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Tuesday, February 6, 2018


“Misspells word … understates Indian threat … long stock indices!”

Every generation of trader and/or investor, the difference between the two, of 
course, is that investors hang on to losers and traders don’t, get to relearn the 
meaning of the word “risk” … as I have said before, throughout history, only 
the names change. “Well, that escalated quickly didn’t it”? Checking the 
scorecard and surveying the damages, we got BTC [Bitcoin], world stock 
indices, and a blizzard of VIX ETF’s [Exchange Traded Funds] & ETN’s 
[Exchange Traded Notes] that are either severely damaged in price, or 
downright dead in the water … billions upon billions lost in less time than a 
4 day weekend.

As long time readers/clients know, I’ve said since last summer that the stock 
indices were a complete train wreck waiting to happen … that the complete 
and utter destruction of those markets by central banks, so smug in their 
hubris of being able to control volatility via manipulation, would be a 
nightmare when it ended. Was there any doubt it would end? Add “crypto” 
to the list, and watch in horror as your new found “tulips” wilt away to 
nothing. Welcome to risk, up close and personal … where it’s a fuzzy concept 
as long as the “pain tolerance” isn’t too bad … but after the “Genie” is out of 
the bottle, controlling it is another story altogether, cuz you won’t be able to. 

Then, once you wake up and “smell the coffee”, it’s too late … looking back, 
you get to be like all the others back through the centuries and millennia, and 
cry in your milk. Now maybe, you understand risk and why it’s so damn 
important when you make trading a career … any Chimp can control a  
“winner”; how do you control risk and navigate the terrain, so you can be here 
in the future instead of back in the “Pudding Business”?

And through it all, you can count on the scumbag LP’s to 1) raise slippage 
levels on fills, 2) widen the bid/offer spread, and 3) fill the marketplace with 
all kinds of mystery ticks and stop hunts. And as I have stated before, and will 
keep repeating until you recite it in your sleep, “it’s the setup stupid … nothing 
more, nothing less … get the setups right in the market you are trading, and 
success over time is a slam dunk”! Trade on news, your efforts as an “analyst”, 
or what some assclown on CNBC says … “well, you’re toast Skippy, that’s all 
there is to it”.

Turning to today’s trading … overnight saw the usual Chucklehead suspects in 
Asia, do what they do best, and that’s bid anything higher … of course, when 
they’re done they get it shoved up their collective donkeys until their teeth hurt 
… it’s what they do, and never seem to learn the lessons of trading. I said 
yesterday, the key here in EURUSD is the 10 YR. Bund rate … any sharp 
selloff in EURUSD almost has to be accompanied by a reduction in yield and 
the subsequent “flight to quality” in 10 YR. paper … map today’s EURUSD 
moves against the 10 YR. Bund, and you’ll see what I mean. And in case you 
missed it, since Turnkey Forex doesn’t offer government bonds on the MT4, 
HOT Forex does, and you can easily open a demo account and follow US, UK, 
and German 10 YR. government paper via the CFD’s. [And just as an aside, 
take a look at the HOT Forex spreads and RT commissions versus Turnkey 
… why anybody would trade there is a mystery to me, unless you like giving 
 money away.]

With the semi “crash” in stock indices, and the fact EURUSD is in its 
attempted 8th week of moving higher, it’s not gonna be easy to get the “bull 
ball” rolling again to the upside … we need to see at least this week, and 
more than likely 2 - 3 weeks of backing and filling in EURUSD price that 
threaten sell stops on the downside … sure, we’ll get the rallies, but they will 
be brief and won’t have the “legs” we’ve seen the last 7 weeks … simply put, 
it’s probably gonna take a while before this stuff challenges 1.25380 again 
and is able to move higher. In addition, any threat to Merkel’s coalition 
government with the SPD that falls apart, and you can kiss the bull market 
in EURUSD goodbye … so, plenty to keep your eye on and be cognizant of 
the ramifications, all the while evaluating the “setup” to make profitable 

One trade today, as we caught a move higher … PAMM up 0.3%.

All I can do is laugh at the way stock indices are trading … here at the NYSE 
open, a strong rally … the absolute worst thing you want to see … early buyers 
are chumps at the poker table, cuz when they are done tripping over 
themselves buying stocks again in the familiar BTFD mode, the sellers show 
up and take it lower … my point is simple: understand and learn the setups for 
bull & bear markets, and never buy rallies or sell breaks … patience & 
discipline is the key to doing this, and last I checked, these two qualities are 
free to everyone. 

Because of the great unwind in world equities indices and the spike in volatility 
across the board, things are getting a tad “nuts” on the trading conditions 
front; no matter your market, spreads and slippage are up “bigly & yuge”, and 
nothing is being spared the carnage. Both Cable & EURUSD right now are a 
crapshoot, and no move is lasting in duration. It’s a good time to back away 
some and let the dust settle, and not do “stupid shit” and let the scumbag LP 
banks clip you in the afternoon New York trade … if it’s like this just before Noon, 
wait ‘till any of this stuff gets to the New York close today … ice your machine 
down, it’s gonna be a wild afternoon. In any event, they’re gonna do it without 
me, simply cuz “risk” [there’s that nasty four letter word again] is in orbit and 
looks like it could get worse this afternoon. We’ll see what happens tomorrow 
… I’m outta here … Onward & Upward!!

PAMM spreadsheet directly below.




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