website header 2

website header 2

Wednesday, June 7, 2017


“Please, take a seat in the stock indices waiting room!”

I guess we are all supposed to be impressed with the ECB sweeping a failed Spanish bank under the rug, and now pretending everything is “Okey Dokey”? What a bat guano show that turned out to be, but you must remember, nothing can interfere with “stocks must never be allowed to go down” mantra, especially the indices. That should explain everything you need to know in order not to go insane from the negative headlines screaming out of Europe this morning.

So, funny thing happened on the way to a slow day in anticipation of tomorrow’s three ring circus known as Comey, ECB, & the UK election; and that “funny thing” is the failure of Banco Popular, a Spanish bank drowning in bad real estate loans and other various debt they can’t get out from under. So, along comes Santander, and buys the whole enchilada for exactly 1 € [euro], minus the debt and liabilities of course, and everybody at the ECB is in “happy face” mode. “Nothing to see here Sheeple … move along now … only rich bondholders and equity owners got wiped out, not ordinary folks, so everything is fine now … OK”? Maybe the feckless, elite Twits at the Mariner Eccles building in D.C. can explain the word “transitory” to all the people who lost money “investing” in Banco Popular … you know, give ‘em the faculty lounge “spin” about how “shit happens” and it’s “unfortunate” and then look at ‘em in the face and say, “but see, Everything is F-ing Awesome Baby!, and now things are OK … right”? And then, get ready for the violence to commence.

If it weren’t for the extensive and blatant manipulations of the central banks, which in today’s market environment they don’t even bother to hide what they are doing any longer, stock indices “yawn” at the failure and then a few minutes after the open it’s back to business as usual; which is of course, large unlimited bids underneath key stock index components, which means we either drift higher or sit doing nothing, cuz we ain’t going down sharply on the bad news out of Europe. Maybe the bids get pulled, who knows, cuz it’s very hard to impossible to know what the manipulators are thinking when profit is not their goal like ours is.

Turning to today’s market … “Nothing says buy stocks more than bank failures … right? Hell, I’m in the mood to buy anything/everything cuz everything is soooooooooo F-ing awesome I can hardly stand it. And all of this should give you preview enough of what to expect tomorrow, cuz no matter what EX- Federal Bureau of Incompetents Chief Assclown James Comey says, no matter what Super Mario says at the ECB presser, and no matter how the U.K. election turns out, it will be spun as “UBER BULLISH” for stocks; new “record-er-er highs in everything on the Friday close. Damn, it must feel good to be a gansta”!

In reality, the one thing the central banks don’t want to do is see their bids hit; they’ll pull them and adjust them lower cuz they don’t want to feel like they are being “ganged up on” if large hedge funds & other assorted institutions start to put some ‘chink” in the armor of invincibility they think they command. So, it’s not that prices can’t go lower, it’s that they will go lower unlike anything we have been used to in the past. There will be small spikes down followed by congestion … rinse & repeat, until the institutions back off, the bids return and everybody who is short gets squeezed once again on the way to higher prices.

From a buying perspective, today’s action in the Dow30 since the New York open @ 9:30 is not very strong; from a “setup” standpoint, coming out of the box and going to a new high … then going straight down to near the low, is not a good setup for prices later in the day … what this market needs to see, and hasn’t in a good long while is a lower open, followed by prices going lower on sell stops in a 2 or 3 legs lower environment, then a rally to new highs later in the day. We haven’t seen this for a while simply because the first leg lower out of the open has been aggressively bought … now though, with a higher open and the potential for some volatile trading tomorrow, we could possibly get the sell stop waterfall to below 21100 … we will see.

So, let’s take a look so far to what has happened in today’s “hurry up & wait” exercise for tomorrow’s big show; open … rally to new high … pull bids and go to new low … put bids back in and rally off low … pull bids again and sell off some … and please notice, that when the market hit a new low it was purely taking out some sell stops … cuz there wasn’t a thing behind it but more bids getting put backed into the market. So, while we may go slightly down some, nobody at central planner HQ is going to let the market have its way with prices on the downside. And once again, we see totally nothing going on with M1 ranges of 1 & 2 points … and then the central bank bids get readjusted and … Boom! … +10-15 points up faster than you can even think, “WTF was that”? And so it goes in the new central bank trading paradigm we find ourselves in from now until Jesus comes back. Oyy.

