website header 2

website header 2

Wednesday, March 29, 2017


“If only Spicolli ran the FED … how could it be worse?”

If only the country had bright, energetic, selfless public servants running the nation’s central bank; well, I can dream can’t I?

“Hmmm, 1252 and change … I seem to remember way back in the past all the way into yesterday afternoon when we were here … right before FED Pie Hole Fischer opened his cherry pie and set off the HFT algos in Yen & gold [was this planned or just a ‘coincidence’?] on a frenzied search for stops late in the gold trading session … and found some. And I said in jest yesterday afternoon, where can I now sell it and dig a deeper account hole … well, it appears pretty much anywhere actually, cuz here we are right back to 1252 - 1253 as if nothing had happened”.  Only thing that happened is of no consequence to the non trading public, who could care less if you got stopped out of your gold longs. For the FED manipulators, though, it’s “mission accomplished”.

 And so you sit here and wait … and wait … and wait some more, watching M1 candles with 11 cent ranges get put in and wonder where have all the traders gone? And really folks, they’re dead … shadows now … cuz yesterday afternoon, with Pie Hole Fischer just being the latest great manifestation of this “makes no sense” trading 101, gold goes on a short trip to “Nowheresville” as some HFT algos clean out sell stops that had been building all day; and after they are cleaned out, some backing and filling into the Asian open, where our favorite “can’t spit and hit the ground” Chuckleheads sell it right out of the gate for confirmation of a bottom, and you have the perfect recipe for where we are at right now; namely, right back to “square one” after a stop hunt attributed to Fischer, but in reality he was just “noise”, the “excuse” if you will of the “talking heads” on CNBC who have nothing better to do than become HFT shills and fill airtime.

And more than anything else, traders around the world in whatever market they are attempting to trade, see this “circus” of lies & deceit being played out over and over again, day after day, and are rapidly becoming “paralyzed” because they have no idea how to handle these type of events that infect financial markets today. As I said yesterday, it’s a new game of “musical chairs”, and when SHTF and either news breaks or some Pie Hole “yada yada’s”, you better be scrambling for a seat cuz the fat kids are right behind you waiting to crush you as the music stops! And when the dust settles … crickets; and if you were on the wrong side of the “yada yada”, you got almost no chance at making what you lost back, cuz there is nothing left but the “WTF happened?”, and of course … moar… crickets!

I don’t think any of this is by “chance”; it’s coordinated by the large trading banks [JPM, Squid, etc.] and the various central banks around the world led by the FED, and truth be told, they’ve all learned the hard way from the Japanese years earlier how to “bend” markets to their will and attempt to determine outcomes; and believe me, outside of making sure the top 0.01% of the elite rich keep on making money, their other top priority is to hurt retail specs … especially in gold, where the stop hunt “freight train” is ready, willing, and able to run right through your account … gold represents everything evil to a money printing central banker & his/her globalist, crony capitalist pals.

Here we are again, about an hour before the New York open with an HVALUE of $3.14, and very much looking like day 6 of “Dojiville” is in store for us; 2 FED Pie Holes speak today, one at 11:30 and one at 1 P.M. New York time … “go ahead punk, make my day”!

The good news of course, is that Mrs. Watanabe & pals sold the Asian open, so now look for their buy stops to be set off higher between 1255 -1260 sometime later today. Seriously, where do they get all the money they lose over time? And here at the New York open it’s …. Crickets … “Now back to our regularly scheduled coverage of YMCA Champions Tournament in Junior Women’s figure skating compulsory prelims from Norway” … [might as well, it’s got more going for it than gold at the moment.] And, for what’s it worth, we open and try to go higher and can’t … although I’m left wondering if the high at 1254.32 is high enough to take Mrs. Wantanabe & pals out from the Asian open … 60/40 says it’s probable.

