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Friday, November 24, 2017

FX CALLS IN SICK

“Well, that certainly isn’t any FX pair, now is it?”

There’s pathetic, and then there is downright sad … today should have been cancelled; in the immortal words of Art Cashin of UBS, “today was a waste of a clean shirt and a tank of gas”. I thought there might be a chance for some movement near the European open, but the ranges coming out of Asia were so small and tiny, relative to normal conditions, that anything that might occur could be the start of a reversal, double reversal, or worse the “Flying Wedge of Death” [FWD], and then how do you escape from that crap once the clock starts ticking down? [Hint: you don’t.]

Technically, there’s still some time before Europe closes, but as far as I’m concerned, this day is over … put a fork in it, it’s dead! … volatility 70% lower than normal, and that’s saying something. Range for Europe today in GBPJPY is about 30 PIPS, where the norm sees about 100 PIPS. These are known as “Holiday weeks”, in case you’re wondering, and why traders hit the exit gates early in the week. Why hang around for this?

On Sunday night, I’ll have an update for GBPCAD, with the 8 HR. & weekly data; I think you’ll be surprised … I certainly was, and even today, this pair put in approximately a 100 PIP range. The numbers are terrific, and compare very favorably with GBPJPY, and that is all the more impressive since I’m not tracking the North American afternoon [08:00 – 16:00 server time] … take part of the 16:00 -18:00 afternoon, and GBPCAD would be more volatile than GBPJPY, without the LP games being played in USDJPY via the correlation with XAUUSD [spot gold]. To be sure, every FX pair has its moments, and that goes for GBPCAD, but for the most part, it foregoes the dealer BS and is a pretty smooth trade relative to GBPJPY …simply put, it trends better. No better example than today directly below.


As you can see from the M1, three white arrow buy signals, and the market is trending higher … profits could have been liquidated on either short term weakness in the M1, or using the SAR [white dots]. In any event, a nice trade setup. When was the last time we saw this in GBPJPY, which is turning into a nightmare chopfest?

In addition to GBPCAD, I’m also adding the pair GBPCHF to the mix, giving us “The Magnificent Seven” to trade; there will be Appendices for each of these markets available shortly [next week or two], and starting in 2018, they’ll all be updated quarterly with 8 HR & weekly data, so everybody can stay on top of everything. GBPCHF isn’t quite as consistently volatile as GBPCAD, but it has a history of some extremely wild swings [EURCHF debacle in January 2015, and the GBP debacle on 10/6/2016 to name just two.]. In any event, they are 2 very good non-correlated FX crosses that move. I’ve looked at every other pair in the MT4 mix, and for the foreseeable future, “The Magnificent Seven” will be our focus. I’ll have much more on both pairs Sunday night. Now that this disastrous volatility week is behind us, let’s hope trading conditions improve starting Monday.

Obviously, I didn’t do any trades today … between LP’s bagging fills, and the “herky-jerky” bid/offer changes, any trade today is a guaranteed loser 2 seconds into the fill … nothing to do here except marvel how slow and pathetic both daily & weekly ranges are in these “volatile” crosses … ain’t no volatility here this week! To illustrate how bad it is in GBPJPY, since the start of 2015 [about 300 weeks], there have only been 10 [including this week] weeks where the weekly range is UNDER 200 PIPS … this week marks the third week in a row of sub 200 PIP weeks! And this week, with its 173 PIP range, is the worst week since July 2014 [not counting other Holiday weeks].

Well, I see as I write, that GBPJPY has suddenly made a new high on vapors… wow, now since Europe opened, its got a 50 PIP range [normal is 100 remember] … I guess dealers needed to click off a few stops before they go shopping later today. I hate these kinds of days, cuz it’s nothing but a stop hunt [both sides], and like I’ve said before, you get caught in one of these and you’re toast, cuz there is no way to make it back in thin conditions. Next week sees the start of more normal trading [let’s hope] … I’ll be raising my volumes and if GBPJPY stalls, look for some trades in GBPCAD to pick up the slack; until Sunday night. Onward & Upward! PAMM spreadsheet directly below.


Have a great weekend everybody!

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