TRADING IN THE ERA OF CENTRAL BANKS

“They are never going away … ever!”

Markets, all of them, are at the “whims” of central banks. The above pic from “Bloomberg” shows the expansion of the ‘balance sheets’ [a/k/a QE or money printing] of the “Big 3” [Fed, BOJ, & ECB]. As I point out in the new version 4 volatility trading manual [about half way done], the FED started actively intervening in markets starting with gold in April 2012, when they came in and “monkey hammered” gold down by more than $100 per Oz. in a day. From their counterparts in crime [BOJ & ECB], they learned quickly that if you desire a short-term policy outcome, the way to get it is to manipulate whatever market achieves that goal. Which, of course, is what they did with crude oil in February 2016, when the “Plunge Protection Team” [PPT] came in and ended the bear market in oil and rescued the industry from the $20’s.

“Oh, and it’s a “coincidence” that since that date, as the graph clearly shows from Bloomberg when the FED began throwing QE money into the markets in “spades”, stock indices “behavior” has changed remarkably with the PPT in the markets [Dow30 & SP500] almost every damn day since then. Outside of Brexit & the U.S. election, which globalist elites did not like and came as a surprise, thus causing mini-market meltdowns, the PPT has made their “fingerprints” known all over every market traded on the MT4”.

And lo & behold, the likes of Citi, BofAML, Vampire Squid, & JPM have all now started to break the news to their clients via “muppet research”, that maybe markets might be a little skittish since the FED’s balance sheet reduction could start in September or December; “right, and Peter Pan is gonna visit me tonight and teach me how to fly”? Like a drug and/or alcohol addict hooked up, there isn’t any way in hell the FED or anybody else is going to go away and allow markets to return to the “good-old-days” when traders called the shots. Of course, their actions distort markets and create “bubbles” in asset prices, but you aren’t supposed to notice cuz you’re too stupid, so STFU and buy moar!

What this leaves us with is nothing short of a gigantic “tug-of-war” between large hedge funds and the banksters, where lately cuz the banksters have pulled back some of the money printing, we are getting more two-way action than the previous couple of months. Simply put, more selling and less overnight upside “vapors” in the wee hours when everybody is sleeping. And what I have noticed lately is an almost schizophrenic bid/offer trading environment, where on down days when the PPT and central bank bids disappear, the market can’t hold a “bid” to save its life, and on up days when the PPT either has done something or given the indication that it might, the market can’t hold the “offer” to save its life either. Throw in slippage from any of the scumbag LP’s, and it makes for a difficult trading environment.

It should come as no secret then, that nothing means anything anymore except what some Twit at a central bank says it means; up bananas one day with nary a downtick, let alone some normal corrective behavior, then “out the window” down the next day with the exact opposite.  Trump says, Yellen says, Draghi says, Kuroda says; “the world cares and the HFT’s jump faster than anyone can imagine”. Up/down to some central bank determined level, and everybody can go home now. Wait … what? And that’s the trading world we live in now; everything pre-2016 is useless and meaningless as a result.

Turning to today’s market … no overnight Sunday “vapors” to the upside we have to deal with today … seriously, that gets really annoying when the banksters pull that crap … a little bit softer tone … could see some selling on the open from no follow-through from Friday … After an hour, and outside the total screwjob 20 point slam on the open, that saw somebody not have a very good open, it’s been a  “drift higher in mindless chop mode”, and watching my screen, I can see the slippage in fills and the price gaps being handed out only an hour into this clusterfark … can’t wait to see it in 3 hours.

And once again, today brings anther version of the “Flying Wedge of Death” [FWD], where the day starts on the high, goes to a new low on the open, and now after 90 minutes here we are up near the high, about 20 points shy as I write, whereby now we can stall and drift slightly lower trapping longs … you get the idea, and as I have written before, this type of trading activity is almost impossible to make money other than scalping both sides of the market, which I don’t do cuz you are only asking for major league trouble. And of course, with the FWD comes the “doji” daily candlestick, unless something happens which I doubt; whenever the FWD shows up, there is a strong correlation that a “Doji” day is upon us. [Note: which isn’t good, as it is interpreted as “indecision” by most traders.]

“Meanwhile, RIDDLE ME THIS BATMAN”! The SP500 can’t do a thing and the Dow30 drops 20 points, so that the correlation between the 2 indices is “on again” / “off again” depending on which way the central bank wind blows … the Dow30 much easier to manipulate than the SP500. Directly below, first the SP500, then the Dow30 markets in the M1, with the blue area under the “-vegas microscope”.

