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Wednesday, September 14, 2016

ALEX, I’LL TAKE IDIOCY FOR $200 PLEASE

“What is trading market moving reports!”


Ahh, you just can’t beat a good ‘ole crude oil inventories report during market hours to “shake things up” a little; or maybe a lot. Truth is, this report every Wednesday morning at 10:30 Big Apple time moves stock indices, which moves gold, and causes numerous cases of heartburn, indigestion, and most importantly loss of money around the globe. “Hell, it’s so early in the day, Her Royal Highness Cankles Clinton hasn’t even had her first seizure of the day yet, and already huge sums of money are lost!”
What I was looking for coming into today for a higher gold price should be obvious to you; namely, 1) a lower price in Asia [can these guys ever do anything right?], 2) a false move down early in the U.S. session that is rapidly turned around, and 3) a daily white horizontal line that is below the market price so I can get long on the plum line slope change. Easy Peezee if you simply wait for it and today we got it. Directly below is the trade.


After that, there were some other algo trades, which if you took them, you made money, but I didn’t because I don’t think gold has that much on the upside from the new high before it hits the “bullion wall” from commercials yet again.
Over in oil, it was/is … well … nothing short of a total clusterfuck, what with the weekly inventories destroying every buy/sell stop in sight within the span of about 90 minutes. As I said in the manual, leave this report alone unless you need tax losses for the year.
Further complicating trading over the next 5 business days are 2 factors; 1) Fed “blackout” period for Pie Holes giving chicken dinner speeches is in effect, thus depriving the HFT’s in every market the chance to front run prepared speech remarks they get early for a basket full of cash, and 2) the BOJ is floating practically every “trial balloon” known to man before their meeting next week of Kuroda & Crew, and they haven’t the slightest clue what to do, but don’t worry, they’ll be sure and do something that redefines the phrase “stupid shit”.
What could really throw a “monkey wrench” into things is a breakdown in the SP500 below critical 2100 support in the days ahead. Selling could really intensify from 2 sources; 1) risk parity funds, and 2) options traders that need to sell because of “gamma” exposure. If this seems a little “esoteric” to you, just realize that “selling begets more selling” forcing those who have downside exposure to losses to sell whether they want to or not; it’s not a pretty picture.
Of course, none of this would be a problem if it weren’t for the fact that Central Banks around the world are pumping hundreds of billions of dollars a MONTH into financial assets, and still their policies aren’t worth a damn and haven’t produced the desired “outcome”. Solution? Why more of the same! Because nothing says fucking morons better than doing the same stupid shit over and over again and expecting a different outcome.
The problem for gold, is that nobody really knows what the reaction is going to be in the market when the clueless Twits at the Fed & BOJ get together and “alchemy” themselves into another corner come 9/21; if we really want to see higher gold prices, then the commercials have to have an “out” first, and that “out” is a break below 1300 on a manipulated waterfall where 2 things of critical importance will take place; 1) every long in the books will have been stopped out from Brexit, so retail specs are screwed once again, and 2) commercials can buy at or near the bottom covering shorts and making massive profits.
Too be sure, I’m not as concerned about the absolute price level of 1300 as I am about “the action”; in order to go higher it almost certainly has to happen like this.
The day after Labor Day notwithstanding, daily ranges have dropped significantly; from $15 - $23 to now around $9 -$12; what this tells me is that the trade is uncertain about price and unwilling to make position commitments ahead of the Fed. Why would anybody make big bets [unless you are a certified bullion bank and get inside Fed information] ahead of a decision, where every 2 or 3 days for the last 2 months some Fed Pie Hole has a different take on rate hikes.
Do you wonder why large hedge funds have been forced out of business in record numbers the last couple of years or why FX trading is down 30% over the last 2 years? Well, you don’t have to look very far other than a Fed that “changed the rules” of the game and didn’t let other players know about it; throw in Kuroda & Crew from hapless Japan, and there is almost no way you can make money positioning anything before you get whipsawed by these clowns.
And so, given what I just said above, what we should be seeing in gold is more “whippy” price action, almost like what we see in crude oil. But we don’t do we? Why not?
What makes most sense to me is that the “bullion wall” of selling is there because the bullion banks know what is coming 9/21; I don’t have any doubts they get preferential treatment from inside the Fed and the BOJ. “Hey, mistresses have needs too OK?” And without any semblance of a rally being seen the last week, except for today’s small few bucks, how do the bullion banks exit this? Well, they do it by being on the other side of a manipulated waterfall that is coming; and boy is this market ever due for one since Brexit!
Now, I could be totally wrong here, and maybe gold takes off to the upside before the Fed meeting on massive short covering and new buying; fine, I’ll follow the algo and still make money [like today], but I don’t see things playing out like that, and the market action, at least to me is one where the sellers are very much in control of the market right now with no indication that it’s going to change.
Have a great day everybody!
-vegas

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