powered by Coinlib

Thursday, August 31, 2017


“Please … let me summarize trading in the Central Bank manipulation era!”

I don’t even know where to start with this POS day in USDJPY; first, a complete decoupling from the SP500 amid money flows out of EURJPY [Yen bullish] and also into gold… that causes its own set of problems, but I’m so completely F-ing unhappy with my fills with Turnkey, there was a point late this morning I wanted to throw my computer into the ocean and go work for the circus … however, the dog talked me out of it. I go to buy Yen at 19 offer, get filled at 20.8; I go to sell at 07, and my stop box at 109.96 pops up before any graphic on my candlestick chart shows anything [sure, honest market] and says I’m filled; market is then immediately at 110.02; I go to buy at 109.030 offer and get filled at 109.070; I go to liquidate at 17.2, get filled at 16.2 … in short, this is bullshit. Sure, they know about it, and don’t give a shit … neither does the LP, which have I mentioned before are thieving scumbags?

“Dave? Dave? We don’t have a problem, do we Dave”? Yes Hal9000, we got a problem!!

“Trading” any market no longer exists [although, I will admit today gold actually “traded” well]; there is no “give and take”; it simply “lurches” from point A to point B and then dies, until it “lurches” again at the speed of light where scumbag LP’s can clean out the order books via stops. “Well, 2 can play this game guys, and while you dinged us again today with your bullshit fills off the market and bagging my orders for your own profit, and caught me via a stop hunt, enjoy it while it lasts, cuz it will be the last time. Why? Cuz from now on, I’ll be patiently waiting for you and your “spikes from hell” and when you gas it lower that’s when I’m going to buy it. Oh, I got a “battle plan” alright, and it’s called taking advantage of you when you do shit like this … and since you do it every day to one degree or another, I’ll be waiting to give it back to you seconds later … tell the asshole President of the TBTF bank you work for I’m now the “casino” and you guys get to be the “pigeon.” Good luck scumbags”!

Name your market on the MT4; whatever it is, it’s a joke. There’s a “phantom” bid/offer, which doesn’t mean “bat guano” cuz it’s a fairy tale, and there’s a big TBTF bank ready, able, and totally willing to screw you over via slippage and whatever stop you have in the market. I want to be clear, this isn’t a Turnkey problem; every brokerage house in the world uses the same banks, so switching brokerage houses isn’t going to solve a damn thing. All you do is jump from the frying pan into the fire. What this is, is total freedom of the banks to do whatever the hell they want with zero oversight and regulations, with a “wink & a nod” from the BOJ, ECB, and of course the FED. And when the Twits at the FED retire, where do they go to collect fat 7 digit salaries as “consultants”? Do they become “Greeters” at WalMart? Hell no, they go to the TBTF banks where they “looked the other way” for years on end; now it’s payback time at retirement. [Except for Lacker, who had to resign cuz he gave a big hedge fund inside info … nothing for you!]

Today is a perfect example of “speed of light … crickets” trading; you don’t know when the “blitz” is coming, all you know is that stops will get run, cuz this is how the assholes at the LP get their bonuses. As I told them this morning, “get one of your flunky gophers to keep track from now on … talk with you dirtbags in a couple of months … we’ll see who’s laughing then”.

And of course, when all the loose change is gobbled up by these creeps, it’s back to “crickets”, where we’ll be spending the next hours in a 3 PIP range so they can screw orders via slippage. As I said, there is no trading … only “lurching”, and every market on the board a complete mess by central bank design.

Again today, I feel like “I’ve won”, when I haven’t; down collectively only a couple hundred bucks [a complete “miracle” if you must know, and again, I traded myself to a manageable loss instead of a disaster], 99%+ of which again is F-ing slippage, the 4 PIP off the market lousy ass fill hurting the most, but there were others as well … that one fill alone cost us almost $150 … I seriously hate these guys for shit like this. And don’t think for a second the stock indices are any bargain, cuz they aren’t … slippage and stop hunts in the Dow30 very much in play there also.

I know how to defeat this kind of thing, but I was hoping it wouldn’t come to that and I could simply trade the market, cuz it makes my life more difficult, but I do “what I got to do” to be profitable. Another day of major reversals and fund flows buffeting pretty much everything, and when the market turns [any of them], it’s vicious, with lightning speed, and you can expect to get terrible fills. As I’ve said before, with USDJPY it’s “financial terrorism” each and every day, and what happened yesterday has almost nothing to do with today.

So, in addition to all of this crap, Hurricane Irma is heading straight for the greater Caribbean, due in about 4 or 5 days; already it is a CAT 4 Hurricane with winds over 120 MPH … Oh, won’t that be interesting and fun. If we get into next week, and you don’t see a post or two or three, you’ll know why. I have emergency power, but I’m guessing there won’t be internet or phone service anywhere near here. We’ll see what happens.

And if that’s not enough, tonight I have to reinstall “Open Office” and recreate the PAMM spreadsheet, cuz it’s a total mess because of an upgrade that got interrupted by a Windows 10 upgrade … corrupted files and all that crap. Hopefully, I’ll get it done tonight and everything will be current by the end of tomorrow.

 Onward & Upward!

Time for the beach … the dog & I are outta here … until tomorrow.

Have a great day everybody!



Wednesday, August 30, 2017


“Living life outside of a comfort zone.”

When I was a kid growing up in Northern Illinois, in the summertime my maternal grandparents used to take me to the public library almost every Saturday. I would pick up books for the week, and they would guide me towards subject areas, at that moment, that I didn’t find particularly interesting. My grandmother used to say to me; “learn to love the subjects you dislike … be stronger than your weaknesses and challenge yourself to learn as much as possible … do not rely on others, but develop a thirst for knowledge … and lastly, do not do the “easy things” but the “right things”.

And after I would read something, at lunch, dinner, or even on the porch watching the sunset, they would ask questions about what I read and learned; often I would hear, “if I wanted a book report I’d ask for one; I want to know what you think about it … what is the author really trying to say? … what is his/her premise”? And when I would attempt to answer with total bat guano, my grandmother would have none of it; “you’re talking like a 2 year old; speak correctly in sentences … get rid of the “umms, ands, like, etc.” and talk intelligently”. Some days, I felt like I was in prison; but I’ll tell you this. I was so far ahead of my friends when we all started first grade, you wouldn’t believe it. I remember getting “See Spot Run” as our first book and thinking, “seriously, is this a joke? You think I need help or can’t read this”?

