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Evil Speculator

Evil Speculator

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 market schemes at various social media waterholes (e.g. youtube, facebook, twitter, stocktwits) and of course on

Articles by Evil Speculator

Systematic Trading – Unwrapping the Onion

March 16, 2017

Lumpy but Robust
[ed note: this article has originally appeared at the Evil Speculator and was written by trader and ES contributor Scott. We provide a link to Scott’s past articles below this post for readers who want to get more familiar with his ideas and/or any unusual terminology used in this article]
One continual theme in my trading is that every time I think I have it figured out, I get punched in the face by an unexpected problem. The tendency is to go more complicated, but often the solution is a degree of acceptance with respect to the nature of the game. Sometimes my edges work, sometimes they don’t. Sometimes they stop working for long periods of six months or more.
Financial markets – multi-layered like onions

That’s actually fine for me, but it isn’t for many

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The Futility of Predictions

January 27, 2017
The Futility of Predictions

Awesome Forecasts and the Unknowable Future
Back in late 2013 I wrote a piece on human nature which was in part inspired by the bullish exuberance exhibited by a MarketWatch article predicting the DJIA at 20,000 in the near term future. Yesterday afternoon, a bit over three years later, that prediction actually became reality and I’m sure the author of that article as well as many other like minded traders popped some champagne in celebration of their awesome ability to predict the future.
A trader from the (near) future.
Image via

Now don’t get me wrong, I’m happy for those guys and for the Dow Jones. Assuming of course that everyone involved actually put their money where their mouth was back then – which ever few do. And that in essence was the underlying message of my

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Return of the Loonie

October 28, 2016

  Holding Pattern When it comes to interesting charts or marginally promising setups I’m pretty much scraping the bottom of the barrel right now. Not surprising really, given that the few remaining market participants (bots! cough cough) are firmly set in a holding pattern after a one year sideways churn and an impending Presidential election on November 8th which is …

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British Pounding

October 7, 2016

  Flash-Crashed Earlier this morning the British Pound suddenly found itself on the receiving end of a 6% flash crash during Asian trading hours. Some of the losses have been recouped since then, but that will be of little consolation to anyone who may have been long the GBP overnight.   Oops. Photo credit: Time & Life Pictures …

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An Old Friend Returns

August 11, 2016

  A Rare Apparition An old friend suddenly showed up out of the blue yesterday and I’m not talking about a contributor who had washed out and, after years of ‘working for the man’, decided to return for another whack at beating the market. Instead I am delighted to report that I am looking at a bona fide confirmed …

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Fractal Monger Reloaded

August 2, 2016

  Fractal Geometry of the Markets You probably wouldn’t know it but I have actually been extremely busy over the past few months resurrecting a previous creation of mine. It all started about two years ago, in early summer of 2014, when I wound up diving head first into more advanced topics such as machine learning, artificial …

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Mid Summer Momo Update

July 25, 2016

  Mid Summer Momo Update It is hot and it is humid over here in Valencia. You want to know how hot? The other day a poodle’s tail caught fire just waiting in the sun. The more frantically he was wiggling his tail the brighter it burned.   A time for quiet contemplation of the bright blue …

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Long Term Market Perspectives

July 12, 2016

  Methuselah Tree When looking for a good theme for this post I pondered for a while and then decided to use a picture of a bristlecone pine, which are widely considered to be the oldest living trees in the world.   Ye olde bristlecone Photo credit: Kosta Konstantinidis   You can find them near the Nevada/California border and if …

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Market Update for Purists

July 5, 2016

  Net Lines It’s that dreaded day after Independence Day. The weather is gorgeous and I don’t really feel like trading either. The thought of just phoning it in had occurred to me, but as the new month just rolled over I thought I may as well take another peek at our monthly charts. Which uncovered quite some interesting perspectives …

