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Monday, April 3, 2017


“Trading gold? Then you just might be right here!”

Ninth day in a row neither Asia or Europe put in an HVALUE of more than $5 overnight; truth be told, I don’t think anybody in Asia or Europe has any conviction whatsoever about entering any trade, long or short,  given the amounts of money they have lost over the last 4 months. The “talking heads” will point out that the head ChiComm Comrade will be with President Trump this week for meetings and markets are awaiting details, along with more worthless Fed minutes and more “blah blah yada yada” and the NFP on Friday, and the list goes endlessly on “ad infinitum nauseum” into the sunset, like it’s gonna make a difference somehow “this time”; “oh yea, how many times in the past have we heard tripe like this? Cuz when it’s over markets move for 30 seconds and then … crickets again … and yet I’m supposed to believe there’s gonna be some ‘big’ announcement coming that could shake markets? Yea, sure … whatever”.

Let’s face facts shall we: big moneyed traders around the world are completely f-ing paralyzed, wondering what hour, minute, & second they get caught up in some insane market moving hyper-frenzied zeitgeist caused by either a Pol and/or some central banker apparatchik trying mightily to feed his mistress, when either of them open their Pie Holes to intentionally move a designated market on their “hit list” to a preferential & preferred outcome. EXIT QUESTION: “How can you blame them”?

And so, here we sit yet again on a Monday, firmly entrenched inside “chop” for the 9th day in a row, and more and more of what I said on Friday is becoming reality; namely, that beautiful creature known as volatility has gone the way of your ex from high school, who in her day was totally, insanely hot, but now years later after 5 kids and 90 pounds looks like Tony Soprano with a blonde wig, says “oh my, you look the same as you did when we were seniors … woof!”, and you’re thinkin’ [but not sayin’], “OMG! WTF happened to you”? Yea, that’s volatility now, and if you don’t get your mind right, it will hurt you.
Here at the New York open, we’re right on the 50% retracement line with an HVALUE of $3.68; “and to think, I could have answered that ad in the ‘Weekly Nickel’ for a groomer for the bearded lady at the circus … but no, the Mrs. nixed it cuz she didn’t want to live in a gypsy caravan … gads, some people are so selfish”.

Oh … wait, I forgot, how stupid of me not to remember these “key” events for the week, which is the “official talking heads” manifesto being put out this morning, no doubt with the compulsory “wink & nod” from the chicken dinner club at the Eccles building in D.C., to keep trader sheeple pacified & numbed until at which time they get the “go ahead” for anything to move; and believe me, JPM, Vampire Squid, Blackstone, Virtu, & Citadel will be the first to know and then act; “hey, where’s MY email”?

An hour and a half into this clusterfark, and we got “doji’s everywhere across the spectrum; USDJPY, gold, SP500 … “why, I even see ‘grade A’ dirt futures are unchanged … what’s the trading world turning into?… I don’t even know how to describe this it’s so bad … and now back to HGTV where I can spend productive time watching reruns of ‘Property Brothers’ until it’s time to feed ‘you know who’ some bacon from the impenetrable bacon box in the kitchen … oh yea, he’s sittin’ here at the ready, just waitin’ for me to flinch an inch towards the kitchen so he can go ‘full metal bacon jacket’ on me”.

Oh my, this just in from the gold morgue … “soft” PMI at 10 means they found a pulse from some folks buying gold, cuz I guess that means those 4 rate hikes aren’t happening the rest of the year? And this is news somehow for which class of clueless market twit that seriously thinks the FED has an ounce of credibility left?

Those of you who have been reading my posts for any length of time, know of the phenomena of the Asian “Chuckleheads”; well, last night no exception as they sold it off from the high in hour 1 to almost the low in hour 7 about $5 lower. Europe tests the low and we’ve been up ever since; and we all know that when Asia sells gold lower New York will take it higher, and when Asia bids it higher, the bullion banks in New York will take it lower. “For all of the days/weeks/months, and in some cases years you’ve been following my posts, have there been ANY days you know of where this isn’t the case? Any … any at all”? SHORT ANSWER: “NO”!

After crunching reams of data over the weekend, it became obvious to me that at the start of every day, we need to establish 2 horizontal lines on the gold M1 candlestick; 1) daily range 50% retracement line for first 12 hours of the day [white], and 2) opening bid price at 8 A.M. in New York for the start of the day [Aqua]. THE HVALUE IS OUT!

All that matters are the M1 candlestick formation signals which we already have, and these 2 lines. What we are specifically looking at in terms of importance are ± $2 from the aqua line [New York open]; if it’s + $2 from the open we are in buy mode on M1 buy signals; if it’s -$2 we are in sell mode on M1 sell signals; our most powerful signals will come when both lines are either above or below market price.