All of which brings me to the present and my 3 greatest interests; 1) chess, 2) golf, and 3) trading. Chess is purely mental; golf is having a great time outdoors, getting some exercise, and controlling your emotions with the little white ball; trading is my profession. And what is it about all 3 that links them to each other? EASY PEEZEE: “they are simple but not easy; they require discipline & patience; and by constantly humbling you, you get to learn about yourself and how little you really know”. In other words, there is no “comfort zone” here, only constant challenges that make you want more. Partially, to that end, it’s why in the “Download Links” section over in the right-hand column, I include the link to “My Super Duper Chess Library”; over Labor Day I’ll be adding more books to the list and expanding it. You want a “mental challenge”? Dig into chess and you’ll never leave; drop the “couch potato” routine of mindlessly watching TV every night or over the weekend watching “meat sticks” play football, and start to expand your horizons.

Turning to today’s markets … a slew of reports coming out in the U.S. and late Europe to influence trading today and set the tone … very little in Asia and early Europe in terms of range in anything … I’ll be waiting for the ADP jobs report & GDP numbers at 8:30 before taking any position.

Well, that escalated quickly … and as soon as the dealers and other assorted LP scumbags clean out the order books on millisecond spikes after the ADP & GDP numbers are out… hello, it’s crickets time … simply almost impossible trading conditions exacerbated by horrible slippage and markets that are seeing the “Flying Wedge of Death” [FWD] (DAXX30), massive reversals (SP500), more reversals (EURJPY), and death on a stick (why, that would be USDJPY).

I’ve increased the volumes up to 400,000 in USDJPY, and quite frankly, for a market that pretends it’s the world’s most liquid, the slippage via the dealers and the stop running are atrocious. Tomorrow I’m having a “conversation” with Turnkey about the USDJPY LP, who quite simply, should be in jail. But enough of the “inside baseball” talk … all-in-all a slight losing scratch with commissions, considering the volumes, and truth be told the LP stole over $200 via slippage, so at least I can sleep tonight knowing we did our part in funding his mistress’s lipo-suction, his son’s drug rehab, and his daughter’s pony … Gosh, I just love a “feel good” story, don’t you?

And while I can accept losing money either when the algorithm is off, or when my timing is off, it frickin’ boils my blood when I lose any amount and I’m right about the market … sure, losing a collective couple of bucks today doesn’t matter; all told about a tenth of a percent or something like that, but it’s the “trading process” that the current “central bank trading paradigm” offers us, that is a problem; 1) speed of light trading … crickets, which is maddening, 2) LP dealer shenanigans when markets are slow and listless, and 3) the excessive running of stops [buy and sell] throughout the day and night on a daily basis that prevents decent short term trends from developing. Put it all together, and some days I feel like “superman” for collectively breaking even or losing less than $100 [no matter the volume].

And while the LP in USDJPY is bad [TBTF bank like Squid, Morgan, or HSBC], in other markets it’s worse; looking at a Dow30 M1 today for a little while, it’s simply a mess of gaps from one minute to the next, and in the DAX30 the spikes [up or down take your pick] will kill you. In EURJPY, while the spread is one of the best in the biz, that doesn’t help much when the bid/offer goes up/down 2 – 3 PIPS every second and you have absolutely no idea, if you click the buy or sell button, where you’re gonna get filled … but trust me, if you’re buying the LP will make damn sure you get filled at the top on a mystery spike, and on the low if you’re selling … that means you’re automatically down 1-3 PIPS before you’ve clicked the “OK” box for your fill. What the hell is that? And in markets like USDJPY, which is either exploding up/down, or dead in the water you can’t get 1 ½ PIPS move in 15 minutes dead, slippage like that makes making money very difficult.

Today, for example … yesterday was the “explosion” kind of day … market waits all night and early today for ADP & GDP numbers at 8:15 & 8:30; market explodes up in a millisecond, and then goes into the slow drift down and then sideways routine for 4-5 hours … you couldn’t get a 10 PIP move to save your life … the “special indicator” 2 EMA’S hugging each other for hours … and then BOOM! … here we go on a romp to the high, where now the LP starts to hand out slippage so bad on buys they should be locked up. And when the market can’t make it higher, it’s “speed of light” down 5-7 PIPS in less than a minute; what took 20-30 minutes to go up, takes 30 seconds to give it all back and then some … everybody who’s long out at the low, and then the dealers bid it back up cuz now they’re long … rinse, repeat, and you get the idea.

Add to this what I said yesterday … “is there a market in New York that actually trades, or is it simply a charade; cuz from where I’m sittin’, it’s either the “Plunge Protection Team” ramping stocks, or the “Rally Protection Team” pummeling gold”?

In any event, the ‘special indictor” is working very well, and although we had mindless “chop” for the vast majority of the trading day, which doesn’t help us in terms of profit, it is late August and markets have a tendency to be thin at this time of year. “With all that’s on the docket, both economic and political, in the coming couple of weeks, … OH, won’t September be fun and profitable”!

PAMM spreadsheet I’ll have tomorrow, as the “Open Office” upgrade didn’t work for some reason and has “bottlenecked” the spreadsheet … I’ll figure it out tonight and everything will be current by the end of tomorrow [hopefully]. Onward & Upward!

Time for the beach … the “Ice Cream King” [the dog] & I are outta here … until tomorrow.

Have a great day everybody!



Tuesday, August 29, 2017


“Good Saul, call him … I need Kim Jong Un’s broker!”

Seriously, I’m so sick and tired of being sick and tired of getting screwed by the LP at Turnkey, I’m about ready to call ‘Saul” and get the “guy who knows a guy” to start breaking legs. What do I want? I want Kim Jong Un’s broker! [You tell him he got a shit fill, Ok?] Something really strange about yesterday’s very late action after New York closed; according to the article on ZH, Yonhap news agency said the missile went over Japan at 21:07 GMT; Ok, how come USDJPY started breaking heavily @ 20:58 GMT [server time also]? Who knew 9 minutes early? And who knew the trajectory was over Japan? Dear Kim: “Just make sure Xi & Vlad get their cut, Ok”?

