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Wednesday, August 17, 2016

WAIT … WHAT??



TRADING PRODUCTIVITY

It would be soooo easy for me to be pissed today; I mean … well, I had it all planned out … day before the FED minutes will be slow, so a perfect day to travel and get some personal stuff taken care of, and then be back home before bed time so I can sleep in today as we all “hurry up & wait” for the “Oracles in the Eccles Building” at the clueless, credentialed but not educated, duffuss Ivy League moronic Twits at the FED to do their schtick today at 2 P.M Eastern time. “Hey, this 2 PM crap is cuttin’ into my beach time & I ain’t likin’ it one damn bit!”

And then right as I’m leaving, one of the Pie Holes at the FED opens his and all hell breaks loose because he intimated that a September rate might … just maybe might … be on the table next time. “Sure, and I got some swampland in Florida you can get cheap and develop, OK?”

So, it’s easy pickin’s for the staff as gold immediately plummets to the exhaustion lines a couple of times and then stages a nice $8-$9 buck rally which they sell to liquidate. “Hey, you guys are buyin’ lunch the rest of the week!”

Looking at yesterday’s action when I got back got me to focus on 2 important criteria that I want to share today; one political and the other trading based. First, to the business of news and the way it is reported to the financial public by the hapless twits at the FED.

PUBLIC NOTICE:
 

I take nothing any of these FED members [or their sycophants at CNBC, Bloomberg, IBD, or the WSJ] say seriously; it’s all bullshit, and the never-ending stream of comments, often contradictory from one day to the next, is to not to rationally inform but is meant to “manage expectations” in world equity markets so they don’t get too “frothy”. So, a little up and then a little down… rate hike on the table, rate hike off the table … all is good … no “bubbles” [so they think], and let’s just keep stock prices for the 0.01% stable, shall we?

Make no mistake, the FED’s mandate isn’t to set monetary policy anymore and create monetary conditions for a healthy, growing economy; if you actually think that, I’m sorry but you are delusional. They haven’t the slightest clue WTF they are doing, and if you can stay awake when one of them talks, 1) congratulations on listening to babble that makes no sense to anybody and remember you can’t get that 15 minutes of your life back, and 2) their “blah blah, yada yada” isn’t meant for you, it’s meant for the financial elite who desperately need stock portfolios to remain steady to slightly higher, all the while they kill intraday volatility to “take fear” out of the marketplace. Except, of course, they can’t over the long run and shit eventually blows up in their face.

So, when I see what happened yesterday in gold, taken in regards to what I just said, my first reaction is to want to “back the truck up and get a forklift to load my long positions”. Of course, I don’t because I am a disciplined trader looking for the algo signal to guide me here with modest leverage.

All of this leads me to my second point and begs the question, “Is it OK to sometimes double up on a position?” Short answer: Yes, but with tight rules and restrictions. For example, if you bought gold yesterday on the way down at @ 1345, and it’s still going slightly lower but losing some of that downside momentum from earlier, where is a good place to buy more? You don’t want to use your “bullets” [aka money] to soon or too close to your original fill, but generally in gold about $3 - $4 away tops from your original buy, and if that level gets breached by more than a buck to a buck fifty, you got to bail on both and start over.

Now, and this is important to understand, I save this option for “news events” kind of days; this isn’t something I recommend you do on a daily basis. In the particular case of yesterday, you got a FED Pie Hole doing his damnedest to prevent the SP500 from going over 2200, and at the same time gold gets pounded because of the “fear” of higher rates. Well, there isn’t a snowballs chance in hell the FED is going to raise rates any time soon with the rest of the world slashing rates into negative territory as the world economy goes into “hyper shit drive” down a rat hole, despite what President Empty Suit says.

So, to me at least, this kind of sell off in gold isn’t going anywhere, and I definitely want to buy the algo signals. One more important thing to mention; the vast majority of the time when gold goes down by more than $10 from any starting point, before the market can rally and trap shorts with any kind of effectiveness, usually the market puts in some kind of “double bottom” on the M1 candlestick charts, and then proceeds to take off on the upside. Keep this in mind and look for it, you won’t be disappointed.

I’ll be posting before the FED minutes,  and looking at the morning’s action all I see is a bucket of warm spit; not really anything I want to get close to or trade before ChairSatan Yellen & Crew release their musings like the Oracle at Delphi did for the ancient Spartans of Greece before they went into battle. [How’d that last one turn out?] So, we sit and “hurry up & wait” like every other trading desk. Until tomorrow …

Have a great day everybody!
-vegas

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