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Friday, May 5, 2017

CARNAGE

“Captain Yellen says we’re ALMOST ready for takeoff!”

Words, in some parts of the world and with most people, still have meaning; and when reality collides with delusion, people will react most aggressively with the one thing near & dear to their heart … money!

In case you haven’t noticed, the commodity sector worldwide is collapsing; gold, silver, copper, lumber, grains, iron ore, & crude oil to name the biggies, have been unmercifully monkey hammered lower these last days; why? Two reasons really; 1) China demand for anything has collapsed, and with it the need for raw materials, and 2) a U.S. Fed that scares people with money cuz they are delusional Apparatchiks for the banker elite; anybody with half a functioning brain can see it, knows it, and now they are reacting to it.

The carnage du jour for this Friday is crude oil, having fallen over $1 per bbl. in less than a minute last night in the “wee hours” [and taking briefly U.S. stock indices lower before the Plunge Protection Team showed up and basically said, “umm no, I don’t think so”.] on heavy volume and shaking other markets in the process. You can thank tanking credit, over supply from the U.S., OPEC cheating [“Quick … see my shocked face”!], and China “unwinds” of positions. But you can also thank the FED; somebody sees the words, looks at reality, and then comes to the conclusion, “hey, you know what? I’d better liquidate now and take my medicine cuz it’s clear the FED has no clue what’s going on, and just like the financial crisis in ’08, when they assured everybody everything was “just fine & dandy” with housing, and FUBAR’ed that into a full blown mess, this time is going to be worse … much worse. They are so out of touch and behind the curve it’s frightening … I’m taking my losses now cuz HE WHO PANICS FIRST GETS TO PANIC AGAIN LATER”! And so it goes, being played out in a market near you on a daily basis.

And of course, the dirty little open secret is that … eventually … yes, eventually … this stuff comes for stocks; only this time around the bubble is 10X higher and deeper than the last time cuz you Twits foisted QE on everybody’s ass. Add to that the trillions in ETF’s and index funds, which once they get under water by more than 10% on a collective mass scale, will see redemptions heretofore unseen in modern financial history, and you’re gonna be the “Good Ship Lollipop” out in a class 5 hurricane wondering how to stay alive. When that day comes, your Plunge Protection Team won’t be able to stop the trillions in selling from both the retail public & institutions. Now we’re talkin’ carnage!

From a trading standpoint, the key to survive an Armageddon style selloff, is one thing and one thing only; do not attempt to buy “dips” after 2 P.M. EST or EDST under any circumstances. The early hours of trading, that is the first 4 ½ hours from 9:30 A.M. to 2:00 P.M., “turn arounds” off of a bottom can be bought … whether or not it’s good to hold or you have to treat it as a scalp depends on the situation and how severe the break is … but at some point the market will attempt to rally on at least some sort of short covering. However, you get into the late afternoon, and prices start going lower once again, and you have to “let it go”, cuz there isn’t enough time for a rally where buyers can make any money or see some kind of technical evidence of a bottom; the sellers are in control, and it is the longs who are trapped into the close. When this happens, the selling can be very intense in the last half hour, and has the potential to be cataclysmic in proportions [hello 1987 crash!].

Turning to today’s market … NFP at 8:30 … what happens if it’s a “bad number”? Consensus is for 185K jobs to be added, but what if it’s sub 125K or even lower? Does that mean everything is still awesome Janet? Even at 200+K, we got every “hard & soft” economic indicator known to man going south, so natch, let’s raise rates some more cuz 199K more jobs were added to the bartenders industry.

Ok, NFP slightly over consensus … big whoop … markets reaction a hiccup and nothing more … like I said yesterday, with the dealers order books having been wiped clean on both sides from the ± 150 roller coaster the last couple of days, who exactly is going to be “throwing in the towel” on the release of this fairy tale number? Exactly!

And, via ZH, I see at long last Gartman got long and then proceeded to get stopped out rather unceremoniously; claims his worst 2 day stretch in 2017, but hey it’s early yet so plenty of time to see it go lower still … well, at least you’re still long that ball bearing company stock. “Wait … what”?

