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Wednesday, December 14, 2011


NOW OR NEVER



Here I have the chart of the Naz and my nemesis indicator, the COT Synthetic monstrosity I created. You can see that it has been pretty much "dead on balls accurate" ( love that line out of My Cousin Vinny ) in this market with it's recent signals and the near term one was a sell. I just wish this indicator was always this good but it is not.When I combine this with the fact that we are in a weekly down trend, and we have the POIV heading sharply down, it tells me we could have some real trouble here. We are also at a time in terms of cycles and seasonals, that we should be rallying. I am a big believer in the concept of divergence in the following way. When something happens differently than what should happen, that something is speaking very loudly. As a result, if we do not rise at this time during the year, with all the reasons as to why we should, that could be an ominous sign.

I have been wrong about the currencies being buys down here and the DX being a sell, since they have cascaded downward. It does seem like the whole house is coming down right now. It might be. I have to admit that I just don't have many signals for trades here in either direction. I was looking at the Crude sell, but I admit that I passed on the trade due to the seasonal up bias being so strong. A mistake it appears. I am not going to make too big of a deal about Gold here, this is exactly what I have been telling people was going to happen. This is how markets look when the game ends, and the exits get crowded. It is what it is. Follow your plan and don't get emotional. All of the trends now no matter how you look at them, have broken. I have the last hope trend line drawn in here, and it has been broken today. I really have to admit I thought this was going to happen at the beginning of next year not now, but the equity weakness has gotten to this market.

THE GAME IS OVER NOW WE ARE JUST WAITING FOR THE FAT LADY TO SING




Please no emails telling me about fiat currencies, the dollar, money printing etcc. I will just delete them. You have been sold a bill of goods, what else can I say. Maybe we will get a bounce for people to get out a little better, we are extremely oversold, but I would not bet on that. I take no solace in seeing people get wiped out like they are in Gold right here. Saying I told you so does not make me feel any better. For those who still refuse to accept what should be so obvious, think about it this way. If that chart were the price of tea in china and you were not so emotionally invested in where it might go next, would you still think it would rise to $5000? What I am hoping for is a sharp rally up into January to position myself for the next $1000 down move that is coming here. If we get into a liquidation type of situation which is what it is starting to look like here, this bounce may not come. We will just have to wait and see.

Overall, I am trading lousy this month. I am just having a hard time finding trades that meet my parameters. I would love to tell you I have nailed all of this, but I have not. I have managed to stay clear of losing a lot, but that is hardly anything to brag about. It is a tough environment so be patient. If it is not clear to you, don't take the trades. There is just a strange under current to all of this, I just can't put my finger on what it is yet.

Good Trading




5 comments:

Matej Marek said...

Hi Chris,
I appreciate your honesty and that you are not afraid to admit when you miss some trades. Especially during these days when it seems to me that everybody was correctly predicting fall in EURUSD and making a killing on the short side. Of course they never mention their losing trades. During the weekend I read on the Bloomberg that the surveyed analysts were the most bullish since November 11, which unfortunately happen to be the area of the intermediate term high. What a joke these analysts.. I don’t have access to LW sentiment index but this Bloomberg indicator performed quite well during recent time. I didn’t short gold, I was very hesitant after the sharp decline on Monday. Anyway, always looking forward to your commentaries.
Good luck!

colin said...

Chris, I see you highlight inside bars on your charts. In what way/s do you use them?

thanks

Anonymous said...

Is there any chance this is a bottom like it was on Nov 25,
(which you nailed), and ES is due
for 50-100 point rally from here???
Why this time is different from Nov 25 bottom, whcih was equally scary and clueless at that time?

Thanks

Mingoman said...

Again... one of the best trading blogs on the net.

John M said...

Completely agree with you on gold, and have had very much the same thoughts for quite a long time. I happened to check out the comments on Slope of Hope yesterday and the gold bugginess was overwhelming. People were talking about this down move as a great buying opportunity for physical gold, especially when it gets to 1450, which is as far down as they can imagine. And of course, there was eye-rolling snickering about those silly naysayers and mocking comments directed toward someone who had the temerity to point out that gold is just a metal, with few practical uses, at that. It's pretty amazing to me how much Kool Aid has been dispensed and consumed by normally intelligent people. Gold has no more intrinsic value than paper money or stocks or bonds or artworks. It's only worth whatever someone agrees to pay for it, and you only need one exchange at a very low price for the whole house of cards to come down.

But I'm preaching to the choir. By the way, you're still writing the most interesting posts on trading that are on the web. Nice job, and thanks.