Ok, ‘splain this? The Dow30 stocks are all included in the SP500, which means [if I’m to believe the LP is “honest & fair” in pricing … (giggles, snort)] if the Dow gets whacked 20 points, how come the SP500 can’t move? These are the largest stocks in the weighted average, so the only thing that could possibly be the answer other than manipulation, is that the other 470 stocks rallied exactly at the same moment while the 30 in the Dow went down … all in 3 minutes in perfect unison? “No Skippy, it was dealer LP manipulation pure and simple and they panicked some longs and got them to puke into a falling market, filling their sell orders underneath the market to 1) take the other side of the trade, and 2) take some price protection with shit fills to guarantee a profit. And when the selling was over, bid it straight back up”! If this isn’t proof, I don’t know what is.

“Caution when entering … may be harmful to trading Newbies.”

Let me enlighten the downtrodden & trading uneducated, on exactly how this LP scam above works; the people that own & operate “LP A”, create another liquidity provider [LP B] that they own as a separate legal entity, often times having said entity be domiciled for legal purposes in a “tax haven” like Panama, Nevis, Gibraltar, British Virgin Islands [BVI], and/or Belize. When it comes time to “pump & dump”, especially dump, “LP A” will fill your order to “LP B” off the market by as much as they can that won’t get them indicted. When you complain [like I’m sure some did today], that you got filled off the market, they will come back and say, “Oh no, our HAL1000 computer system diagnosed itself, and came back and said everything is fine! … Dave? … We don’t have a problem do we Dave”?. When you ask if they took the other side of the trade, you’ll get “of course not, we are STP & ECN, and all orders go to the highest bid, lowest offer, and the closing of positions to the corresponding LP”. Which is all a lie, as initiating orders go, the vast majority of the time, to their “silent partner”, which is themselves; and closing fills get raped even larger cuz you’re closing them and they got to get their “pound of flesh” before you leave in disgust from the position. Modern day financial trading in all its glory.

Meanwhile, the regulators get tons of cash under the table to look the other way cuz nobody really gives a damn, all the while watching porn on their “busy-day-at-the-office” computers; what they know is what you know … you gonna sue them and take them to court over a couple of Dow30 points? And after you spend a large fortune getting it in front of a judge, he/she throws it out cuz it needs to go to “arbitration” first … and that means you’ll never hear about it ever again cuz the “arbitration judge” is 1) a former brokerage house scumbag lawyer, and 2) located in Greece or Albania. Buy a lottery ticket, the odds are better!

All of this leads to massive headaches for traders, cuz you got about 1 second to figure out if it’s “official LP bullshit” [above], or is the Dow30 move simply the start of a waterfall or a move lower? Which is it Skippy? To be sure, there is no “failsafe” way to know for sure, but simply say the SP500 is the vastly bigger futures market, and more than likely the Dow30 is the one being manipulated. Which is fine, as long as you understand the new paradigm of central bank “market manipulation”; if you don’t, you’ll never understand what is going on in this stuff on a day-to-day basis.

One move today, which started one minute after the NY open, and has taken the market straight up, except for a couple of 10 point hiccups, which is hardly a correction or break … again,, like for the umpteenth millionth time, the Dow30 moves some while the SP500 sits … then the SP500 moves like it’s got a fire under its ass while the Dow30 basically sits … One trade today for scratch profits, where I’m down a few points, then I’m up a few points, down again … so when I get up again about 20 minutes later I don’t hesitate to liquidate, thankful to be out of this total mess today. And today at least, both the SP500 & Dow30 are an inactive mess … the entire afternoon, and I don’t think the Dow30 has fluctuated more than a dozen points top to bottom, the SP500 a simple index point … in other words, a perfect central banker day where VIX gets crushed and prices hold steady to slightly higher with zero trading activity. It’s a little less than an hour to the close, and I want no part of this 3 point range crap in the last 30 minutes; this market is dead today.

One more thing today; over the weekend, I noticed that many of you were commenting to my posts and they weren’t getting posted. The reason is that I thought I was managing them through the Google blogger main dashboard; instead, they were supposed to be managed through this site’s email account, and then I choose whether the comment gets posted or deleted. Simply put, they weren’t getting to my “Inbox”, but instead were getting placed in the “All Mail” folder; not junk, and I wasn’t seeing them to either OK them or delete them. Rest assured, whether good or bad, whether you agree or got something on your mind you want to share about what I have written, I’ll more than likely allow the comment to be published. What I’m not allowing, and is the reason for my permission to be posted, are people who want to promote vitamins, travel, or some other website where they gain revenue through “ad clicks”, or want to tell me I got $15 million Dollars waiting for me in Nigeria; those that try and post comments like this, aren’t going to see your comments. Other than that, though, now that I know the proper procedure for posting comments, have at it if you desire … thanks for writing! Onward & Upward!

PAMM spreadsheet directly below. 

“Dude, where’s my ice cream? … I thought I had trained you!”

Time for the beach … the ice cream “king” [above] has got his “big girl panties” all bunched up cuz he got “nada, zip, zilch, zero” ice cream over the weekend … and he’s given’ me looks … we’re outta here to the DQ first though … until tomorrow.

Have a great day everybody!

-vegas

OUR TURNKEY FOREX  “PAMM/MAM”  IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!