Now, I know what some of you, and maybe that includes some “Newbies” as well, are gonna say; “-vegas … use limit orders to avoid getting hosed”! Well, that’s a nice thought, but let me show you how every brokerage house in the world handles the following situation. You’re short from 109.00 and you place a limit order to liquidate [buy limit] at 108.97. USDJPY goes down to 108.969 and the very next bid/offer less than a millisecond later is 109.01 / 109.013; where do you get filled? You get filled at 109.013, cuz the brokerage house will explain to you that your order couldn’t be filled, so they filled you at the next best price. And you say, “I had a limit order … it isn’t/wasn’t a market order and it said buy USDJPY @ 108.970, not go get the next best price … and I want my fill at my limit price”! And the brokerage house says, “read the terms and conditions of your account with the LP … it says limit orders are filled at the price specified OR THE NEXT BEST PRICE … you signed the agreement, so now please STFU and go away and trade”! So, for the most part, limit orders are useless, cuz in reality they are market orders.

I’m writing this early in the A.M., so I don’t know what the rest of the day is going to look like; having said that, though, directly below a daily candlestick in spot gold [XAUUSD] that merits attention. After that, the daily candlestick in USDJPY with trend line. 

Often times, Zero Hedge in their daily wrap up of markets will show the direct correlation of spot gold [or sometimes nearest futures] to USDJPY, and the fact that there is a very strong correlation between the two. I don’t know what the future holds, but the Square of Nine makes it pretty clear that today could very well be the high in gold and the low in USDJPY for a while. Food for thought.

Turning to today’s market’s … does New York trade anymore? … cuz I’m seriously wondering what the point is of a session in the U.S. [in anything] where nothing happens except “protect & defend” the shit from overnight … up a PIP, down a PIP; rip some buy fills, rip some sell fills; risk $500 to make $20 … that’s all U.S. trading has become. In short, New York is a nightmare from a trader’s standpoint, cuz nothings happens! And while I’m at it, how is it my 2 lots can move a multiple trillion Dollar market like USDJPY? All we ever hear is “deep liquidity”, and largest, best & brightest, most sophisticated computer networks on the planet with razor-thin spreads and “pure” ECN & STP handling of orders for the fastest executions on earth. Really? What stupendous F-ing planet are you living on, cuz no matter what I do, I “personally” swing the market in USDJPY at least a PIP? To paraphrase Bill S., who a long time ago said, “First thing we do is hang the moneychangers [LP’S]”, or something along those lines, and I for one would buy a bag of popcorn and watch gleefully.

Everything correlates until it doesn’t … and when that happens you got a problem. The only two good correlations we have are USDJPY versus gold [which inverse correlate “Bigly & Yuge”] and to a lesser degree USDJPY versus the SP500, although not “tick-for-tick”, but in a broader trend sense. When the world gets “wacky” [like now with the Norks], the crosses buffet the Yen around like popcorn popping in the kettle, and it makes it damn difficult to trade because USDJPY is the “cross champion” of FX, and quite often the Yen bid/offer is nuts … today being a perfect example. Throw in the “Flying Wedge of Death” [FWD], and the accompanying spikes from hell for the umpteenth hundredth time in these last few months, and it becomes a wonder there are any traders left in the world with any money.

Today, not seeing much correlation with the stock indices, although they both have turned around to the upside, the Dow30 much stronger though … I guess everybody figured out shooting a missile 800 miles from a coast isn’t the start of WWIII … in any event, USDJPY today at the mercy of gold and EURUSD and the EURJPY cross; those money flows really the movers behind the Yen today. And because of this, what you are witnessing is a very, very erratic trade where USDJPY goes in one direction slowly over the course of 10 – 30 minutes, and then BOOM! … all the gain up or down are gone in 10 seconds, as money flow from some FX Yen cross sets off stops requiring a corresponding position or a liquidation in USDJPY, and therefore the jump or drop in price.

As I have stated before, when you start throwing Pols & geo-political events into these markets, it gets very dicey because there is no accurate way to judge pure panic or euphoria [think the election aftermath] from how it is impacting a particular market. Trading off of Nork news is close to impossible, cuz there is no way of knowing what is 1) real, 2) a false flag), and/or 3) pure propaganda hitting the news wires. Quite frankly, markets don’t either!

Just after Noon in NY, and we’ve just had another USDJPY upside spike explosion … they just come out of nowhere; no warning … and as quickly as they come, as quickly as they often go … almost 90 minutes now plum over yellow, and for a “5 & 9” indicator, that is a long time. I said it yesterday, and I’ll say it again today; “what is the purpose of New York trading OR trading in the U.S. in general, cuz THERE IS NO TRADING … it’s “protect and defend” or sit and do nothing. Case in point the Dow30; scroll back on your M1 candlestick chart and discover the ranges of the M1 are bigger @ 4 A.M. in the morning than they are during the New York day … wait … what? … yes, unbelievable but simply true. And USDJPY the same circumstance … so, how has this country squandered its financial industry? HINT: Start with Obama regs for 8 years and connect the dots; it’s a wonder we aren’t Venezuela already”.

A number of trades today, and you’ll notice in the PAMM results a mistake trade for a piddly amount; volume field changed after I brought up the order box, and even though I checked it first, when I went back to it after my fill I saw the changed volume amount … just wanted to bring your attention to it so you didn’t wonder why I did a trade of this small size. Other than that, again today we are the victim of the scumbag LP, whose daughter I guess needs a new pony or something cuz, except for one fill, all were off the market by at least 1 PIP … despite that, still made money, but this market is as treacherous as they come [not that any of them are easy], and it doesn’t help when Pols and/or geo-politics stick their ugly pugs into the market to mix things up dramatically. Still, “The Tunnel Method” is performing very well, and the special indicator is remarkable. Even if the entire algorithm was simply the “special indicator”, if you simply were never short when plum is over yellow and never long when plum is under yellow you’d make a fortune and risk very little.