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Rule Britannia

June 24, 2016

  A Glorious Day What a glorious day for Britain and anyone among you who continues to believe in the ideas of liberty, freedom, and sovereign democratic rule. The British people have cast their vote and I have never ever felt so relieved about having been wrong. Against all expectations, the leave camp somehow managed to push the referendum across the center line, with …

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The Wall Must Fall

June 8, 2016

  Do or Die I think I speak for everyone involved if I say that it’s way past high time for this market to either breach the wall ahead of SPX 2150 or finally accept defeat and relieve itself to the downside. It’s become a war of attrition at this point as we have been suffering through this deadlock of a market for …

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Trouble in Paradise

June 3, 2016

  Dismal Number Bombardment The May NFP jobs just dropped half an hour ago and the numbers were was so dismal that it left a smoking impact crater across equity futures. Apparently we added 38k jobs which was several standard deviations below the median forecast of 160k.   Someone just threw a hand grenade M33 into the …

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A Few Charts for the Road

May 27, 2016

  Yellen Looms We’ve got a bit of a double whammy going on today in that it’s the last session before the long weekend plus Yellen is scheduled to speak late in the day. So it’s probably fair to say that few of us are going to be doing much on the trading front and I …

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Second Quarter Long Term Update – US Stocks and Euro

May 26, 2016

  Cold Spells My favorite quarter of the year is slowly drawing to a close, with Memorial Day in the U.S. marking the beginning of the long awaited vacation season. It’s been a long winter and we haven’t really seen much of a spring over here in the Mediterranean to be honest.   The spring, as it is supposed to …

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Precious Metals – Short Term Trading Update

May 17, 2016

  Not Easy, But There Remains Potential As equities continue to gyrate over respective medium term support levels I do not feel particularly tempted to get sucked into placing any haphazard directional plays.   The King of Bling Photo via   Precious metals are not making it easy for us either but appear to be more promising as …

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Two for the Price of One

May 10, 2016

  Another Vega Crush Target Macy’s (M) may not be anyone’s favorite place to shop these days, but its volatility curve is set up nicely for a vega crush campaign.  We’re going to look at two different ways to take advantage of M’s volatility term structure ahead of earnings (tomorrow morning before open).   Macy’s …

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BABA and MBLY Campaign Debrief

May 9, 2016

  Operation Vega Crush Part II – Post Mortem Before we get to the specifics of last week’s option campaigns, I wanted to cover a few interesting observations we made from our strategies this past week. In an effort to show how little risk is associated with these types of vega strategies, I actually believe …

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Vega Crush Candidates

May 4, 2016

  Second Helping The first round of our IV crush earnings plays was a resounding success and as there’s about a week’s worth of announcements left in this quarter we are pumped and ready for a second helping.   The next round of Operation Vega Crush begins Photo via   If you are new to options then I …

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Making it Rain During Earnings Season

May 3, 2016

  Operation Volatility Crush – Post Mortem [ed note: this is a follow-up to “Let’s Crush Some Volatility”, penned by the aptly named Ray the Options Executioner for the Evil Speculator] Our introduction to earnings-based options strategies has started off with a bang. Actually, it’s hard to imagine a much better results for our first …

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Let’s Crush Some Volatility

April 26, 2016

  Searching for Victims If like me you were a Monty Python addict back in the days then you are probably familiar with the phrase ‘And now for something completely different’. As you probably know we’re in the midst of Q2 earnings season right now, and Jay The Executioner in collaboration with yours truly has been on the hunt for …

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Softs and Grains on the Move

April 21, 2016

  Big Moves in Markets No-One is Paying Attention to A lot of attention has been on equities and precious metals in the past week but the biggest movers right now are the softs [e.g. commodities like grains, oils, sugar, etc.).   We actually are in Kansas now, Dorothy! Photo via   I’m seeing …

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A Look at Market Volatility

April 15, 2016

  Volatility over the Long Term No matter if you are a hard nosed trader or a casual investor, every once in a while it’s advisable to detach yourself from the daily grind, sit back, grab a hot beverage, and parse through some long term charts. Although the don’t affect our daily entries here at …

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