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Thursday, March 1, 2018

THE “FEAR” OF THE FEAR

“That fear ship sailed a long time ago Donna!”

Markets pick up “memes” all the time … they come and they go, but right now, 
the 800 lb. gorilla “bogeyman” is higher interest rates. You would think, but 
that would be too easy, that the 10YR. Bond futures market would be the place 
that the “fear” of higher interest rates would manifest itself … “well, you would 
be wrong, cuz the market where the “fear of the fear” is most visible is the SP500 
market, and every big money financial market participant on the MT4 right now, 
has got their eyes glued to what this index is doing, and whether it’s melting down, 
or behaving itself by going up”.

Most traders still don’t understand the modus operandi of the “Plunge 
Protection Team” [PPT] in stock indices; it isn’t to absorb the selling … hell, 
they aren’t gonna step in front of a wave of institutional selling … no, 
they’re  “job” is to punish the bat guano out of you when you’re done by 
ramping stocks higher after it’s over, thus making you look and feel like an 
idiot for the panic you sold into … nothing like sharp losses, and when 
you’re done, the market explodes back higher … “yes, your hedge fund clients 
will be thrilled to see you sold the bottom … nice job Mr. Expert”!

There are a million ways for the central bank manipulators to hide lower rates 
on the 10YR. Treasury … the FED, for one, simply buys futures contracts and 
takes delivery of bonds … all they gotta do is hit the CNTRL-P button and 
print the money; sooner or later, though, the reality will eventually sink in if 
higher rates are in the cards, but not so when it comes to stock indices, where 
fear manifests itself quicker than any other market … that used to be the job of 
the gold market, but that market is so heavily manipulated to the sell side, and 
they’ve lost so many traders to other markets, it’s simply a ghost of its former 
self and has become almost irrelevant. 

But here’s the thing you need to understand; “it’s not the fact that interest rate 
increases are being reflected, in a 2nd derivative sense to the stock indices, cuz if 
you’re trading anything in FX right now, just cuz the SP500 is higher doesn't
 necessarily mean EURUSD is gonna be higher as well … the CRITICAL KEY, 
is the “GAMMA” of the fear of the fear index [SP500]; in other words, it’s the 
rate of change in the fear of the fear index that matters. For example, the SP500 
is only gonna affect EURUSD as it’s “screaming” in one direction or the other 
… when that rate of change slows down, if you’re in a position, you got to 
liquidate; cuz if you wait, you’re gonna be toast. That’s what “GAMMA” means 
… and when it goes down, the market is gonna either top or bottom out. This is 
what matters, and you must know this to be successful … it’s not enough for 
stock indices to be inching along … they got to be screaming to be effective!”

Scanning the markets today, even the Chuckleheads in Asia look to the SP500 
first before they ramp EURUSD higher, cuz they think “risk on” is back in play 
… of course, these morons are wrong 90%+ of the time, so maybe they need 
another yardstick, The problems start the second these markets decouple, and 
it makes for some rowdy trading sessions as we’ve seen these last weeks, cuz 
there are still an awful lot of traders, who like Generals, are fighting the last 
war.

And from a volatility perspective, it’s only gonna get worse, simply cuz the 
FED has painted itself into a nasty corner trying to massage the bubbles 
they’ve created to deflate “softly … yea, good luck with that, as I’m sure 
everybody will exit in an orderly fashion … if we do in fact get 4 more interest 
rate hikes in the U.S. in 2018, I can almost guarantee a world-wide depression”. 
And the impact on the U.S. Dollar and equities will not be kind & gentle with 
low volatility.

Turning to today’s market … “hang on, let me check the SP500 first” 
… extremely low ranges overnight, as it appears nobody wants to play in 
EURUSD until U.S. stocks open … the entire MT4 universe of markets now 
held hostage to the ups & downs of the SP500 … and getting caught positioned 
in FX, on the wrong side of a stock indices melt up or “Thelma & Louise” only 
exacerbate the moves in whatever FX pair you’re trading. We’re not quite 
there yet, but the European session is becoming a joke; they’re simply “passing 
the buck” to the U.S. session and in essence saying, “hey, we don’t have a clue, 
here you do it … go ahead and do what you want”. And of course, the New York 
based scumbag LP banks will be only too happy to oblige.

FED Chairman Spicoli speaks again today … “can he put his foot in his mouth 
again for the second time this week and rattle markets some more”? With all 
that’s going on today, it’s apt to be like waltzing through a rose garden naked 
and blindfolded. “Well, that escalated quickly to the upside, didn’t it”? All it took 
from Spicoli was the phrase, “I don’t see any wage pressure right now”, in his 
Senate Q & A clown show, and BOOM!, the shorts in EURUSD are scrambling 
for cover.