And again, cuz many of you may not know that FWD’s and massive reversals in price are most definitely not the norm, today has seen its share; most notably in everything! Some of the reversals are staggering, and some of the FWD’s are as well, most notably the most disjointed stock index currently active the DAX30, where a chart looks like a hand grenade was thrown into a spaghetti factory. What we are looking at, simply put, is confusion on parade as the world figures out where the U.S. is headed in the next 30 days, and it is creating some very wild swings.

I’m really not very happy with any market right now; of the three, USDJPY trading the best, but that’s not saying much. Just when you think you have a trade that starts going in your profit direction, here comes a spike to take it away if you’re not quick to the draw, and it is making it very difficult to hold onto anything so we can ride a profit. Add to the equation the FWD, reversals, small ranges, and spikes from hell, and welcome to my world. As always, my first priority is preservation of capital, and that automatically means making those trades that have good reward/risk profiles; then never letting a profitable trade turn bad. What we haven’t been getting are “running trades” within a short term trend; that’s what the “special indicator” is all about. So, if USDJPY can simply slightly resume a normal trading behavior, and leave the FWD’s and  “doji days” behind, the PAMM can prosper; now, if we can just get the scumbag LP to make an honest market and not clip us on every trade… I can dream can’t I?

Here towards the end of the day in New York, it’s starting to look on the USDJPY candlestick like a very bullish engulfing pattern reversal from a new low for the move down, and also what I said earlier about gold putting in a short term top from Gann’s ‘Square of Nine’ calculations. I’m just wondering what Asia is going to have to say about this later tonight; we’ll see. Tomorrow has the potential to be a very good day. Onward & Upward!

The PAMM spreadsheet directly below.

Time for the beach … the dog & I are outta here … until tomorrow.

Have a great day everybody!



Monday, August 28, 2017


“It’s why God gave you a brain.”

It’s tough sometimes, knowing that what you see with your own 2 eyes might be deceptive. Today, a classic example in USDJPY with a buy signal early this morning directly below.

On the surface, everything lines up; both aqua and white are sloping up with white over aqua, and the market corrects down to the “tunnel”; question is, why isn’t this a “buy”? SHORT ANSWER: “the market has lost upward momentum cuz it took 21 minutes to go 10 PIPS; the chart deceives because the MT4 fills the price to the screen, regardless of how tiny the price moves. It should have only taken 3 or 4 minutes, tops, to go down 10 PIPS NOT 21. By taking 21 minutes, it tells me sellers are “lined up”, and any subsequent rally has a very high probability of being short-lived”. Not that I’m thinking the market is a sell; hell, this stuff can’t go 10 PIPS to save its life; while gold, EURJPY, and EURUSD are moving, Yen is sitting … it’s the weak link in the EURJPY chain, and the strong correlation with gold is lost today.

And so it goes in markets that move very little; today’s Yen caught between conflicting moves in the SP500, EURJPY, & gold … what to do, what to do? … well, that’s easy, do nothing except “chop”. Today being a perfect example of what I wrote in the weekend update; situational awareness and how to respond to it correctly, cuz when things don’t make sense, simply back away from the table and come back later.

I counted 3 great algorithm moves today in EURJPY … not so in USDJPY and the stock indices, who have decided to sit today out for some reason … I’m left wondering, how many more days USDJPY is going to sit in the 109.20’s and/or 30’s before it moves somewhere significant? The number of times over the last week the market has tried to rally and just got slammed quickly, leads me to believe the next big move is lower in USDJPY. Sub 109, and then 108.610 and the sell stops will accumulate from the longs. We’ll certainly see in the days ahead. USDJPY today, exhibiting the kind of “terror” I have written before, where in 2 minutes when spot gold exploded above $1300, the market gives up in 2 minutes everything it had gained the prior 23 hours … and so we go with “speed of light … crickets” that we are all used to by now. And I’ll say again, if you got caught in that move long, how do you make it back today? [Hint: you don’t]

Meanwhile, over in the U.S. stock indices, it’s feed the chipmunks at the open, go straight down a tad, and now sit in a tight range doing “nada”; the Dow30 locked in a numbing 29 point range the last 4 hours, trading like its proxy USDJPY. Welcome to late August in financial markets, where the world is basically on vacation this week, the institutional desks are manned by the most recent MBA’s while the bigwigs are out in the Hamptons, and strange happenings are the norm.

“Tease, tease, & more tease” … this is USDJPY & the Dow30 today; realizing in the last 10 trading days, USDJPY hasn’t moved 100 PIPS. And with that tease comes our old bud the “Flying Wedge of Death” [FWD], where today we see 1) set the high in Asia, 2) move to low in early Europe, 3) rally to new high in U.S. session to clean out buy stops above 109.40, 4) go almost to another new low down around 109.04, and now 5) as I write rally back to the middle to yet again trap more traders in this clusterfark that simply will not end, in a pathetic 30-ish PIP range. And if you’ve never been caught in the FWD, you’re either a very new trader or not one at all, cuz it’s an account killer.

About an hour to go in New York before the close, and the 2 markets I’m watching are the deadest bodies on the block; the real movers today being EURUSD, EURJPY, and of course spot gold, breaking above $1300 for the first time in almost 10 months. I’m not really surprised at the lack of interest and volume in USDJPY and the stock indices simply because after this week we get into September, and the docket here is full of earth shattering potential moves from a plethora of events. So, why would anybody want to make a major investment move now, with so little information about what is to happen regarding the debt ceiling, and all G3 members having important interest rate meetings? So, keeping things in perspective, late August isn’t exactly the busiest time of the year, or even close to normal trading activity.

So, no trades today simply because there isn’t anything to do … I don’t really want to be in EURJPY at the moment, preferring instead to be in our main stock index proxy USDJPY. Trust me, the very low volatility and small daily ranges will quickly change when the market gets wind of the debt ceiling situation, and word out about the impending interest rate meetings.

