“Where do you start with this Clusterfark?”
It’s tough to know, where to even begin to start with today’s mega “clusterfark”
in GBPUSD … not that it wasn’t unexpected, cuz days like these always have
the potential to come at you with more than a little zeal and hot price action
that can melt steel. So, why should today’s Cable data dump, BOE interest rate
decision, quarterly inflation report, BOE Governor Carney speech & presser,
& finally U.S. consumer inflation numbers give more than a little volatility
… what could possibly go wrong?
It all starts innocently enough, with some “back & forth” at our 06:00 server
time open, but quickly turns bearish, and leads to an interim low around
1.35230, about 15 minutes before the first batch of news is going to hit on
British Industrial production & manufacturing … and again, as I have
pointed out in some previous blogs, since the start of the year Cable has
increasingly started to “ramp”, either up or down makes no difference, right
before numbers are released; and while some of this is normal, it’s getting to
the point now, where every scheduled news release sets off panic, minutes
before the reported event … “hey, why should today be any different”?
The first set of numbers were not good, but they were better than consensus,
and that led to a minor rally … but after that, it’s about 2 hours and 30
minutes to the “big enchilada”, the BOE interest rate decision, inflation report,
& Carney presser, and here’s where the first batch of “fun & games” starts
… a furious rally ensues, where the last hour sees new daily highs above
1.36000, buy stops set off, and then starting about 20 minutes to the BOE
decision, the market starts to break hard … and “viola”, at exactly 11:00:00,
on release of the BOE news, hop in the back seat cuz “Thelma & Louise” have
reserved a seat for you with your name on it … “bottom of the quarry, here we
It’s pretty damn clear to me, somebody had the data before release, and they
were long … the only way to avoid being slaughtered, was to “goose” the
market higher buying everything in sight, and then selling every buy stop &
bid above 1.36000 they could get their hands on … and then in the last 20
minutes, sell it hard to get short … BOOM! … 100 lower, thanks for coming
& playing! “Oh, but the fun is just starting, cuz we got U.S. inflation numbers
which came in slightly “soft” … BOOM! … to the upside we go 50 PIPS, and
while people catch their breath for approximately an hour, now comes the other
shoe to drop, and down goes Frazier to new lows”! Surely, the fun is over now,
At 15:05, Bloomberg runs a headline stating that Carney sees a rate hike later
this year if there are no “economic shocks” … “well, say hello to 50 PIPS higher
in seconds, right off the lows of the day”, and again just like in April, Carney
throws a bone to the banks who are long down here and saves their bacon
… “it’s what central bankers do for their pals, and it also punishes retail shorts
who hang around for too damned long, so in essence his comments kill two birds
with one stone, and it’s … mission accomplished”! And with that, Europe closes,
volumes shrink to zero, liquidity is “buh bye”, and if you’re short now, good
luck, cuz we’re about 40 - 50 PIPS off the low, and who knows who bails you
out now … not that being long is any great shakes either, cuz the reality is
anybody in either side of a position is in the same “Titanic” lifeboat waiting to
get rescued. “If 20 people were in positions right now, 10 short and 10 long,
could all of them lose money in the next couple of hours? … Hell yes”!
Through all of this, I managed 2 short trades … PAMM up just a few bucks
shy of 0.1%.
And while I was up in both immediately, both caught me in 3 - 4 PIP upticks in
liquidating … the first I saw and then immediately liquidated, the second came
right as I clicked to get out … and while frustrating, you can’t sit there and
ignore them simply cuz you don’t like what they just did, you have to cover and
liquidate … as I have stated before in the blogs, and it works both ways but the
short side especially in Cable, when you start hitting new lows for the day, and
the very next “tick”, or bid/offer, that you see in the order box is 3 - 5 PIPS
higher, what that is telling you is, “hey man, it’s either over or damn close to the
downside, and while they may take it down again, when this happens 2,3,5, or
more times when you’re short, the market is trying to tell you to get the hell out
and liquidate, and if you don’t, there’s gonna come an M1 candlestick that you
are most definitely not gonna like seeing … and today, from 1.34800 down to the
low at 1.34600, in the span of approximately 40 minutes, these “mystery” upticks
of 3 - 5 PIPS occured at least a couple of dozen times”.
And then 13 minutes off the low, at 15:05, the Bloomberg headline hits, and
everybody who is still short is simply “roadkill” … you were warned, and if it
happened to you, learn from the experience and consider it cheap tuition.