Another hour, another new marginal high by a couple of pennies, taking the HVALUE to a mighty $4.16 … then the immediate smack down cuz there ain’t nothin’ up here but Mrs. Wantanabe’s buy stop … anybody see a pattern here besides me? And this is what happens when you are trading “inside” the $5 HVALUE for the day … reversals all over the place [statistically], new highs then maybe new lows then chop, spikes everywhere to nowhere, and you end up trading 27 times and got nothing to show for it except “thanks” from the brokerage house. I guess we have to wait until 11:30 & then 1 PM for the “Oracles of the Mariner Eccles Building” to impart their collective wisdom upon the uneducated and unenlightened masses so we know what to do, knowing of course that the HFT’s will get the info first and … well, you know the rest.

Sitting here watching this stuff aimlessly drift … I feel like I’m in high school detention waiting for the clock to run down to freedom … only this is worse. A little after a couple of hours into this “Clusterfest”, and gold has made a trip down to the 50% retracement line for the day, thus establishing its “bona fides” for another doji day on the potential horizon; this would be the 6th in a row, a feat I can’t find on the daily candlesticks going back as far as the MT4 will allow me, which is August 2010 where the price was … you guessed it … about 1250! It’s not that there weren’t time periods with doji’s, it’s there weren’t any time periods that were 1) 6 days in a row, and more importantly 2) the doji’s that did appear had much higher HVALUES & daily ranges; it’s one thing to have a small doji with a $4 HVALUE and a $7 range, but it’s quite another to have a doji that has a $13 HVALUE and a $17 range. The latter can be successfully traded, while the former must be left alone.

So, almost 7 years worth of data, and before that you’d have to go back to when gold traded sub 900 – 1,000 … back before the financial crisis of ’07 – ’08, when nobody was paying any attention to gold and the parameters for trading were different given the price level [threshold was $3 HVALUE when gold was sub 900]. Before 10 years ago, the market to trade was the e-mini SP500 futures contract [no CFD’s at that time], where you’d have absolutely marvelous HVALUES, daily ranges, and most importantly intraday volatility that would see the market trade back & forth 10 -25 index points during the day; that’s when the index WAS HALF WHAT IT IS NOW. “Thank you FED & other central banks for ruining this once splendid market, since you decided starting in 2011 to begin managing ‘outcomes’ for the financial elite and thus killing any volatility”.

By comparison, and to continue my analysis, before the turn of the new millennium, back in the 80’s & 90’s when gold was dead to the world for lack of any movement and prices were pretty much locked into the $250 - $450 range for 20 years, the threshold HVALUE was $1.50; but remember, this was during a time when there was no internet trading and everything was in a physical gold trading pit; things moved a lot slower back then, and most ranges for the day were $4 - $7, with an occasional day either above or below that level. On a percentage basis, things were wilder when the market was dead!

And so now, here we are in basically “uncharted” gold territory; it’s like we’re on a raft out in the middle of the Pacific Ocean and somebody says paddle to Hawaii; great, if I only knew which way to paddle cuz I got nothin’ to tell me which direction Hawaii is, let alone find it. We now have today, 6 small doji’s in a row [excluding Sunday]… something not seen in the modern era of gold trading … and while you would be hard pressed to go back on the daily candlestick and find 2 in a row that weren’t inside the week of a major Holiday, what do you now say to “Mr. Tail Risk” when 6 in a row show up? … “Yea, me neither”.

Cuz when you get right down to brass tacks, what we are witnessing right now this very day is as “earth shattering”, is as “mind numbing”, and finally is as “damaging” to trader’s psyche’s as the great stock market crash of October, 1987. You’re talkin’ two completely different “tail risk” and “black swan” events nobody but nobody saw coming. I sure as hell didn’t see this coming “implosion” in gold on the horizon; so from a completely objective “tail risk” point of view, and nothing more, they are both similar in their “shock” to me and fellow professionals I can assure you. EXIT QUESTION: “What do doctors do when seeing a brand new disease they’ve never seen or heard of before, and have no clue how to treat it and allow the patient to live”? SHORT ANSWER: “It starts with ‘WTF is this?’ and then works its way down from there; in other words, you begin to figure out how it can be defeated”.

Thing is, unless the whole market is just going to completely die and just sit here … an unlikely event as I can possibly think of at the moment given the state of the world… the only thing that defeats this “tail risk” is patience & discipline.