As I said earlier, some great algorithm “special indicator” moves in EURJPY today; this is what it looks like when markets exhibit “normal” intraday volatility. Scroll back on your MT4 and check them out, after you read the manual. All we need now are stock indices & USDJPY that moves somewhere, instead of sitting in abnormally low intraday volatility where there isn’t anything but “chop”.  I’ll see what happens in Asia tonight, and if the occasion warrants it, tomorrow I may go into EURJPY as our secondary stock index proxy. About a half hour to the NY close, and it’s time to give up on this crap for today in terms of any kind of move. We’ll see what tomorrow brings. Onward & Upward!

The PAMM spreadsheet directly below.

Time for the beach … the dog & I are outta here … until tomorrow.

Have a great day everybody!



Sunday, August 27, 2017


“Following directions to the letter!”

The “special indicator” for “The Tunnel Method” has been added to the manual starting on page 11; for a full explanation, simply go over in the right-hand column to “Download Links” and view or download the PDF; it’s completely free, in Adobe PDF, and is available from my shared files box at It’s simple [nothing is ever easy], straightforward, and for you “Newbies” out there, if you successfully passed 2nd grade, you won’t have any problems getting everything up and running; the manual has full instructions that have been “Grandma Tested”. So, enjoy!

I will repeat what I wrote in the addendum; “situational awareness” is critical for success in using this indicator of the 2 EMA’S that are added to “The Tunnel Method”. “Chop” as everyone who has traded for longer than 5 minutes knows, is the “killer” limitation anytime EMA’S [exponential moving averages] or MA’S [simple moving averages] are used in a trading method or algorithm; that’s the bad news. The good news is that “chop” is somewhat predictable, and that when the market slows, or refuses to expand a daily range during the trading day [especially early], you can pull back and avoid the “chop”. Markets go places eventually, so patience and discipline are always needed when using MA’S of any type, form, or duration.

A good indication of potential “chop” is the range of the EMA’S in the M1; if they are tiny [less than 2 PIPS], clustered around a price, it’s a good time to ask yourself if “chop” has taken over trading for the moment; also, please be aware of the slopes of the critical white & aqua lines in “The Tunnel Method”, cuz they are your clues to the probabilities of the market going up or down.

Remember that probabilities are simply that; not guarantees. The power of the “special indicator” is its generation of winning trades over a series of trades within a trend, which until the trend changes will generate 80%+ winning trades. That doesn’t mean the first or second trade MUST BE A WINNER, simply that out of 5 trades, 4 should be winners, if the trend holds. This necessitates low to medium leverage, so don’t make the mistake that any trade MUST be “the home run” everybody is hoping for but never seem to get.

Finally, also remember that any MA’S or EMA’S are “mean reversion” indicators; meaning, they must eventually fail on crossover signals or else the market would be at “0” or infinity. So far, I don’t see either anywhere. Just from anecdotal evidence over my career, once you get past the third or fourth winning “special indicator” signal, the probabilities appear to diminish drastically for further profit moves, unless of course there is over-riding news to warrant some type of tsunami type move. Here is where “situational awareness” is critical and a knowledge of what is typical for a daily range under normal circumstances. For example, if stock indices are rallying and USDJPY is rallying in correlation, and the typical range for the day for USDJPY is 100 PIPS, and you get another “buy” signal when the range is at 140 PIPS, the question is, is it wise to take the position?

Of course, the dirty little secret is, nobody knows; whatever algorithm rules you dream up, the market will foil you cuz it simply must. On a probability distribution curve, every time this scenario comes up, the solution will be randomly distributed around a mean that “usually” occurs … so where are you now? The solution lies in 1) common sense, and 2) your individual risk profile, and what you are willing to risk finding out. Some will, some won’t, but there isn’t any solution to the problem or question.

The greatest asset “The Tunnel Method” with “special indicator” provides traders is the fact that its greatest limitation is in plain view to see and avoid, and if you miss a move it doesn’t matter cuz there will be infinitely more in the future. Given a day or two looking at the market through the lens of the algorithm, you’ll start to develop a “feel” for the turns and the various lines, and also develop a “feel” for impending “chop”. And even a very tiny, partial victory in that regards puts you way ahead in the trading game. So enjoy everybody, and if you have comments/questions please email me.

Have a great rest of your weekend everybody!



Friday, August 25, 2017


“Hey, what seems to be the problem up there?”

All eyes & ears totally fixated on Jackson Hole, Wyoming, as Grandma Yellen & Super Mario speak at the Best Western Hotel & Lodge and keep us all waiting … again. Predictably, the entire investment world thinks, and more importantly is positioned for, a “dovish” slight softening of tone towards hiking rates, if they address the subject at all. Stay tuned … we’ll see.

I said yesterday, that I’d be adding another indicator to “The Tunnel Method”; that indicator is the relationship between a 5 EMA [LOW] (plum line) and a 9 EMA [LOW] (yellow line). This is as fast an indicator of a resumption of trend you can get without being overwhelmed with “false positives”. A position can be taken long when plum crosses over yellow when the “white line EMA [121 CLOSE] IS OVER THE “aqua line EMA [183 CLOSE]; similarly, a position can be taken short when plum crosses under yellow when the “white line EMA [121 CLOSE] IS BELOW THE “aqua line EMA [183 CLOSE]. Directly below, it should look like this.

Longtime readers will remember this indicator from the old gold algorithm; nothing else works better within a trend when the “tunnels” aren’t getting hit; however, in very tight choppy ranges you must be careful cuz this can create some losing trades due to chop. But overall, when the market isn’t cooperating by giving us “Tunnel Method” signals, and is slowly trending, this indicator will do very well. This weekend I’ll be updating the manual and including this valuable addition. And on Monday, I’ll be implementing this in the PAMM. See this weekend’s “Sunday Update” for details in the updated manual, where I will go into full details.

Turning to today’s market … well, that escalated quickly didn’t it? … “everything, and I do mean everything a gigantic “Flying Wedge of Death” [FWD] … amazing, the FED Pie Holes all say they want “stability”, then go out and create chaotic conditions in the markets, that in some markets like gold today, wiped some folks completely out … first with the buy stops, and then with the sell stops … and then climbing all the way back to the high. Same old bat guano from the faculty lounge Twits that talk out of both sides of their Pie Holes, and get away with it cuz nobody in the financial MSM will call them out on it.

