01-MAY-2013 Free Public post
I will let fate to lead them to my site and at least give them a chance to read a more cool-headed view.
My long-term readers and subscribers know that I gave 2 years of free service before we decided together to open my premium site. I still feel to serve wider public, and now, when we have an idiotic bull on equities, also a tempting setup on gold, and now an important signal on dollar, a small window should be opened to the world of ours and let people to read our unique readings. While my analysis will be available free today, all my MV setups will be cut and remain our secret.
ForApple-lovers: we have an MVO bear/bull switch here. Odds are high for a trend-change. I gave my pessimistic opinion about apple last November and early this year, but if you remember, few weeks ago I warned you prices are bottoming and stock became undervalued. Both histos are to give a bull cross. Also, we can measure fakeout II. as buying volume elevated now from steady zero on SBV: long/short institutional bearish bets are 49:62. It means institutional traders less bearish on long term for now. Setup is optimistic. It's not clear how will this setup match into the large picture of equities, where recent bull became extremely stretched for now, so way up might be bumpy, or Apple is to move sideways while general correction on equities will be in process. However, it's better to read the tape and tape tells Apple is bottoming.
Chart above is Apple 2D.
CRB is to wake up as well.We have a bull cross on short SBV, so we can measure fakeout III. +3:-16. LT institutional bearish bets are still there, but something is happening in the background at least... We must wait until long SBV gives no bull cross.
Also please observe the BOW candle with positive HA and pretty strong volume candle at last candle.
Chart above is CRB 2D. Commodity complex starts to show rather bullish signals but need further confirmations.
I have a friend. He is a dollar multi-millionaire. We have a daily connection as he bought miners recently without reading my newsletters. We have a 10+years of friendship, and I must say his intelligence and general sense for business life is well above of my capabilities. However he bought a huge pile of NUGT on 10th of April. Next Monday he called me and asked what to do as he will lose more than the half of his position if still in NUGT. I felt his problem... it should've been a true nightmare to see miners between 8 Apr to 18 of Apr. Actually my advice was to cool down and not to sell, rather I gave him a half an hour discussion every day about miners, built a strategy to save his money and we discussed about gold, dollar, equities, silver and oil. It was a true lesson to me how stressed was he and what kind of mental torture had he suffer during this time. I strongly believe institutions use sociopath traders for miners make such trades where they exactly know when will people panic out. They mastered themselves and their trading algos to make the most challenging technical tricks, also they know how human emotions work and somehow feel when steel-nerved, mentally prepared traders deal with miners for long years now say 'gush... enough is enough'. I would not call myself one of those steel-nerved ones, but I follow miners for 5 years now and I know their tricks. What miners do this week with their prices is a true nightmare. As you know I bought a medium position of NUGT @9.9, so I can easily hold, but hearing my friend and his doubts, also watching how: -dollar collapses and have almost no reaction on gold -equities to rise and miners to move down or meander -suddenly gold starts to rise and tries to attack 1500 but miners just go down or give a sideways move -make a loss early intraday, disappoint masses, then just go up for the last 2 hours like a hero
So watching these moves with his eyes and feeling his doubts was a true lesson to me to understand the technique of miner-traders. These highly intelligent sociopaths really, really do everything in order to pull the money out of the pocket of smalls and each-other. In addition, I feel miner are just before a global recognition as a last free source of gold as most of the gold reserves will be under the lock of central banks soon, so for the time being everybody will be disappointed and freaked out and swore he will never-ever touch the nightmare miners, GDX and that terrible, nightmarish NUGT, miners will just fly.
For us, volume bugs the task is hard but much easier than large public: we can see the internals and understand what is happening behind the curtains as we check volume indicators not the price. The primary tool of their manipulation is the price. They buy when others cry and sell when others smile. And this is a law for trading miners. A number 1 law.