It’s very easy to fall into the “the Dukes know something, let’s get in on it!”, and
trade ahead of important news … “are we here to trade, or play financial
roulette”? … but, I’m here to tell you, that the butthurt from days like this
aren’t worth it, if you end up doing “stupid shit”, and believe me, the amount
of “stupid shit” handed out today could probably fill up Rhode Island about 3
feet high, border to border.
Directly below, the M5 Cable algorithm for the day.
What’s important to understand and realize from the algorithm, is not the
“blue box”, which I have already said is an “artificial construct” created by me
years ago, that analysis shows has no significant bearing on profitability, but
the 2 EMA 46 lines … in essence, our statistical analysis shows these two lines
to be the most “OPTIMAL” for mapping profitable trades with either the M5
or the M1 … and when Cousin It showed me this, and I looked at the
probability matrix he calculated, I chuckled and said, “I got something to show
you”. And directly below is what I showed him.
“And in that instant, I saw all the hair on him stand up straight”!
In essence, the two 46 EMA’s are dynamic “snapshots”, every 5 minutes, of
where the average HR4 “extreme” value [plum the low, yellow the high] is,
meaning it’s movement over the course of the day tells you where big money is
placing their bets … price below the 2 lines and market is going lower … price
above the 2 lines, and market is going higher … and simply looking at today’s
action from above, you can clearly see how the 2 lines act as “support &
resistance” … the fact the “blue box” worked for me all those years ago, is cuz
at the start of the day, the 2 lines are going to be moving relative to the
“blue box”, and more than likely going to “change slope” at or near the
boundaries of the “blue box”, or stay the same and go in one direction. These
HR4 values are tough to change, and they prevent you from getting long or
short too early … when the slopes change, now you’re either seconds or a
couple minutes away from price moving, sometimes dramatically.
Of course, back then I had “zero” computing power, so there’s no way I could
have known this without spending 100 years doing manual calculations … but
today, I now know “I was right for the wrong reason”!
Today was the first really good market moving day we’ve had, since the
algorithm information became known to us late Monday … I’ve had 3 days of
useless “chop” to look at and analyze, now today we get some action, and you
can clearly see the values of the EMA lines did their job, and did it
extraordinarily well. More on all of this in the days ahead, as well as the
“supplement” to the GBPUSD algorithm manual due out this weekend.
A few words on crude oil … again today, any time this stuff moves, the LP’s
raise the spread … most of the night from the European open, saw WTI with a
2 - 3 cent spread, and a range of about 50 cents per barrel … then, as New York
begins to show up in the early hours, crude weakens some, and by the time we
are minutes away from the 9:30 A.M. NYSE open, crude is lower. Directly
below, the screenshot of “market watch” inside the MT4, where you can see the
spread in USOUSD IS 6 CENTS.
Meanwhile, over in the futures market, WTI is trading with volume, at a 1 cent
spread, with hundreds and sometimes thousands of contracts bid and offered at
every penny … and the scumbag LP’s expect you to pay 6 cents? Here’s a
futures market, that yesterday, traded almost 2 million contracts in WTI, and
their mini WTI [½ half the size] traded approximately 20,000 contracts.
Seriously, I’d love to trade this market via a CFD, but the bankers seem to me
to be retarded … I’ve told them this, and they never listen, and just expect
everybody to go along with their mispriced horrible 10 barrel CFD, which
makes no sense whatsoever … sooner or later, like FX had to experience once,
somebody “breaks the mold” and trading conditions improve to the point
where they are comparable or even better than futures, and no doubt it will
take place in crude oil in the near future.
All told, I’m pleased with the Cable algorithm and how it performed today,
and while I would have liked the short positions to have produced more profit,
the market is what it is and we just move forward. Take away the gap spikes
due to the news releases, and there’s only one decent market decline today, and
both of our short positions occurred during that time … the rest of the time
today saw “blitzkrieg” short covering, that at times was downright violent in
scope, causing many a trader, I’m sure, to do nothing but puke positions
constantly for losses.
And as the daily candlestick chart below so clearly shows, the last 4 out of 6
trading days has been some kind of “doji” spindle … “can we please end this
spindle shit and go somewhere? … is that too much to ask”?
Cuz right here, this is the biggest threat to making money …”DOJI’S!” … and
while a couple “now & then” are tolerable, and if the daily range is high enough
they can still produce nice profit, getting them consistently is not what we want
to see, especially with relatively small daily ranges … and as we hopefully break
away from these patterns, not only will profits be at a level where I want them,
the algorithm will shine greatly as well … and with that, I’m outta here … until
tomorrow mi amigos … Onward & Upward!!
PAMM spreadsheet directly below.
Have a great day everybody!
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”!