And as crazy as other markets have been today, USDJPY not doing Mr. Jack Squat … high to low only 70 PIPS, not something like 100+ PIPS seen on plenty of other days … but really, once the Bullard & Yellen clusterfark ended, it’s been a range of 109.33 to 109.11, a whopping 22 PIPS the entire day minus the theatrics of gap pricing; so, good luck with that chop, Ok? … and while I get no pleasure from sitting here and watching this 20 PIP yo-yo, I don’t get zip from losing either … from where I’m sittin’ this entire week hasn’t really seen anything but stop hunts and very tight ranges … buy stops north of 109.500 and sell stops sub 109.000, where in both cases the market attempts to go but can’t, and then turns around viciously to the other side, where a whole group of traders thinks “this time for sure” and piles into a trade … only, they’re attempts are being met by the same group of dealer buyers at the bottom and sellers at the top … and the result is trading in the 109.20’s and 109.30’s where “chop” is the norm. Fact is simple: this stuff will move violently when the debt ceiling, budget, & tax plan become clearer than they are now. Big money isn’t going to play the “dealer stop hunt” game that catches most retail traders; they know how this puppy trades and acts, and they got bigger fish to fry. My estimate is that within a couple of weeks somebody will be hitting the panic button. And along with that, what have the stock indices done during this time? Well, nothing … a little up, a little down, but overall stuck in the 2440 -2460 range in the SP500 with zero follow through as the market moves to either side. From August 11th, the SP500 & USDJPY are at the same place now as they were then … 2 weeks of a nothing burger!

Today is trading like an NFP Friday; extremely tight ranges, and then BOOM! … all hell breaks loose … first one way, then the other, and then it’s back to … crickets … traders getting caught playing the “momo game”, and then 30 minutes later everything slows to a crawl cuz the dealer books have been wiped clean on both sides of the market, and nobody has any money left; see today’s M1 gold chart for a classic example of getting annihilated on both sides within minutes, and then ask yourself how anybody makes this back? Well, they don’t. And while I’m disappointed USDJPY didn’t trade well today [a whopping 22 PIP range if you didn’t play “Yellen roulette”], I know better than to wander into a dark building where people are blindly swinging baseball bats in the dark, and then expect not to get hit in the face. And the dirty little secret here, is that by sitting and doing nothing I’m ahead of the game. And, truth be told, at least half of the week’s price action has been during “the dark hours”, where price manipulation, fraud, gap prices from nowhere to nowhere and back, all the while stops being filled, and then it’s back to biz as usual; simply put, the daily ranges are misleading, given Asia’s penchant for trading abuses. All that really matters is Europe to the close of New York … and that has been very tight all week.

Here in mid-afternoon, everybody now waiting for Super Mario to take to the Jackson Hole podium and enthrall us with ECB bullshit; given his history over the last decade of surprising markets, nothing is out of the question … and the way the EURUSD is trading today, if he even hints the Euro is overvalued, or that inflation is disappointing, or that QE isn’t gonna be cut back quite like people think, the EURUSD will be “Thelma & Louise’d” off the nearest Grand Teton cliff out in Wyoming … late in the day on a Friday, this could be a trading disaster waiting to happen. On the other hand, a break through 1.19110 will see buy stops set off in a cavalcade of lurches up that will most likely take your breath away. And the Yen? We’ll see, but the market is short going into Super Mario’s little talk, so buy stops above the market have the potential to be “weekend killers”. No matter what you do here, the reward/risk ratio literally stinks.

Well, whatever it is he said or didn’t say, the EURUSD is en fuego!, up to 1.19400 … “yea, stability, that’s the watchword isn’t it”? … can USDJPY or the SP500 move? … Errr, no … fugetaboutit!, as USDJPY shorts getting “stuffed” as I write … gee, can we break this 22 PIP range we’ve been in all day since “Yellentastic”? … why yes we can!! … by one PIP … God help this mess. Half hour to the close, and I can’t take any more of this crap. No trades today, thank goodness. Onward & Upwards!

PAMM spreadsheet directly below.

Time for the beach … dog and I are outta here … until Sunday night’s update.

Have a great weekend everybody!



Thursday, August 24, 2017


“Poster boy for Stock Indices!”

BTFD is becoming so ingrained into the psyche of American stock traders, I don’t think 99.9% of them have any idea the explosive powder keg stocks are sitting on ready to blow; and I don’t mean up either. I have no clue how the budget battle or the debt ceiling works out, except to say I think President Trump is ready to call the bluff of members of Congress. He campaigned and was elected on 1) conservative Supreme Court Justices [so far so good], and 2) building the “Wall” on the border of Mexico, and in his most recent rally in Phoenix, doubled down on that pledge by saying he’ll shut the government down before he yields on the funding. Negotiating ploy? Maybe, but you better be prepared to do it.

Stock Indices, for their part, could care less about such trivial matters of the real world, living in their own BTFD universe, cuz as we all know, stocks can only go up cuz the FED says so and they got the “Plunge Protection Team” [PPT] covering their back … what could possibly go wrong? Well, I think there’s a very good probability we’re gonna find out in the next 4 – 5 weeks.

USDJPY [our stock indices primary global proxy] is “stuck”; maybe cuz it’s August, and the end of summer things usually get slow, but this feels different to me. It feels like sub 100 or let’s revisit 120+ come September, and if there’s ever a global powder keg, once it gets rolling, it’s USDJPY … cuz it simply feeds on itself and keeps going … and if stocks happen to get “pasted lower” cuz there isn’t any debt ceiling increase or budget, USDJPY in 2 digit territory looks really probable. So, while we fiddle around in tiny ranges with no direction right now, fasten your seatbelt cuz I will be shocked if things don’t explode real soon.

Turning to today’s market … Ok, can I go back to bed now? … seriously dead action with no range or direction … everything a function of who’s caught long/short, and how can we [the dealers] squeeze them for maximum pain [theirs] and profit [ours] … that’s it, nothing more complicated than that.