For those of you needing further evidence, simply scroll back on the M1 to earlier in the day between Midnight and 2 A.M.; and simply notice the M1’s have much larger ranges in the dead of night than they do in the heart of New York trading. How is this possible? It’s possible and it’s the reality because the manipulators absolutely know you aren’t up and awake and trading, either for yourself or your hedge fund and/or institution at 2 A.M. … you think they’re stupid? … no need to do anything here cuz there isn’t any big traders around, and they can let the market go up/down some inside an acceptable range … get to New York, now you’re talkin’ a whole different kettle of fish … now, prices need to be “maintained & protected”, and the result are ranges that … let’s be honest here … suck. You don’t need to be a rocket scientist to look at the M1 chart and notice “when & where” bids are adjusted [spikes], and then notice nothing happens after the spike … it’s mostly “one & done” … in a free market how does this happen? [HINT: It doesn’t, but we aren’t there are we?]

Here a little after lunchtime in New York, it’s the central bank “bid show”; bids placed, everything “dead”, NDX100 slightly higher [God forbid it should ever go lower … I think it’s now illegal or something], shorts trapped [again] off the low a while ago with no place to go … and it’s basically “have a seat in the stock indices waiting room and we’ll be with you in 24 hours or so … until then enjoy the condiments and the one minute spikes out of nowhere that then go nowhere”! Not like it’s unexpected, but it’s a sick puppy for trading at the moment.

In fact, what we are seeing today is the first time in a long time a second leg down after a low during the day … the fact it’s coming off of a new high for the day after the open is the ‘setup” … and despite the “hammer” at the low, I don’t think we’ve seen the end to this yet … it doesn’t feel right. Despite my misgivings, it would have been a decent trade, but I simply passed on it. I really don’t like these spikes and then “one & done” until it decides to spike again later, either up or down it makes no difference.

And just to show how difficult things are, below is the SP500 in the M1; this is the busiest time of the day, and yet, there are entire M1 candlesticks where there is no trade at all, and then all of a sudden it lurches to another price in the next M1. How is anybody supposed to get a “read” on this when there is zero price discovery in the trade? Honestly, I don’t think [outside the last few months] I’ve ever seen this before in the history of stock indices trading, and it’s a big problem for me when trading, cuz you are really flying blind with no price discovery.

Our old friend, the “Flying Wedge of Death” [FWD] makes another appearance today [not unsurprising really given the nature of the day and what comes tomorrow], with the 1) open, 2) make new high, 3) make new low twice, and 4) go back to high, and 5) most likely go nowhere from here so that longs have to liquidate on the close with losses. And folks, if there’s ever something I want to avoid in trading, it’s the FWD, cuz it’s the financial equivalent of the ebola virus for traders. Here we are about 1 ½ hours to the close, and I don’t have a clue where prices go next … there isn’t anything in the market to tell me Mr. Jack Squat, and we’re simply sitting about 8 points off the open price in a nothin’ day before “Trifecta Thursday”. Granted, in hind sight the “hammer” low was perfect for a buy, but it happened in 4 minutes and never looked back, and quite frankly I wanted a test of 21100, not simply a few Dow30 points below yesterday’s low, before I got long, and also I was looking for a bigger day’s range to go along with it; simply put, a 70 point range for the day in an FWD isn’t anything I want to get involved in … been there, done that and it is nothing but heartache getting back to even … and in retrospect, when I think of past years trading, every time the market hands traders the FWD, pretty much everybody loses but the brokerage house. So, with what’s coming tomorrow, I got no regrets about sitting on my hands today; and if I can’t get what I want, then it’s gonna do whatever it wants without me.

Coming into today, my thought was that with the failed bank news out of Europe, if we could get any shot down in the morning hours to 21100 or lower with the appearance of some sell stops getting shredded , I’d take the long trade with volume, and if it refused to go down, simply leave it alone, cuz I don’t think it has anywhere to go on the upside today above the high set much earlier. As a result of this, I fortunately missed the FWD, and the market has basically been a nothing burger the whole day … here a few minutes from the close, the Dow30 is only a couple of points from the open, even after a ramp to a new high up at 21200 on “vapors”, only to see it sell off very quickly … tomorrow is gonna be another story, as I expect it to be a full throttled up move to new record-er-er highs when it’s all said and done … why? … cuz nothing short of nuclear war is gonna stop the mantra of stocks going higher, no matter the news, cuz that’s the FED’s game plan.

From yesterday, Turnkey has said everything in the master pooled account is accurate, so why complain about a small adjustment in the balance in our favor? We’ll simply take it and call it a trade adjustment. Unless it’s against us, don’t look for me to press them about why.

PAMM spreadsheet directly below.

Time for the beach! … I’m so outta here … until tomorrow’s circus.

Have a great day everybody!



1 comment: