to you and is a professional about keeping it tight to the vest so to speak…..Fly down to Costa Rica and hang out at Hotel Del Rey in a suite for a couple days a month…massage parlors are vice nirvana

  • Jason13

    Bonds are flying today. I’m thinking they’ll make a monthly high this aft.

  • BKXtoZERO

    no.. the XIV imploded and that was less leveraged at the time than TVIX. If they sold a short version of TVIX it would be pretty easy and too popular

  • mSquare

    If you mean ^TNX, they made a 52-week lows near 2.55 early Jan 2019 and seem to be headed that way or even lower at this rate

  • Jason13

    No I mean ZB

  • BKXtoZERO

    SVXY is 1/2 leverage, XIV used to be 2 I think.

  • BKXtoZERO

    exactly… totally sucks

  • ridingwaves

    that was a planned take down to not let Retail into the easiest trade available on the market…..

  • ridingwaves

    actually I kind of want to channel Scott on you but can’t…..I just know that instrument is a retail trading account nightmare, yes you can get lucky but its built to destroy your account…..

  • BobbyLow

    How about increasing position size on SVXY to make the “R” money come out close to the same?

  • BKXtoZERO

    I know that… thus the largely intra-day attempts… one of my rules is that I can only hold a decent size position overnight on a real spike reversal, otherwise. lots of stop outs which kind of stinks, but the pay offs were huge when they hit. Now it looks like there is NO volatility left as they are crushing the very thing I am trying to play…. weird that they have NO fear, anywhere. Central bank control is an amazing thing again.

  • Julie 35 – 25 – 36

    Julie is eating crow.I made a call approx 30 min before the market closed yesterday and then signed off . The last 20 min the market (SPX) nice bounce.Just like BL and BK stated at one time made a trade before a closing candle. Anyway SPX now back testing the broken trend line from yesterday.Let’s see what happens at this important trend line
    JULIE

  • BobbyLow

    BTW, you are one of the good guys and I hope you know that nobody is trying to pick on you. If we didn’t care nobody would say anything.

  • Julie 35 – 25 – 36

    Jason Unreal that SPX has not corrected with the move up in bonds
    JULIE

  • Julie 35 – 25 – 36

    Right on BL .. Teamwork
    JULIE

  • https://evilspeculator.com Sir Mole III

    Remember guys – everyone gets out of the market what they are seeking. Unless you are consistently banking coin with your system you may want to take a step back every once in a while and re-assess your options.

  • Mark Shinnick

    He operates in a rarefied stratum market niche.

  • ridingwaves

    thanks, I was going to mention that. I want nothing but great trades no matter what way, there are many sides. I wish him success in his trades.

    That long volatility trade is just tricky because really has no p&l statement, quarterly report, PE yield etc…its institutional hedge trickery….I suck at it…for me it was rolling 7’s and 11’s but throwing field rolls all day long….

  • BKXtoZERO

    I smelled this… my nose is pretty good. Got ooot… no matter what time candle

  • BKXtoZERO

    I know that. Lots of love here, always… Of course I see this area as outer bounds for doing something else for a while. I expected 2800 and I got it…. so above 2810, no more attempts by me. That was my plan… trading the plan.

  • ridingwaves

    you recognize the possible volatility tamer in last line but still betting against them? with fed backing down off rates, noting balance sheet reduction end of year, risk is on by looks of it, China trade deal overhang solved, yikes….

    last comment ever on this trade, start building another trade out with your experience now and measure some results.

    don’t bet against vixens….no ill intent…random thoughts from a stranger on same cool place to hang out…

  • BKXtoZERO

    Ya…good idea. Like I said I am close. I can remember times where everyone here was pretty bullish and my theory of fake outs paid off big 3-4 times in the last year. Remember those too. The MKT does seem pretty self assured this time.

  • evilasevildoes

    ….and Breaking news

  • Mark Shinnick

    Reentered some shorts….it’s been a great area for capitulations, but keeping it supertight.

  • Sp00nman

    Ya, I’ve come to realize (learned it the hard way) that inverse etfs, and especially leveraged inverse etf’s are great at killing your count for anything but intraday, or unless you happen to pick a top (not very likely). Mathematically the leveraged etf’s are good to short but bad to go long and hold. I’m a firm believer that you either short something directly or via futures, or not at all.

  • evilasevildoes
  • Sp00nman

    I’m pretty amazed BKX that you’ve managed to trade in and out without taking big hits with TVIX, I’d have gotten killed. I think this perpetual move higher has taken all the bears to the woodshed looking for a retrace. I got smacked pretty good myself.

  • Sp00nman

    Market sentiment definitely seems pretty bullish these days.. Going straight up almost 450 handles will do that I guess.. lol

  • Julie 35 – 25 – 36

    Mid January TLT has extended it’s uptrend.So now we have bonds and equities moving up together. There will be a winner IMO bonds will prevail
    JULIE

  • Sp00nman

    Ya I’m looking forward to those videos you said you were making.

  • Julie 35 – 25 – 36

    SP I do not trade the leveraged ETF’s Only on occasion a day trade and no other time
    JULIE

  • zzezzezz

    LOL

  • Sp00nman

    Julie, Hey, if you can trade em great, I’m just saying from a “buy and hold” perspective you get fucked on the “slippage.” As RW said, I think they’re primarily a retail trading acct nightmare.

  • Mark Shinnick

    If the upside SOB disappoints there will be disillusionment.

  • Julie 35 – 25 – 36

    SPY volume is less than at Thanksgiving week. SPX not going up due to buying but lack of selling. The trap door will open esp with the rise in bonds
    JULIE

  • https://evilspeculator.com Sir Mole III

    They are coming for sure. VERY COOL STUFF in fact is in the works as I have partnered up with a quant buddy to bring you… (drum rolls)….

    Red Pill Quants

    It’s going to be glorious 🙂

  • https://evilspeculator.com Sir Mole III

    Inverse IV ETPs are extremely difficult to trade for most mortals. VIXEN exploits the very fact that a lot of retail traders have a tendency to buy IV irrespective of the fact that IV drops ALONG with the market 57% of the time. Let that simmer in your mind for a moment 😉

  • https://evilspeculator.com Sir Mole III

    Here’s Ernie Chan’s seminal post on the subject:

    http://epchan.blogspot.com/2015/11/predicting-volatility.html

  • BobbyLow

    I think we all have our favorite things to trade. I’ve had a lot of experience trading Options (Mostly bad) while having a lot of success trading 2X and sometimes 3X ETF’s. I read this all the time about how the rebalancing of leveraged ETF’s are a depreciating asset etc., and of course they are. They are not a buy and hold investment but if I am able to hold onto a leveraged 2X or 3X for a 2 or 3 month Swing Trade, I would have made a shit load of money and my shrinkage due to daily rebalancing would be minimal especially compared to the Theta burn and threat of expiration holding options etc,. Again thinking about the shrinking value of options makes my skin crawl. So I suppose it’s like the old saying “as compared to what”.

    I agree that Futures are the safest and most legitimate trade around. However, some of us can not play with wide stops trading futures. We can day trade them and I have but I don’t have the stomach for that anymore. I’ve traded the micro futures as well and they can get caught up with bad fills due to small volume etc. So there is no easy answer to what the best thing is to trade. There are advantages and disadvantages to all of them.

    The bottom line is we have to trade what is best for us individualy.

  • Julie 35 – 25 – 36

    SPY Weekly Chart Going up into upper cloud boundary(strong resistance) MACD 3.9,16 at a level where a pullback can be expected RSI @ approx 58 Weekly STOCHS overbought Volume declining SPX weekly similar and close to upper cloud boundary. Rubber going to meet the road shortly JULIE https://uploads.disquscdn.com/images/9a308d6ea9c7853397bb1e9410ebe79efe7829aa83c9ff2feefe279fa8695128.png

  • bankwalker

    short /ES 2789.50

  • Julie 35 – 25 – 36

    I agree SP You and RW correct as I stay away from them
    JULIE

  • Sp00nman

    Good point BL, I clearly misspoke, everything is relative for sure.

  • ridingwaves

    caveat for sector and commodity 1x,2x, 3x etf’s is an underlying asset, not so in volatility…

  • Sp00nman

    Let me know when you get Blue Pill Quants rolling and I’ll sign up for that. 😀 Hmm.. on further thought I guess Blue Pill Quants would probably be the road to ruin.. lol

  • BobbyLow

    I remember when the average daily volume of SPY was 250,000,000 shares per day. Some of the reduction has been due to major increases in baskets of ETF’s, ETN’s etc,. But I think that volume has been on an overall downward trend for years.