A half hour into this and I just emailed President Trump to ask him to close the NYSE until June 1; “hey, it’s simply a scant 25 days, and what’s the point anyway? Market can’t go up & market can’t go down; FED says everything is awesome while markets everywhere are crashing, except stocks which by law must go higher but somehow aren’t which has me concerned. So, maybe you should just shut r down”. I can only imagine what this crap looks like midday when people have either given up and headed home, or simply given up hope and started to read Vampire Squid’s recent crude oil Long recommendation from $51; “psst; it went to the $43 handle briefly overnight but don’t worry cuz this has to absolutely be the bottom of the bottom so buy more”! Remember, these are the guys who are calling the shots inside President Trump’s Treasury Dept.; “what could possibly go wrong”?

“Oh wait … this just in … France is gonna save the world again this weekend with the election of Mr. Milksop Macron … imminent 200 point rally in the Dow30 Sunday night as the world heaves a heavy sigh of relief that more globalist banker policies, more socialism, and of course more unchecked MENA immigration into France to kill the locals all gets back to normal”. Enjoy your croissants as the cockroaches that invade your country eventually come after you; maybe you can tell them it’s not right to invade your “safe space”. This guy Macron, is very much like Obama was; a complete “empty suit” run by the globalists for the globalists. He looks good, dresses good, has a nice appearance, talks smooth, and says “bullshit” as good as anybody, if only someone could  remember what it was he actually said that made any sense. “Oh yea, this will end well … what’s the over/under for civil war in France? Three years, maybe 4 tops? And by all means, keep buying the CAC40 … those shares will be worth plenty more on the Sharia exchange in the near future”.

Looking a little deeper into the fairy tale numbers released today, take notice that 1) “hospitality & leisure” (a/k/a maids at Motel 6 & lifeguards) added 55,000 jobs, 2) “food service” (a/k/a bartenders & waitresses) added 26,000 jobs, 3) “services to buildings & dwellings” (a/k/a doormen & janitors) added 10,000 jobs, 4) “retail” (a/k/a the babe at the mall serving Sbaro pizza) added 6,000 jobs, 5) “Business services & Temp” (a/k/a as secretaries) added 28,000 jobs, 6) “Temp help services & Other” (a/k/a please mow my lawn) added 11,000 jobs, and last but certainly not least 7) “government” (a/k/a people who get a check but don’t do shit) added 27,000 jobs. Add it all up and the total number of complete bullshit jobs = 163,000 out of the supposed 211,000 created last month. That leaves a whopping 48,000 real jobs [maybe, we don’t really know], which doesn’t even come close to supporting new people coming into the workplace every month. Oh yea, we’re hittin’ on all cylinders aren’t we? Meanwhile, rate hike odds for June went up to 90% for an additional ¼ point hike in the Fed Funds rate … “you know, cuz we’re doin’ so well after all! And you want me to believe these Twits at the FED are data dependent”?

There simply is no greater source of Libtard hypocrisy on display than those who will applaud these “fairy tale” job numbers; the Simpletons of the “status quo”, who think in their smugness that it’s somehow Ok for you to have 2 jobs, one as a janitor at the Junior High and then at night as a bartender at Applebee’s. It’s Ok, cuz we must allow foreigners a chance, and besides, you tend to vote Republican anyway and the immigrant horde with benefits you can’t get or enjoy will vote “the correct way”. However, markets move cuz people vote with their wallets, and I don’t think these numbers should make anybody feel really good about where we are at.

A quick check of the market here at 1 ½ hours into this mess, and it’s … crickets. “A little song, a little dance, a little seltzer down your pants”. But hey, don’t you worry cuz Milksop Macron is gonna save us again Sunday night; “if these people were in charge 75 years ago, the people of France would be speaking German today”.

Meanwhile, back in the stock indices, 2 attempts to break have failed. Now we sit at the open meandering back & forth, nobody a clue what happens next on like the “nth” doji day in a row for the Dow 30. If I had asked you 7 market days ago what the odds are of the Dow30 closing each day within a few points of each other would be, I’m guessing most of you would have said less than 1%; I know I would have. “Well, here we are folks”!

