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Monday, October 1, 2018

DANCING WITH THE NEWS CYCLE

“When CADJPY starts to get a little crazy!”

Sure, let’s avoid the FX news cycle … “so says CADJPY and then a NAFTA deal 
is brokered … just another reminder, that no matter what it is you trade, if it’s 
offered for trading, it can step up and bite your donkey worse than midget bowling 
… and guess who you are”!?

Ah yes, a nice quiet start to October … not. China is off the entire week for 
festivities [Golden Week] … do these guys know how to party or what? 
… Japan is fighting a CAT3 hurricane [typhoon] and so has better things to do 
than watch FX, and of course the political circus in Washington continues 
unabated, with levels of hypocrisy so deep even a 2 year old could understand 
the irony of it all … quite frankly, I am sickened by Libtards and their selective 
“faux outrage” …  NEWSFLASH! … “Upon being born, Brett Kavanaugh 
exposed himself to three nurses in the hospital birthing room … nurses are 
outraged and threaten a boycott”! … “you laugh now, but somewhere it’s being 
considered by a deranged Libtard” … the party of hate & obstruction that has 
nothing to offer America but SJW bullshit … when’s the last time any of these 
assclowns proposed anything that actually helped the middle class? … “no, me 
neither”! … in any event, throw all this shit into a pot, and whaddaya got? 
… stale markets is what you got, with not much trading taking place in 
anything … even with the New NAFTA deal, USDCAD not doing much but a 
little softer than overnight euphoria.

I’m left wondering just how much “oomph” USDJPY has on the upside, where 
for the last 16 trading days it’s been an almost straight up express train … at 
some point, this dam breaks and that has some ugly ramifications for any of 
the Yen crosses, like CADJPY for instance. While Canada might enjoy some 
tailwinds cuz of the new NAFTA deal, when Yen corrects it’s gonna bite the 
cross. Meanwhile, stocks continue their manipulated journey to infinity, but 
when the next stumble comes, remember that USDJPY will go full FUBAR to 
the downside, as money flows into “safe haven” Japan … and that flood will 
outpace anything the Loonie does on the upside.

Turning to today’s CADJPY market … “OK, first day and shit happens with 
NAFTA … can I pick ‘em or what”? … starting the day with a double sized 
portion of 8 hour range for starters, but it feels like the banks have been 
fading the CADJPY move up here above 89.000, since before the North 
American open … feels like there’s work to do up at these levels before any 
hope of scooting higher is in the cards for the cross. Since the high around 
89.130 near 7AM EST., no rally has had any legs to go higher longer than a 
few minutes, and every blimp up is met with selling and/or liquidation. This 
has the look and feel of a market that has “blown off” the top, thus crucifying 
everyone in its path that was short … so up at these lofty levels, where’s the 
buying now that the shorts are “buh bye”? “well, we haven’t seen anything, 
especially since 7AM, where it’s been nothing but a slow “bleed lower”, and it 
very much looks like the banks are liquidating on any rally … CADJPY could be 
in for some days of a “hangover” … we’ll see”.

Mid morning in NY, and when FX dies, good grief does it go dead quickly … I 
mean, literally, there isn’t anything on the board that is moving … it’s a bucket 
of hog slop all the way around, and quite frankly I don’t have a clue what will 
wake it up for the rest of the day … this puts a whole new meaning to “chop”, 
when you have to wait multiple minutes to simply get outside a few tenths of a 
PIP spread … you want pathetic, this is pathetic.

We continue to get small drifts up in USDJPY, whenever shorts can’t get it to 
move lower with any conviction … this had led to a very small up move in 
CADJPY, but again I have been at this Yen rodeo before, and when it turns it 
will be vicious and quick … trees don’t grow to the sky, and neither does 
USDJPY, without some kind of “shaking out” process … IMHO, we’re close to 
getting one here very soon.

Noon in NY, and if you’re not watching any of this, it’s hard to explain just how 
dead markets are today … volatility has collapsed across the board, and if 
things don’t improve, we’re headed for a very small 8 hour range in CADJPY 
… and there isn’t anything else that is materially better, with USDJPY being in 
an approximate 18 PIP range for the last 14 hours, to give you some idea via 
comparison just how bad things have gotten. Currently, CADJPY has about a 
30 PIP range since 7AM EST [5 hours], and we’re sitting right in the middle of 
that ± a couple of PIPS, although there’s a slight upside bias to price … BOC 
Lane set to speak on cryptocurrencies @ 1:15 PM EST, so who knows what 
happens after his little speech during the Q&A session afterwards when he’s 
asked about a whole host of things … more than likely he’ll deflect from 
anything other than crypto, but you never know. Here in the NY PM, intraday 
FX volatility has all but vanished … still, the levels in CADJPY are only below 
average … there’s a little movement, given the new NAFTA deal, but overall, 
everything is range bound. 

It’s after 1 PM EST, and I don’t see any BOC Lane reaction … market tone 
remains upbeat, but price is stuck in the mud … maybe it expands the range 
higher as we move towards the close, but there isn’t enough movement to 
warrant a buy signal even if it does … and I’m not buying a rally on a day that 
is in the lower 5% of all 8 hour range days for 2018.

Two algorithm trade signals & trades today … PAMM up a few bucks.

Directly below, today’s algorithm trades in CADJPY, with commentary.

click to enlarge

Our first trade led to a tiny loss, as the algorithm was just a tad early on the 
turn … second trade made it all back and then some. Overall, I’m extremely 
happy with the fills from Turnkey in CADJPY … everything right on the 
bid/offer with zero slippage … “why the hell can’t your scumbag LP’s in 
EURJPY do the same”? … I guess we’ll never know.

You’ll notice, that over the weekend, Turnkey switched server times from 
GMT 0, to GMT +3 … this ends the trading day at 5 PM EST, where the new 
day starts at 5:00:01 PM EST [00:00:01 server time], and eliminates Sundays 
from all times for any of the charts … I’m wondering if the switch in banks 
has anything to do with excellent fills today? … dunno, just wondering. In any 
event, keep it up please … nobody asks for anything special, just fair.

It’s a little unfortunate that the new NAFTA deal came in the wee hours of 
Sunday night, and we start the day with an approximate 90 PIP range 
… nothing really extended from this, and the day has been nothing short of a 
“snoozefest”, with about a 30 PIP 8 hour range so far … to be sure, it could go 
further after I post, but it simply isn’t worth a position going into the close and 
the subsequent Asian session, where practically everything is either shut down 
in Japan cuz of a hurricane, or Golden Week in China where the entire week is 
party time, and markets are closed … where does that leave your position?

Well, it is what it is, time to move on to tomorrow, where I would expect some 
more “backing & filling” before price goes higher … in any event, I’d like to 
see something in USDJPY, besides 20 and/or 30 PIP ranges for the entire day 
… this is getting old … I’ve traded Yen off and on over the decades, and I know 
how this shit trades … just when you think it’s quiet and sleeping … BOOM!, 
it explodes, and right now the market is overextended to the upside and needs 
some downward price action … that’s gonna bring down CADJPY most likely, 
so you have to be careful up here at today’s price level … it’s not a slam dunk 
for higher price under every scenario.

Overall, given the circumstances of today, and the lousy ranges, today’s signals 
were good … the first one a hair early, but the second one right on the money 
… after that, no other signals as price action, and volatility slowed way down, 
thus preventing further trades. So, up a few bucks … until tomorrow mi 
amigos … Onward & Upward!!

PAMM Spreadsheet directly below.

click to enlarge

Have a great day everybody!!

-vegas

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