Yesterday, I mentioned a market’s “fingerprints” as an important criterion you 
need to think about in your trading … in EURUSD, as I’ve discussed in earlier 
blog posts, it has a retracement “fingerprint” in the range of 15 - 30 PIPS the 
majority of the time, before the trend for the day resumes, and has the most 
popular time frames of the cell values greater than 13 on the “Cardinal Cross” 
of Gann’s ‘Square of Nine’ table. Directly below, another example of how these 
cycles play out during trading, from earlier today.


And for newer readers, directly below the website URL to create your own 
‘Square of Nine’; simply enter your start number [1], and how many levels out 
you want the table to be.


When POLS of any stripe talk, markets get roiled … “why should today be any 
different”? And here around Noon New York time, we’ve been in a tight range 
with the “Flying Wedge of Death” [FWD], and now new highs for the day
 … EURUSD has been to the highs and lows multiple times, and the highlight 
for the day has been the vicious down spikes off every rally. And now that the 
scumbag LP banks have run the buy stops, the market retreats … same old 
shit, different day.

Markets are tough enough on their own, but throw in a new FED Chairman 
that nobody knows what’s coming next out of his mouth, and you got a recipe 
for extremely quick, vicious spikes in every direction that make risk control 
almost impossible … you know people are panicking in spades, but what you 
have no way of gauging is the scope of the panic and what comes next, cuz if 
you’re wrong, you will pay a heavy price in terms of loss.

I made two trades today … PAMM up a few bucks under 0.1%.

This is the third day in a row of tough trading from the long side, and even 
though my bull/bear trend indicator has gone slightly bearish, from my 
perspective EURUSD will have to break the 1.19500 - 1.20000 level for me to 
turn bearish or neutral, from my current bullish stance on trading positions. 
In long bull runs, it’s not unusual to see slight turns in the indicator before the 
bull trend continues … we’ll see what happens.

EURUSD provided a couple of good “setups”, but the panic activity of down 
moves and their subsequent spikes make holding long positions, while stocks 
alternate between getting “monkey hammered” and vicious mini melt-ups, very 
hard while maintaining risk control. Throw in FED Apparatchiks speaking as 
you trade, and it’s a real possibility you’re literally 3 seconds away from 
something nasty … so, when the market rally stalls, I liquidate … and of 
course, after looking like a genius for a minute or two, EURUSD screams in 
my profit direction … ho hum, trade for  living and you’ll either get used to it 
or go insane … [“I think I’m OK … Fido, what do you think? … why is he 
running”?]

Meanwhile, new “monkey hammered” lows in the SP500, yet EURUSD is near 
the high … how does this happen? Well, it’s going down mostly in a slow 
manner, and not plunging … the “gamma” of the decline is not high, it’s steady, 
so the  “big money” in the EURUSD universe says, “who cares”? [so far at least] 
One thing I want to correct from yesterday, is that tomorrow is not NFP Friday 
… that comes next Friday, which means maybe we can finally have a normal 
day without either a double reversal, “doji”, and/or FWD … yea right.

While intraday volatility in the Asian & U.S. sessions is very good, Europe 
sucks … daily ranges are still running rather low, making getting long near the 
bottom very tough, cuz you’re risking new lows on spikes that can come so fast 
it makes your head swim … just take a look at today’s interim lows, for 
example, to see what I mean, and if you’re long, the stop takes you out and when 
you literally “blink your eyes”, the price is back to where you got long from and 
you’re wondering, “WTF was that”? So, while I’m not disappointed in today’s 
results, given the trades general insanity today surrounding FED Chairman 
Spicoli’s Senate “chit chat”, I’m hoping ranges can expand to the more normal 
70 - 90+ PIPS, cuz I really don’t like fighting low probability events. So, we’ll 
see what tomorrow brings, but the main thing from today is this; “we’re up 
money in a very tough trading environment … that’s all that matters” … it’s 
afternoon in New York, and trading has slowed, even with the SP500 getting 
whipped lower 15+ handles quickly … I’m outta here … ‘till tomorrow mi 
amigos … Onward & Upward!!

PAMM spreadsheet directly below. 


Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND
OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN
“DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN
FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND
START YOUR JOURNEY FROM WHERE YOU ARE AT TO
“ESCAPE TO SUCCESS”!

  
  




 













 

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