One algorithm trade early today, directly below, and really the algo trade “that wasn’t” which happened a little before, was the one that I wish had happened, only missing the “Tunnel” by about ½ - 1 PIP, and then springing straight up to a new high. But hey, it is what it is, and we finally got another legit signal, which I took … and it’s early yet, so nobody really knows if the market is going to be dead today or what … it was a “good news / bad news” type of situation. The good news is we got an algorithm signal; the bad news is it went nowhere. Finally, after more than 10+ minutes holding it, it popped up on a small spike and I liquidated it immediately … big whoop, but at least it was profitable.

As I pointed out yesterday, with both an “ideal” long and short position example, you want 2 things to happen; 1) it doesn’t stay in or around the tunnel but more than 1 – 4 minutes, and 2) it moves in your profit direction, giving you maximum flexibility in how you want to trade it. Well, today I had neither, and it made for an easy decision when given the chance to liquidate with any gain.

In tomorrow’s blog post, I’m going to give you an added “indicator” to use on the M1 for maximum flexibility and profit; it’s time tested, and together with the “Tunnel”, no matter if you’re a scalper or trend follower, will add profits to your account. I’ll cover that in detail tomorrow, and then over the weekend amend the manual and add it.

Here in the early afternoon, it appears a “Jackson Hole rumor” has hit the market … don’t know what it is, but the only thing the market is going on right now is anything out of the event … a nice almost 20 PIP romp straight up on panic short covering no doubt, with not a trace or hint that it was coming. For all it’s worth, today has been nothing more than a 20 – 25 point “Flying Wedge of Death” [FWD], with multiple trips to both ends to trap the unwary … some days you don’t get any trend, only serious chop, today being one … but if you are determined to try and force something, they will show you the door poorer.

But, what would any day be without running some stops? Seriously, what would dealers and large hedge funds do without such hijinks? And so, the obligatory stop run, right here before 3 NY time, that sees the high give way and then some PIPS added to the upside above 109.500. Can’t move 15 PIPS in the last 10 hours, but now more than 15 PIPS in 10 minutes; of course, buying this is crazy, cuz there isn’t going to be anything behind it … it was a stop hunt, just like yesterday on the downside; today it’s the upside. Like I’ve said before, every day in this stuff is a new day in terror, and the crap that gets pulled every day from the last hour of New York to the open in Asia is ripe and fertile ground for manipulation.

Both Grandma Yellen & Super Mario speak tomorrow at Jackson Hole, and while both camps say nothing new will be said, we’ll see about that; should be an interesting day. Onward & Upward!

PAMM spreadsheet directly below.

Time for the beach … dog and I are outta here … until tomorrow.

Have a great day everybody!



Wednesday, August 23, 2017


“OMG!! … I’m a “racist” cuz I got a signed Bob Lee baseball card!!”

You simply can’t make this shit up … after reading the other day that a “learned” Ivy League Prof says the sun is “racist” cuz the solar eclipse path is outside any major city, therefore it hates black people, now comes ESPN, the world-wide leader in losing sports viewers, changing the announcer of a college football game cuz he’s an Asian named Bob Lee … 2 +2 = 22 for Liberal Snowflakes who might be “triggered” thinking of Robert E. Lee, the confederate general of 150 years ago, while watching Bill & Mary play U Va. in a college football game. EXIT QUESTIONS: “Were there gonna be counselors available for those who needed help when they heard his name? Did they think the suicide prevention “hotline” office was gonna get overwhelmed with calls? And finally, how pathetic is ABC/ESPN; are there bigger jackasses anywhere that can match the utter stupidity of this corporate decision? … outside of Facebook, Apple, & Google, of course”.

Well, I’m “triggered” all right … cuz I’m thinkin’, wait a sec … holy racist crap Batman, I got a signed autographed “Bob Lee” baseball card from back in the day … using the flaming idiotic logic of the Left, that means I 100% support and defend the Confederacy … I called the suicide hotline, but it was busy! … now what, there’s nobody to talk me down but the dog, and all he wants before I jump off a ledge and end it is more ice cream … OH, the horror of being “woke”!

Turning to today’s market … I tried to warn people yesterday about getting “euphoric” over a supposed Republican “tax plan”; counting on these doofus noodles in the Senate, you’d have better luck with the Illinois lottery, and that’s if they paid you off! And how about the complete bullshit yesterday, where USDJPY had more activity after the New York close to the Pacific Rim open [3 hours] than they did in the 14 hours from the European open to the New York close that saw a 30+ PIP spike up? … no, no, can’t have that during market hours, cuz the SP500 might go even higher … let’s wait ‘til nobody is around and then do it.

Which of course brings me to today … needing something to blame the stock indices decline on last night using president Trump’s rally in Phoenix … truth is in bear markets, sharp vicious rallies are the norm and then they just drift away, but of course that can’t be the narrative going forward, cuz nobody in the press or at the FED could ever possibly conceive of that option … gimme a break.

USDJPY action a complete mess … we got the straight down move out of Europe into the U.S. … no retracements and by default no sell signal … then when the manipulators open stocks at 9:30 … well, you can forget the SP500 falling any further, and therefore it’s “stall time” in USDJPY. I realize it’s August, but this is pathetic. So, it’s nothing but a slow crawl up 10 PIPS, a slow crawl down 10 PIPS, and from the 35-ish PIP range out of Europe, we’re sittin’ right in the middle of a nothing burger. And do I really need to tell anybody, that in any market that is basically “dead”, there isn’t an algorithm anywhere that can trade and make money?

Here in the late afternoon, a possible algorithm short in USDJPY, but again I have to ask the question, “Where’s it gonna go? We haven’t see any range to speak of since Europe opened, and while negative all day, the 109.000 area is proving very tough to crack … so, in USDJPY style, they go to  new low by less than a PIP and it’s straight up from there … here, late in the day, I don’t want to get caught in this crap with no time left, cuz if it rallies I’m toast with no possible way of making it back in a little over an hour; so, while I risk $400 to make $100, that doesn’t seem worth it to me. And that’s why I passed on it.”

As I have said before, USDJPY is basically a terrorism event every damn day … it’s never an easy trade, and the spikes can be killer if you’re on the wrong side; but when it “glacial drifts” it’s impossible to trade, and that’s what we have now with about a half hour to the close. Looking ahead to tomorrow, 108.60 and then 108.30 important key support levels, that should they give way projects a lot lower … that would coincide with gold going over $1300, and the SP500 & Dow30 getting tanked back down to their support, with the key 2420 and 2400 levels in the SP500 that better hold or there is big trouble coming from the “sell side”.