Let's see juniors first. As you can see, both long and short SBVs give place for fakeout I. and, accidentally fakeout II. Why: -one of the oscillators under critical level (in our case the short one gives +31 reading and critical level is 33) - > fakeout I. -SBV has an elevated buying volume (both SBVs are in this position now) -> fakeout II.
Chart above is juniors 2Df
We have a sequence of pretty strong BOW days with positive HAs for juniors, but an important MA gave a block recently. SBV Flow is slightly bullish, while both histos gave bullish crosses. However long vs short oscillator ratio is -68:-44 therefore odds are high for a fake bull breakout. MA20 (which is 40 on 1D) - blue line can be used as an indicator whether juniors are to be ready for a bullish turn. It's on 15.11 now, so we must sit and wait whether that level is broken finally or that MA will reject juniors again.
GDX has a similar setup as GDXJ but long histo just gave a slight bullish +1 reading. What is more important SBV Flow gives 100% level reading. However, condition for Fakeout I is not here as oscillators are -48 and -58 and below critical level, while SBVs give non-zero buying volume readings for now. We must wait a little for GDX in order to have all the conditions of measuring fakeout II.
I roll to my preferred miners chart: HUI 2D instead as it has more than twice more volume behind than GDX.
Chart above is HUI 2Df
First of all, average volumes rose to 62s from 40s since mid-February. It means larger and larger institutional interest around miners. Sharks and megalodons are around and as I told you, their entry was brutal, but they could not do other than provoke waves of selling panics with their 150%+ volume insertion.
Instead of my friend, we, volume bugs could avoid the last, nasty drop. He made his purchase in the middle of a selling volume cycle on 10-APR, just after long histo gave a clear bear signal. That time long oscillator was without a bottom and gave -23 reading and SBV flow was on -100%. Definitely not a setup to go long. Since then, long oscillator bottomed and now lost 20 points (rose to -32 from -52). Also SBV has an elevated buying volume, so we can perform a fakeout II. Long: short oscillators are -32:-30, so they are in sync meaning a non-fake setup for now. They should unsync slighthly if prices to go up, but keep their momentum. We need to wait for fakeout III, where SBV will give a bull cross. Also, I would like to see a decisive, strong spike-thorugh of MA8 (MA16 on 1D) before any kind of optimistic view. Please note McClellan and VAO bear/bull switches. Former gave a bull switch on 18-Apr, latter on 26th of April. While miners give promising signals, they are still not safe. As you can see, SBV gave a bull cross in mid-march since 28-Sep. We are in a huge and exhausted bear and for now nobody will believe that we are at a bottom. However, I will pull the trigger immediately, if we will have a bull cross on SBV and make an attempt with stops as we made in March. That time our stops protected us against a major loss, and now we will do a test again. I must stress my opinion: holding PM rather miner stakes represents a high risk and you should understand the nature of their high volatility. They are traded by nasty institutional traders have zero emotion or moral. If you are not prepared to swim in this water, then trade a different instrument. Otherwise you will lose your money. In turn, once PMs change, you will enjoy dream gains.
Price manifestation of this, upcoming bull volume cycle(declaration of a bull volume cycle is to see a bull-cross on SBV and we have no bull cross there yet) will tell a lot.
Regarding to gold, unfortunately it has a clear fake bull setup meaning one more drop for gold at least. Short vs. long oscillator is -25/-86 meaning a fake bull setup. Institutions need to get rid of their bearish stakes and would like to cover on cheaper level. We have a declining momentum as well.
Chart above is gold 2D
We have an elevated buying volume now on RUA 2D. We followed the rise of RUA and oil since last mid-november, but I left this, last squiggle for others. As you can see, institutions practiced a slow and cautious pull-back, and as I don't want to be smarter than they are, I did the same. It's pretty easy to trade RUA I feel (instead of PMs)...
Chart above is RUA 2Df Please observe long oscillator is not building up. Strictly said we have a fake bear setup, but at this VIX level I can't imagine a huge rise... maybe a new ATH will be generated after the FOMC meeting just to load cheaper short positions before a correction.