And given the fact that only about 1 out of 500 days does New York join Asia in some kind of euphoric romp in one direction, this New York open at 8 A.M. EDST becomes a very important “line in the sand”. Cuz whenever New York goes ± $2 from its open, there’s not a very high probability it’s going to turn around and go the other way. And more importantly, it plays right into the hands of what we know about the Asian session anyway … “they’re damn near wrong almost every frickin’ day”!

Earlier today, I gave it a whirl, and if not for the fact that the Turnkey LP filled us 40 cents per Oz. off the market on liquidation as the market was GOING UP, AND the fact the LP shut the gold feed off on the correction from the high at the turn where we had a signal to buy with an engulfing pattern, it would have worked beautifully! As it is, we get a few pathetic pennies in profit, but no matter, the information is worth 10X that from the trading action. Directly below the trade, followed by the signal we missed due to the MT4 feed being shut off.


If you sit down and spend some serious time thinking about it [which I’ve already done so you don’t have to], there are 2 critical points to take away from the changes in the algorithm; 1) we play into the “wrongness” of Asia by allowing our signals to “be in play” only $2 from the open in New York, thereby allowing us to be there on the off chance they do go in tandem during the day, but also giving us an earlier jump on what’s going on from a price standpoint when Asia gets faded like it does almost every day, and 2) in this low volatility environment we find ourselves in, where I’m predicting right now daily ranges for the most part will be between $8 - $12 about 95% of the time going forward into the future, we simply can’t afford the luxury of waiting for days that aren’t coming so we can capture the last few bucks of a $15 - $22 per Oz. move after the $5 HVALUE has been achieved. If they come … GREAT … but I don’t see it happening anytime soon like in the past … I’d love to be wrong on this, but I don’t think I am.

Today is a great example of this; daily range so far here at about 1 PM New York time with 90 minutes to the close is $9.25, with an HVALUE of $5.57. Ok, since the time the market hit that $5 threshold, the market gave us a whopping 57 cents to play with, and right now as I look, it’s a little over $1 off its high for the day. So, any trade signal you would have received, at best is a scratch or a loss as the market limps its way to the Comex close.

On the other hand, the New York open was at 1246.68 bid at 8 A.M. [12:00 Turnkey server time]; that puts the aqua line at 1246.68 with buy signals above 1248.68 or sells on signals below 1244.68, whichever is appropriate. In the case of today it is 1248.68. The 50% retracement line at the open isn’t important; that comes into play after you establish a position off of the aqua line & the M1 signals. Remember, gold does not reverse that often, and even rarer than that are double or triple reversals over $5 in scope, hitting a new high and/or low along the way. So, we give up the reversal, and concentrate our efforts on being LONG when gold is above the $2 aqua line at the open, and SHORT when gold is below the $2 aqua line at the open. Under no circumstances do I want to be short gold when it is HIGHER THAN THE NEW YORK OPEN, or long when it is LOWER THAN THE NEW YORK OPEN. What that means in the case of today, are potential market buy signals a full $5 sooner than otherwise would be the case with simply the HVALUE; I consider that significant, especially in light of the approximate $9 daily range!

What we are looking at is simply a minor revision to the version 3 volatility algorithm; this is now the version 3.1 volatility algorithm, where I have lowered volatility “expectations” and taken the Chuckleheads in Asia into the mix and simply said, “well hell, the bullion dealers are taking advantage of them, and I want to be on the bullion dealers side, so sure sign me up … I’ll be more than happy to incorporate this important piece of the gold market’s structure into my algorithm”. And really, looking at the cold, hard logic of the trade, we’ll still do well when that “blue moon” event comes when they both coincide and go in the same direction, cuz the ± $2 is the threshold from the New York open, NOT the fact that Asia is almost always wrong! [Although, it’s nice to know we can make money fading Mrs. Wantanabe & her gal pals.]

Here right before the Comex close [market catching a light bid due to weakness in USDJPY], under normal circumstances I’d be pissed at what transpired today, but I’m taking a more “holistic” approach and looking at the bigger picture; and that bigger picture gives me a very clear snapshot going forward of how to proceed and not only make money, but thrive. On average, today was/is like every other medium to slow trading day we’ve seen in gold since anytime last year, with a couple of small runs and then when Europe closes, trading dwindles down to almost nothing by the Comex close; so, my point is, that if it worked today [and it did] it will work well into the future with few exceptions. “That’s something to celebrate & worth far more than a simple winning trade from one day”! And if … “IF”… gold perks up and we start getting $20+ ranges consistently again in the future, these new algorithm guidelines will only help us improve profits; in other words, there is no downside to adopting them.

During the week I’ll be updating the gold algorithm manual and tutorial and changing the PDF docs to the version 3.1 volatility algorithm; I should have them ready by the end of the week going into next week on Sunday night.

PAMM/MAM Spreadsheet directly below.

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

Have a great weekend everybody!

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