In so many ways, and in so many major markets, I feel like the world’s stability is hanging by a thread … a thread made possible by idiotic central planners that think they can either do away with the business cycle or can get rid of volatility through their financial derivative machinations; at some point … and we are closer rather than far away … this thread is gonna break, and when the world gets “reintroduced” to volatility, it will be eye watering to say the least. What can’t be sustained forever won’t be, no matter how much money they print or try and manipulate for their desired outcomes. So maybe … just maybe … what we are witnessing now in gold is the markets “eye” of this hurricane that is surely coming … and when the backside “eye wall” hits, look the hell out!

And so now, at 11:30 here in New York, a couple of FED Pie Holes just hitting the wires and saying maybe 4 more rate hikes in 2017 … “excuse me, wait … what”? … “anybody wanna buy some swampland in Haiti for development I got for sale”? And the markets “yawn”; been there done that seen that and most importantly heard that line of BS before, and right up there with Mr. Credibility himself Mr. “Peter Pan Kuroda” of the BOJ, nobody believes the FED Pie Holes or are willing to bet money on this steaming pile of garbage known as “guidance”.

Gold for its part, along with every other major market, laughing itself silly with this “song & dance” rate hike routine we saw repeatedly throughout 2016; “you’ve raised rates 3 times in 11 years, and now in the next 9 months we’re gonna get 4 rate hikes? Yea, sure … Ok … whatever. How come the Dollar isn’t going higher and gold lower on this ‘breaking’ news”?

Well folks, even the crickets are complaining that there are too damn many crickets; and if it wasn’t for the 5 preceding days before it, I might call this the worst trading day evahhhh in the MT4 era. All of you reading this [I would bet] only thought “tail risk” could come from the “wild” side of the probability equation; remember, there are 2 sides to every probabilistic event.

And just when you think the “comedy gold” hits are finished, along comes a straight up 10 minute $2 blitz to a new high for the day to … wait for it … “oh Mrs. Watanabe, why’d you leave that buy stop in there just above the old high”? … and of course, like the sun setting in the West, there is “ZERO” follow through buying and we head immediately lower by about $2 before recovering a few pennies… “again, anybody here but me see a pattern when you buy/sell breakouts”? Hang on while I stop shaking from the excitement of seeing the HVALUE balloon to $4.51 from $4.16 on that blitz less than an hour from the close. And why shouldn’t the market hit a new high; after all, chumps sold the “FED Pie Hole” rate hike hoax 2 hours ago [cuz rate hikes are “bad” for gold] and have been patiently waiting for this stuff to fall, which it hasn’t at all and now are being forced to cover. Why cover with a very small loss when you can put your stop just above the old high and take a larger loss when the bullion dealers go hunting for you, which if you’ve been trading for more than 5 minutes in your life you know without a doubt they will do cuz they need your buy stop to get out of what they sold you 2 hours ago; per chance, do you own a shirt with a red circle painted on the back?

What the last 6 days has shown you, is that EVENTUALLY EVERY SYSTEM, TRADING METHOD, OR ALGORITHM HAS TO WORK! Even if its premise is the most screwed up, twisted, and illogical piece of work a central banker could come up with; eventually it has to work, cuz if it didn’t that would mean there are “guarantees” in trading, and as we all know that does not exist. So, at some point in history, this [now] has to happen … the trick is to “sidestep” it and not fight it; fighting any market has the distinct tendency to take all of your chips away and forcing you to go “buh-bye”.

“Alex, I’ll take ‘Stupid Poo Poo’ for $1,000 please; what is trading inside the $5 HVALUE”? Comex close now at 2:30 EDST; not much more to say or do in regards to this crap, except see if the record books can be extended to 7 doji days in a row since the dawn of the electronic trading era [regardless of what the daily chart looks like at 8 PM when the market closes for the day, we’ve just been through 6 consecutive non Holiday trading days where trading action collectively was/is the worst I have ever seen, each day getting successively worse than the previous one]. In any event, I’ll be here when it moves; we keep our “powder” dry and wait for our opportunities.

PAMM/MAM Spreadsheet directly below.

Beach beckons … I’m outta here … until tomorrow.

Have a great day everybody!

No comments:

Post a Comment