But frankly, this has been one frustrating day … no trades today, the market simply is not moving in a satisfactory manner to justify trades … the slowest moving declines, followed equally by very slow moving rallies … and an SP500 market that offers zero guidance cuz it’s done nothing the entire day. Add to this, USDJPY putting in new lows by a couple of tenths, then rallying, then rinsing & repeating over hours until the up spikes show up and clean the shorts out. I don’t plan on being one of them. So, Jackson Hole starts tomorrow, and over the next 2 days should provide plenty of rumor driven moves into Yellen’s speech on Friday; buckle your seat belts cuz I have a feeling we’re looking at either 111+ or sub 107 here shortly, and what we are witnessing now is nothing more than passing through the eye of a hurricane and the market is dull & boring … trust me, that will change very quickly. But, until the fireworks start, I’m keeping the powder dry, cuz in my book it makes no sense risking money for very little reward. Onward & Upward!

PAMM spreadsheet directly below.

Time for the beach … dog and I are outta here … until tomorrow.

Have a great day everybody!



Tuesday, August 22, 2017


“I looked up “Liquidity Provider” in the Dictionary!”

I think it’s a good day to do an anatomy class on “The Tunnel Method”; specifically, what is it we’re looking for, I can sum it up visually with 2 charts directly below in USDJPY. First, the short side, and then the long side.

Granted, these are near perfect examples, and in real trading they don’t have to be nearly as perfect as depicted above; the slopes could be a little flatter, or the moves not as strong … but generally speaking, something along the lines of what you see above. I ask the question in the charts, and the answers are pretty simple; “not very long”, maybe on the order of 1 minute to maybe 3 – 4 to be ideal. Cuz if the market stays in the tunnel [or slightly above/below it] too long, 1) it works off the momentum in the market we want to take advantage of and capture for profit, and 2) it allows time to catch up to the market; neither would be helping us in either position.

Turning to today’s market … of course, when the stock indices “get in trouble” look for the rumor mill in Washington to come to the rescue; you think this mornings announced “tax plan” on the open was coincidental or accidental? Sure. Cuz if there’s one thing you can always count in  from indices markets, it’s that the Pols and the faculty lounge Twits who control the CNTRL-P machine, will always have the backs of the TBTF banks and trading firms. So, take the usual suspects of Vampire Squid & assorted other scumbag LP’s, dealers, and extremely influential hedge funds who were buying stocks during the recent decline, and within 30 seconds start the rocket move up on panic short covering aimed solely at allowing the friendly folks at Squid to sell them back to you … for a profit of course. WTF.

And of course, through all of this massive stock panic to the upside, you think USDJPY can do anything? Market was at 109.28 early last night … it was at 28 around midnight … it was at 28 early this morning … it’s at 35 right now as I write, and hasn’t had a 30 PIP range in 16 hours … all the while, the algorithm can’t get out of the way to a market that has no idea what it wants to do … except get you to buy the high and sell the low cuz it’s not reacting today with the stock indices or anything else.

In essence, today has seen a miniature “Flying Wedge of Death” [FWD] in USDJPY, and while price is going back and forth between 109.28-ish to about the mid to upper 108.45-ish area [oh, it just peaked its head above 109.50 … got squished from there], the algorithm lines are flat with almost no tunnel to be seen, and price has been over/under the tunnel dozens of times today. The algorithm by design, at its most optimal use [trades initiated back through the tunnel boundary during a corrective phase], really does an excellent job of defeating the FWD … not entirely, nothing can do that … but very good most of the time. Remember, as long as white is above aqua, you can be long, and as long as white is under aqua you can be short; there isn’t any rule or directive that says you can’t add to a position, make a new one, or wait to liquidate on a spike up or even at the pre-defined “profit areas” … all the algorithm says is that its “optimal & best use” for maximum profit is defined through the 2 examples I gave at the outset.

Late afternoon, and I’m calling the markets bluff … fish or cut bait. The SP500 is up massively, over 25 index points, and USDJY can’t hurdle 109.500 and stay there, let alone take out the high. One trade to see if the market can go higher; and while it did momentarily, it forced me out when it came back .., I had no choice but to liquidate to protect the position from loss. The proposed “tax plan” from Repubs has got the SP500 on fire to the upside … maybe the main reason USDJPY isn’t buying it, is that they know that anything Congressional Repubs have planned on doing, is almost 100% guaranteed to get screwed up and disappoint, given their track record … they’re a bunch of wimps and the other markets know it. This is the main reason I haven’t attempted to buy Dow30 today … I don’t trust the gain, and the market hasn’t backed off since the open. We’ll see what happens, but if you’re counting on Congressional Repubs to “bring home the bacon”, I hope you’re not hungry.

I mean, how high does the SP500 short squeeze have to go to get USDJPY higher? First we’re in the 40’s, then the low 50’s, and so far the high at 2456-ish, and USDJPY can’t move higher … sellers stacked all the way up … and then get the SP500 to back off with a ½ index point downtick, and USDJPY slides 6 PIPS … 37 minutes to get it up, and 3 to bring it down … this is what happens when everybody who is long suddenly realizes it’s not gonna go through the high at 54 and hits the exit gate all at the same time.

An algorithm buy signal, here starting the last hour of trading, but 1) where’s it gonna go on the upside given we haven’t really moved the entire day, and 2) where’s it gonna go to give me profit? … Yea, I dunno either, cuz to me right now, being long looks and feels like a real battle to get it higher, with stacked sellers all the way up.

Here late in the day, they finally take out the stops (mission accomplished!) … big whoop … now it’s right back down to 53 … whatever, a terrible trading day today, a new meaning for the word “slow”; no range, FWD in full effect from European open; vicious spikes to clean out stops on both sides multiple times today, and volume was very thin and lackluster. Tomorrow is another day of opportunity. Onward & Upward!

PAMM spreadsheet directly below.

Time for the beach … dog and I are outta here … until tomorrow.

Have a great day everybody!