We have great news on dollar!
A bear/bull/bear MVO surge setup. You can't see the third one yet, but please check on the left side, it's there. Bear/bull/bear switches are rare and usually signal a general and decisive trend-change. You could see the effect of a bull/bear/bull switch on bonds a month ago. Price manifestation was impressive there. As this, dollar bear/bull/bear switch comes from a bull dollar cycle with slight price manifestation, odds are high to see further bearish continuation for dollar. That SHOULD practice pressure on PMs and finally rise prices there on a dramatic way. Stress is on SHOULD. We trade facts, and term should is a wish. We must remain calm and have zero emotion, and evaluate our bear/bull/bear dollar switch as is: an important signal.
Also we have a decisive, large volume candle SOS day. This is what I was missing. We have a BB crash now, also we are in a BULL volume cycle, so a surprising contra-bull is a high probability, but as long as we have an MVO bear surge in effect prices will move down or sideways.
Chart above is dollar 2Df
Also, if you go to 30-min SPX-mini and dollar chart, you will see a short-term FED manipulation.
Chart above is ES vs DX 30m TS
Oil declared a bull volume cycle on 26-apr, but we measured a fake bull there. As it has a +4:-25 short-term/long-term reading on oscillators, and equities to correct any time I will not bet for the long side.
I feel must warn bond-holders about the recent, several SOS days, stagnating prices and now we have an almost bearish long-histo and a bearish short histo. It's an early stage of a topping signal, but I feel, tighter stops advised at least or slash on bull stakes.
Chart above is 30ybonds 2D
Trading update: hold existing stakes. Prepare for a jump into miners and gold with tight stops soon.
Office memo: please note that posts with tag 'Gery' are not mine. They are pointing to the site of my friend, Gery. He is excellent in options trading. Our approach to the market is totally different: I prefer directional trading, use futures, mini futures, 2x, 3x etfs, and options to ride directions, while he is using options for non-directional bets. He is pretty successful and he is a pro trader and trainer. I help him to have new members on his site. I must stress that I have ZERO financial interest on promoting his site (actually I lose subs have interest in my curses on options trading). You can say it's not a business-like behavior from my side, and you are right. Simply, I don't care about making money on options trainings.
Office memo2: However, I must say something: non-directional bets represent high volumes and frequently used by institutions. Why? If you participated on my on-line course last year on options trading I gave you my insights: I compared options trading to a case of insurance: you bet on a direction (something will happen for e.g. travel insurance to Africa for 2 weeks - you will get a disease or have a car accident there) and insurer bets against you (hey, that will not happen) as time goes, your bet is on a loss, but his bet is on a win. You pay money at bid, and odds are high you will never see that money again (but actually that will make you happy as you survived Africa and have good health).
Imagine you buy a call @strike 30 for 2 months and price is on 27. That means a sell option is written against your bet by the market maker. His bet is prices to stay below 30 or be on level 30 for the next 2 months. It's 2x more direction than your direction 66% probability while your direction is 33%, also while time is going and prices are not rising to level 30, your wish remains a wish, while the market-maker's bet remains a reality. On top of that, premium is yours at sell or expiry while market maker gets the premium immediately. (In addition, when market maker is to see an issue with his bet, he just leaves his position and his loss is absolutely limited) Time (theta) is actually against you. This is the reason why most of simple calls expire worhtless and leave smalls disappointed (not talking about implied volatility that is not understood and beginners believe they will get linear or rather exponential gains in their direction and surprise, when they'd get better profit with a 3x ETF) Well... true money making and way of being rich is to be an insurer.
Office memo3: I received several extensions and new subscriptions for SVT Premium. Many thanks for all of you!
(C) 2004-2012 Deric O. Cadora and Atavia, Inc.
Futures and options trading is risky and not suitable for all individuals.