FX GOES FULL RETARD

 

“Here are your long partners in EURUSD … can anything possibly go wrong?”

Well, we’ve officially entered “ugly land”, meaning the recent FX insanity isn’t going to end well … count on it. And now, with everybody & their brother long EURUSD and everything else including Cable, Super Mario takes center stage tomorrow morning with the ECB Central Bank interest rate decision, and of course the all important presser.

One of two things is gonna happen tomorrow; 1) Super Mario keeps his word of the last 6 months, and totally destroys EURUSD bulls with a multiple “sigma” dovish presser, that makes no bones about EURUSD being “too damn high”, and maybe even warns the market not to test his patience, or 2) he’s OK with the current level of EURUSD, and all that he wants is for it to be “orderly”, thus insuring it ain’t and within about 10 days we’re sitting at 1.28. I simply don’t think he can “thread the needle” to keep things in check; if he chooses option 1, the scumbag LP banks, including Vampire Squid, will be happy, and if he goes option 2, he stabs the scumbag LP banks in the back.

And yet, knowing full well everything in FX is “extended”, traders keep piling into the “momo” trade as if there are no worries … “yea, good luck with that, cuz this ain’t the manipulated SP500 or the DOW30, this is FX”.

“Well, that escalated quickly didn’t it”? Seems our very own Treasury Sec. just announced in Davos, that the U.S. “welcomes a weaker U.S. Dollar”. Well now, that changes the calculus for everything … is he doing this now to upstage Super Mario tomorrow? Cuz quite frankly, it just might not make any difference what Super Mario says cuz the “weaker dollar” mantra is out in the open, and that’s gonna trump [pun intended] anything the ECB does tomorrow short of direct intervention … something they almost never, ever do. “Oh, won’t tomorrow be interesting”?

 

At this point, it’s worth remembering how FX operates … you hopefully remember the “Christmas Day heist”, you saw it with the Apple repatriation BS, in very late New York … you even saw it last night in early Asia with the “total phantom mystery tick” low in EURUSD of 1.22900, where the scumbag LP’s didn’t even show the downtick on the tick chart … no, they went from 1.22990 to 1.22900, and then next bid a nanosecond later is right back to 1.22990 … My point is this: “beware the shenanigans of the downside stop hunts, the mystery ticks from nowhere, and otherwise overall total bullshit from the scumbag LP’s during late New York and into early Asia … these parasites are thieves, and they spend every single day trying their collective damnedest to separate retail specs from their money any way they can … do not buy breakouts on the upside, and do not sell breakouts to the downside; use breakouts to liquidate for best prices”.

I have stated in the past that POLS, when they open their pie holes with news, take center stage and pretty much negate rules & procedures … this is cuz they most often induce panic and/or policy shifts. Well, now that the dollar decline just got the U.S. “good housekeeping” seal of approval, this decline is nowhere near over, Super Mario notwithstanding … use early breaks especially on down spikes to get long; wait for the first green M1 after the decline and go for it … right now, the algorithm is too slow for good fills, and the market is very quick to be bid by those stuck. In essence, this explains Cable’s gargantuan rise today, along with a very good down move in USDJPY … EURUSD bringing up the rear, no doubt due to the ECB meeting tomorrow holding many a trader back. Outside of any direct intervention, any modest to heavy moves lower can be bought for the near future. “And no, down 11 PIPS in 4 minutes isn’t considered a down move … I’m talking about 20 – 30+ PIPS in EUURUSD, where the final leg down comes on some kind of spike lower; the bigger the better … only late day drops [after 16:00 – 17:00 server time] do you not buy; those can get you into big trouble in the New York afternoon”.

From late yesterday’s price action, I certainly did not see this move coming in EURUSD today, right before the ECB meeting, although I didn’t expect Treasury Sec. Mnuchin to Pie Hole away and not only say it’s OK for a weaker dollar, but that he “welcomes it”. Not just “Oy”, but “Oy vey”! Who knows where this short bloodbath ends, or where the banks step in and trap the “Johnny come lately” longs. Now over 1.24000 [for how long who knows], this could very well get very ugly … not only for shorts, but for longs also … never forget who we’re dealing with, and what their purpose and goals are … they aren’t yours!

EURUSD was pretty much “dead in the water” up to Mnuchin’s comments in Davos … after that, very slim pickin’s to find a place to get long with confidence … I’m hoping this stalls soon, and that the Asian session shows some kind of pullback on long liquidation … I’m not confident we’ll see it, and if early Europe tomorrow doesn’t see some, then I don’t think anything Super Mario says will make a lasting difference … maybe some profit taking [thank you CNBC’s Bob Pisani], and then it’s off to the races again and within 15 minutes nobody remembers what Super Mario even said.

Only one trade today … the entire day like bull fighting blind folded … like I said earlier, a pretty dead market until Mnuchin hit the news wires; after that, I just looked for any weakness and once up on the trade, had a very quick trigger finger at a new high … when it backed off I liquidated. PAMM up a few dollars short of 0.1% on the day … and while I would love to “ride the profit pony”, I’m not ever going to sit here and let something I’m up on, turn around and bite my donkey just cuz I want a pony ride … at these very extended price levels, that’s an invitation to disaster … as I’ve said before, it simply doesn’t matter what happens next, I’ll evaluate the next trade when it comes … just remember for your own trading as well, “any Chimp can manage a winner; question is, though, how do you treat and handle risk? Money you don’t lose by doing “stupid shit”, like buying/selling breakouts [that’s the place to liquidate if it stalls, not enter a position], is your next winning trade … think about it; trust me, it adds up”!

Once we get into the New York afternoon, I’m not bashful about saying, “I want no part of this clusterfark! … I’m simply not interested in getting caught in some scumbag LP bank spike from nowhere in EURUSD, and today we’ve had a ton of ‘em”.  Thanks, I’ll wait for Asia and see what happens, and then early Europe is on the docket … trading most likely will be OK up until about 2 – 3 hours before the ECB meeting; if the trades dies sooner, then so be it, I’ll wait it out to the ECB meeting & presser … after that, it’s likely to be severe “rock & roll”. In any event, we’ll see what tomorrow brings and how it all shakes out … it’s an early exit today & I’m outta here … until tomorrow me amigos! Onward & Upward!!

PAMM spreadsheet directly below.

  

Have a great day everybody!

-vegas

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