    My gut (that I wont trade until when and if it happens) is that the market is waiting for the China situation to resolve and then it could be a “buy the rumor, sell the news” type of thing or another blow off top. The public as a whole has been reconditioned to the market can only go up. Although this Bull has been wide spread and uber long lasting, it reminds me of “Buy Tech and you’ll never lose” and or “Housing will never go down”.

    OK, then. 🙂

  • BobbyLow

    Yes, agreed.

  • bankwalker

    My guess is that if you add up all of the (dollar) volume of all of the different ways to take a position based on the value of the non-tradeable SPX index, the volume has probably increased.

  • Julie 35 – 25 – 36

    Yes BL A China trade resolution is paramount as was a Fed shutdown resolution.People are also conditioned to the FED having their back.There are some bullish developments i.e. buybacks continuing at a torrid pace. China injecting huge liquidity BOJ owning a large portion of Nikkei BOJ going to own 90% Who is going to buy Japan ?. Unbelievable what they are doing NOW I am watching $DAX and EUFN I repeat again Not Healthy U.S. markets not immune to Europe
    JULIE

  • Mark Shinnick

    Gone shorter…

  • BobbyLow

    Sure that’s possible. I remember when the DOW hit 10,000 for the first time. I’m too lazy to look it up but it was in Apx. 1999 – 2000. So the value of the dollar 20 Years ago was much higher than it is now. Therefor the numerical dollar volume today should be much greater today.

  • Julie 35 – 25 – 36

    SPX Adding a little more to short position
    JULIE

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

    BL and BW Carl Swenlin on stockcharts (descision point) has done studies on dollar based volume
    JULIE

  • Julie 35 – 25 – 36

    GG I have not found a good recipe for “Crow” Any help with a tasty recipe would be greatly appreciated LOL!
    JULIE

  • bankwalker

    I know that 1 /ES contract supplies the same leverage a 500 shares of SPY.

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

    Make sure you wear an apron. Wouldn’t want any burns.
    LOL.

    https://www.outdoorlife.com/blogs/cast-iron-chef/cooking-crow-meat-recipe-blackbird-pie

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

    extremely phallic in nature.
    But the B-1 bone is the penetrator!

  • Julie 35 – 25 – 36

    Thanks GG I will add a little bay leaf ! LOL!
    JULIE

  • ridingwaves

    color me nuts, but NG inverse H&S could be in play, 4 hour chart, trendline break with rollover would be evil…
    https://uploads.disquscdn.com/images/5d7a9860c990f0614252ff97b6c28cb4b7b56f4c77477ca15011d4f9be4055fe.png

  • Darkthirty

    Had a lab that would fetch anything except crows, they must taste like they smell

  • BKXtoZERO

    ya, I was waiting for 2.50 Nat gas to try UGAZ again, thanks.

  • Mark Shinnick

    Ezed out …stay puckered.

  • Julie 35 – 25 – 36

    D30 have you ever seen a crow up close. Everyone are beat up .. Completely ugly
    JULIE

  • Julie 35 – 25 – 36

    Just like yesterday Who in the “Hell” is buying this market in the final 40 minutes ? Get out of my “Pot”
    JULIE

  • Darkthirty

    # 4 shot in 3″ mags rough em up pretty good!

  • Mark Shinnick

    Its just a natural waterhole area, tons of opposing models all duking it out.

  • Julie 35 – 25 – 36

    Mark as I type pulling back from 61.8% retracement and an upper downtrend line Not worried. My total short position is small as I have added small increments I can wait anything out Mark Have A Great Weekend
    JULIE

  • Jason13

    Well no monthly high in ZB (decided to do a little 3 wave correction on the 15 min) but hopefully next week.

  • BKXtoZERO

    Out of TVIX day trade again 30 to 29.57…. longest stretch of no results in a long time. I see very long term trendline broken on all markets and we rallied right to the underside right here right now. Looks 50-50 to me. No big bets by me, continue to look for intraday opportunity right in this area. (holding small and down)

  • BobbyLow

    We had a C-141 fly into Ramstein AFB before I left in 1967. This was an awesome aircraft for its time.

  • Julie 35 – 25 – 36

    Yes Jason I see the 3 wave correction also What a squeeze with “Jack poop ” volume. Going to fall under it’s own weight. Going to need volume for a breakout of 2800 The upper cloud boundary SPY and SPX very very close to upper cloud boundary. For those unfamiliar with Ichi Cloud the upper and lower cloud boundaries act as magnets and very strong resistance and support. High probabilities of reversals at boundaries Jason Have A Great Weekend
    JULIE

  • Jason13

    You too Julie

  • Jason13

    It’s all about the China talks folks…I’m with Bobby, this potentially could be the biggest sell news event in recent market history. Either way, keep lots of gun powder and don’t be the first ones off the battle lines only to get mowed down by a Gatlin. Let’s go rats!

