TO THE MOON ALICE

 

“When Ralph learns Alice was short EURUSD!”

Well, as Yogi Berra once said, “It’s déjà vu all over again”; third day in a row EURUSD is either catapulted sharply higher or lower via news. Today’s culprit, the news Angela Merkel has formed a new coalition government, thus saving her from certain defeat in a new election. And while I’m sitting here, knowing full well today is the “make or break day” for her, when the news hits the wires, EURUSD promptly “moonshots” from 1.20800 to 1.21150 in a scant couple of seconds. All I can say is, “Oy”.

Coming into today’s session in Asia, the Chuckleheads did everything wrong; literally 5 minutes into the new day, and already they’ve “mini-moonshot” EURUSD from the 40’s to the 60’s … “well, this is not good, cuz these clowns are never right … they buy highs and sell lows … why should today be any different? … back to bed for some shuteye and be back near the European open”. And of course, 5 hours later EURUSD is sitting in the 50’s doing nada.

I know today is critical for Merkel, and I also know 2 big stats are due for release from the U.S. @ 8:30 EST; the longer it takes into the day for an announcement, the more the likelihood it won’t be bullish for EURUSD … “well, that escalated quickly didn’t it”? … and now we find ourselves in the exact same situation we’ve been in the prior 2 days; which is, the range eaten up by huge news spikes, followed by nothing but very sharp “chop” … hours later, the market is about the same place it was after the announcement. In other words, unless you think today is “special” and we’re likely to see a massive “multiple sigma” range from normal [very unlikely], you better be fast on your feet, cuz whatever rallies and breaks there are going forward the rest of the day are likely to be 1) very sharp, and 2) reverse just as quickly with 3 – 7 PIP spikes in your face. And we haven’t even gotten to the U.S session yet.

This seems as good a time as any to remind traders … especially Newbies … “while FX crosses can go “bat guano” for hundreds, even thousands of PIPS, the U.S. dollar pairs are a different story … trees don’t grow to the sky here, and as nice as it would be to capture these news spikes, wait until you’re on the wrong side of one, and then write me and tell me how long it takes to make it back … it’ll be longer than you think … My point here will be painfully blunt for some: scumbag LP banks will find a way to foil current longs; stops will be hunted and slaughtered at the appropriate time … they got all the money in the world to hang on and then get help from the central banks … my guess is, we’re days away from “comments” from some Apparatchik in the E.U., that the current EURUSD rally is “overdone & extended” past what is warranted … sell stop city here we come, and remember you heard it here first … I’m not sayin’ I’m looking for a big drop, cuz I’m not; what I am saying is this is a “2-way” market, and trust me when I say this, the scumbag LP banks will find a way via stop hunts, spikes down, mystery ticks, and God knows what else in the “shenanigans department” to cover shorts and force longs out at disadvantageous prices. So, be careful, and remember, we are traders not analysts … it’s all about the ‘setup” and nothing else; forget the news [after the fact], cuz when it’s out it’s over and done”.

And for those that need a reminder of just how “squirrely” EURUSD has become this week, directly below the M30; take away the huge 3 “news spikes” in a second, and what do you have …  big bowl of slop is what you have.

   

 

EURUSD is at or making new highs here, about 40 minutes before CPI & retail sales come out at 8:30 EST; the entire world is long, and seems not to care about what’s going to be released. If those numbers come in “hot”, suddenly they will care.

Ok, U.S. numbers out, and not hot or cold, pretty much in line with consensus forecast by the analyst community of retards. A few observations; 1) congrats to the longs, from the 20’s & 30’s, who stayed long looking for more, and all got their sell stops filled at 17 [or very close], 2) congrats to the Jimbo corporate whack-jobs, who then subsequently order flowed the market up to 1.21489 within 3 minutes from 17, and then got it shoved up their collective noses … “nice job guys, this is why they pay you the big bucks I guess”, and 3) that high of 1.21489 sure looks and feels like a short term top to me … fast, vicious, and ugly, and now add to that a double top. All I can do is shake my head at this crap, and wonder out loud the insane level of stupidity on behalf of the trader community. “Of course, trees grow to the sky … don’t they”?