It’s Noon in New York, and I’m betting there are more than a few traders having gin & tonics for lunch; since the open, the SP500 hasn’t even achieved a 4 index point move from top to bottom. Quite frankly, I think the market is being propped up from corporate buybacks of their stock, and nobody wants to be the one to hit those bids; I simply don’t know what event has to transpire to get this stuff to correct some. Outside of North Korea, who I don’t think has a “death wish”, what’s it gonna be? Total collapse of oil [again]? Italy goes under? What?

Here in the P.M. in New York, just your “run-of-the-mill” ± 8% [value of the entire price of a barrel of oil] range for the day; and I got to ask, “is the FED or the Plunge Protection Team buying oil futures contracts on panic down moves to prop up the market; specifically so as not to upset the proverbial apple cart in stocks like Chevron & Exxon Mobil that make up the Dow30 & SP500 and might lead to a potential melt down in equities”? Nothing would surprise me if it were true, cuz central planners gotta plan don’tchaknow?

And if you think any other market is trading better, I got new for you; it ain’t. Gold since the NY open in a $2.50 range; USDJPY about a 23 PIP range, and the list goes on; in other words, it’s dead everywhere.

New high for the day in the Dow30 just before 2; no matter what happens next today, this is without a doubt ONE OF the worst trading action days I have ever seen for a non Holiday, and I’ve been trading for a very, very long time; I don’t know what you call this, but it’s not trading.

With gaps all over the place in both the SP500 and the Dow30, the buy stops are once again getting hit off as we move slightly higher; that 15 point gap up in 2 seconds @18:49 server time a real thing of beauty; of course followed by a move straight down to where it started 5 minutes later. Only one real “macro” set up today, and it came late in the day, not off of a low turn, but right up near the top in what was going to be either A) a double top that would see price back off, or B) an explosion through the high on the SP500 shooting through 2400. The trade I made directly below.
 





As you can see, it didn’t go through 2400, and I subsequently liquidated a tick higher … big whoop; it’s the only trade of the day that made “macro” sense, cuz if it had gone through the shorts would be in big trouble going into the close on a Friday … and most likely would have produced a close on or very near the high of the day. We still got a half hour to go, and anything can still happen, but for my money that was the chance the market had and it didn’t do it.

Maybe it’s just me, but the Dow30 up here [20960 – 21120 area] feels like a lead weight tied around my ankles and somebody just threw me into the pool; it feels heavy and it acts heavy. And while I don’t get up in the morning to make change for a Dollar, I’m not real excited about 1) getting caught up in chop, and/or 2) losing money making dumb trades. Like I said, the one trade I made today was the only one that made sense; first from the “macro” side, and then waiting for a couple of downticks to buy from the “micro” side; only problem was Mr. Market said, “not today, come back next week, OK”? What else you going to do since the entire day up to 2 P.M. was ± 25 points? … and then the rip up with absolutely no backing off to the high, where that’s pretty much it for the day … and if by chance you got caught short in that move up, you get to experience what I’ve said all along, which is “there isn’t any movement left to make whatever you lost back … it’s a singular binary event … and so the market goes into hibernation just at the time you need it to show some volatility for you to make back any loss … and guess what? … it ain’t happening and hasn’t happened in the last 8 market trading days”. Well, as long as we are dealing in singularities, it makes my “macro” approach to today’s trade make even more sense.

Hopefully, next week has better trading action; I don’t see how it can be any worse than the crap the markets dealt out this week. Here right before the close, SP500 breaks 2400 and looks to close at record high, while the Dow30 can’t do Mr. Jack Squat; must be all the French Fry accounts buying cuz Macron is gonna save the world again on Sunday. And if you believe that, I got some great Haitian industrial swamp land to sell you … “cheap”!

PAMM/MAM spreadsheet directly below.
 




Time to hit the beach … I’m outta here … until Monday.

Have a great weekend everybody!
-vegas
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