  • BKXtoZERO

    ES large triangle is all I am looking at, expecting throw-over 2800. and…. I’ll be there to give them a try.

    https://uploads.disquscdn.com/images/391ac4d88e8c1324bf981d612c7c843c535fa2c98ef17f902f746ea757417bb1.jpg

  • Julie 35 – 25 – 36

    We rat’s are ready. Plenty of dry powder and ammo.Bring it on ! Julie ready !
    JULIE

  • https://evilspeculator.com Sir Mole III

    Have a great weekend everyone!

  • evilasevildoes

    good ole bullish percents held in I picked up Vale at lows UNG at lows will sell at 25 UNG Boil
    JNUG at lows goro hmy mux

  • evilasevildoes

    I was watching Spy puts

    in 2007 I sold mine to early so this drop I will stagger as I go

  • Julie 35 – 25 – 36

    European Financials is what i an watching closely. EUFN Weekly Chart overbought going up int a fib retracement gap window resistance and weekly 21 ema. You can see a possible inverted H & S pattern developing which is more noticeable on the daily chart. European Financials a different story than U.S. Banks ($BKX) Also $DAX has been in a downtrend since January 2018 Also bonds (TLT) continuing it’s uptrend.Guys there are red flags IMO pay very close attention.I am neither a bull or bear and just pointing out the potential for a strong move lower.Everyone Have A Great Weekend JULIE https://uploads.disquscdn.com/images/3fb51eee84def8f4137427262c4f4a14b362f87bd5a84a4532fabd17c7ecffe7.png

  • Julie 35 – 25 – 36

    You too Chief
    JULIE

  • https://evilspeculator.com Sir Mole III

    Plus you can trade much larger positions. With SPY you need at least half the notional value in your account (assuming you use a standard 2:1 overnight margin requirement).

  • Julie 35 – 25 – 36

    Guys $BKX Weekly chart going up into it’s weekly 55 ema with RSI @ 52 and overbought Rubber going to meet the road here too. Next week going to be very interesting JULIE https://uploads.disquscdn.com/images/75e12f057aa504f68c54eda618b90702416e577c89097118cd350048aae76d9e.png

  • BKXtoZERO

    Not at zero yet!

  • Jason13

    And next week’s economic calendar is LOADED with serious market moving events.

  • sutluc

    Yes.

    For some reason there seem to be large numbers of staunchly resolute “bears” in the retail landscape.
    Nothing gladdens the heart of a retail bear more than the idea of vol skyrocketing while they hold a leveraged long vol instrument.

    I used to be such a furry animal, until I came to realize that that way lay ruin.

    It is much easier to be inverse vol, wind at your back much of the time. Must have a system that kicks you out before you get reamed of course.

    The “volpocalypse” was a tremendous pain in my ass, not because I lost money, I was out on January 24th 2018, but because I was forced to change trading instruments, review systems with different etf parameters and so on.
    I feared that the “buy and hold inverse vol” crowd had injured themselves so badly and whinged so loudly that regulators would kill the inverse vol etf’s completely, but so far there are survivors.

    The last year has been a period of being in cash much of the time for me, however when it triggered my short vol system still made money overall. Not low volatility bull market money, but profits nevertheless.

    At no point over the past year have I been tempted to try and build a system around long volatility etf’s, leveraged or otherwise. It would just not work for me. I have a busy demanding life that precludes me from hanging over a screen trying to guess what an instrument loosely tied to a mix of volatilty futures contracts might do over the next hour or two. (Or commenting on forums during market hours for that matter)

    All my respect to anyone that can consistently make bank doing that; I can’t.

  • Ivan Hrusovsky
  • http://iberianviews.blogspot.com/ catracho

    but unfortunately all eyes still on the China US trade deal – even though news doesn’t matter – it just gives people an excuse not to disturb the status quo

  • Julie 35 – 25 – 36

    Catracho Strong possibility trade deal already priced in
    JULIE

  • http://iberianviews.blogspot.com/ catracho

    yep agree with you on that ..pop n drop on the news – or just drop!

  • https://evilspeculator.com Sir Mole III