What I’d like my readers to focus on, though, is the “DEFCON 1” level of intraday volatility present after the report … the algorithm is almost useless, simply cuz every signal you get is 8 – 15+ PIPS away from the short-term low, and if you take the signal, you’re buying the spike up, which is not a good idea … throw a loser into this mix and your down 15+ PIPS quickly. Quite frankly, making money in this kind of “hyper volatile” mix is very difficult, simply cuz it only takes a couple of losers to wipe out 5 – 7 winners if you’re lucky. And through all the “hysteria”, 75 minutes after retail sales & CPI, EURUSD is exactly where it was before the report … except of course, for the detour down to 11 on BANK DRIVEN stops so the banks can cover shorts.

I came into today from the Asian session, really focused on risk, if in fact Merkel couldn’t form a government … what would the damage be, and at what level do I step in … from Asia, a rather tight range reflecting this risk really, and my thoughts were a formed coalition government was “baked into the cake” … stupid me. What really surprised me, though, was the market leaped from the 80 level, right to 1.2115, and never looked back. Talk about “panic”, this was it.

So, here at the European close, and heading into the New York afternoon, unless we get some kind of break below 1.21110, it very much appears the world is going to go home the weekend long a shipload of EURUSD; not only is this insane, it’s stupid. EURUSD “trades”, it doesn’t trend very well … oh sure, you get periods where it will go straight up/down, and now we’re at a 3-year high, but the market is getting way ahead of itself via the ECB minutes, just like Cable did back in the Fall of 2017. To think it’s just gonna be “up and away to the sky” is plain dumb. If the Chuckleheads in Asia can take it lower to start the week [MLK Holiday in U.S.], look for the bids to return when it’s over.

I only made one trade today … after that, minutes later SHTF and it was “panic city” to the upside. As it was, a slightly smaller profit of approximately 0.2% … after the Merkel “melt up”, there’s nothing but back & forth until the U.S. numbers at 8:30 EST … and everybody has seen that debacle, both down and up … since then, a complete clusterfark of spikes up and down, alternating like a yo-yo on steroids … this is not an environment conducive to making money … quite the opposite, and as I stated earlier, when you get this level of extreme volatility, the algorithm is useless, cuz signals are too far from the bottom at the plum/yellow cross; make that trade, and the one nice move the algorithm caught was overwhelmed with losses on all the others … you simply have to know when to back away and put your hands in your pockets.

It’s very easy to get caught up in all the emotion of a market exploding, cuz every fiber of your being wants to play … that is, until you get whacked from the hyper volatility; then it starts to dawn on you … “WTF am I doing giving money away to the bank so easily, when there are infinite days ahead to play by my rules”? Sure, I like to play, but what would you say if I got caught on the 2 big downdrafts today with volume, and we’re down 5%+? Long on a big up day with sizeable losses, how does that happen? It happens cuz the “setup” isn’t right, and you went ahead and did it anyway cuz you wanted “to play” … well, the bank says “Thanks”.

On Sunday night I’ll be posting the raw data for the “Summary Volatility Table”, along with a post on the analysis of EURUSD & USDCAD. Monday is a Holiday in the U.S., but that won’t affect Europe … my hope is they don’t open this stuff and take it higher, cuz that’s only gonna lead to a very ugly ending … best case scenario is for a lower open and a light long liquidation that can see us get long from lower levels … right now, the 1.21100 area should hold, and if that doesn’t the 1.20800 – 900 area would offer good support. Unless there is something “in the weeds” coming over the weekend, or early in Europe, I would be very surprised if those 2 support areas get taken out and the market simply moves lower … I don’t see that happening.  Next week looks to be volatile as well, and with some liquidation of long positions by the trade, and an opportunity for us to get long on that weakness, a very profitable one as well. Now that we’re entering the New York afternoon, and Europe is closed, I want no part of this “chopfest” the market has in store for everyone; whatever they decide to do, they’re gonna do it without us … I have no desire to get “whipsawed” by some bank late on a Friday. Onward & Upward!! … I’m outta here … until Sunday night mi amigos.

PAMM spreadsheet directly below.

And just as I go to post, in the last couple of minutes, EURUSD goes from 1.21540 down to 1.21250 in 2 minutes … now maybe you will understand what I’m talking about, cuz if you got caught in that, there’s no way to make it back this afternoon. As I stated before, “the scumbag LP banks will find a way to completely hose the longs that stayed too long at the party … it’s what they do, it’s who they are, it’s how they make their money … refuse to donate”!

Have a great weekend everybody!

-vegas

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