Nothing like a good spec & “whale” shakeout on a Saturday morning in the
Asian session to start the week! … I didn’t see it ‘till I got up Saturday morning
and saw the chart carnage from hours earlier … If I had been awake, would I have
gotten caught in the carnage for “The Syndicate”? … the answer is “NO”, simply
cuz the algorithm would have not gotten long UNTIL AFTER THE CARNAGE IN
ETH, NOT DURING THE CARNAGE … I have always said when trading algorithms /
models / indicators / whatever you want to call ‘em, that you need CONFIRMATION
of a bottom BEFORE you go buying, and that picking points on a chart to get long
as they get obliterated by forced liquidations [a/k/a sell stops], is a sure way to see
your sell stop being liquidated next! … you simply can’t assume anything when
trading, and the word “NEVER” or “CAN’T BE HAPPENING” is not something you
want in your trading vocabulary or mindset … and it’s why the top priority of any
trading model should first be ‘DON’T GET WHACKED”!
You always have to keep an eye on longer term charts … always … why? … cuz
numbskull specs & people with too much money for their own good looking to
throw it away place their stops at the same place ALL THE TIME … major support /
resistance points on the 4H, Daily, or weekly candlestick charts are invitations to
a manipulative run on the stops by crypto whales … and if you’re oblivious to this
and aren’t paying attention, you very well could be sailing your trading ship right
into a CAT 6 Hurricane … over on ZH, an article detailing the Saturday morning
bloodshed directly below.
https://www.zerohedge.com/crypto/leveraged-bitcoin-traders-flushed-out-epic-
Here’s the DAILY candlestick chart of ETHUSD somewhat condensed.
You can clearly see that violation of 4,000 and then 3,900 is gonna spell major
league trouble, and if the market gets there the whales are gonna force it
through … and they’re gonna do that cuz they know the sell stops below are
frickin’ humongous, AND also cuz they want to buy the carnage before bidding
it back up the ladder … and the trip in ETH from 3,900 down to a hair above 3,400
ONLY TOOK 7 MINUTES … TALK ABOUT FORCED LIQUIDATIONS, THIS WAS IT!
… for a trader, this is suicide trying to pick the bottom … can you catch a running
chainsaw dropped from 35,000 feet in the air by a jetliner?
Once before in my trading lifetime, back in October of 1987, I saw many a good
trader go “belly up” in the great crash … their mistake? … buying it on the way
down with no bids and only massive offers to sell … the play? … wait ‘till it
bottoms and the bids show back up AND THEN BUY! … and the Dopes say, “well
you missed the bottom”, to which my reply is “WHO FUCKING CARES IT’S GOING
UP NOW”! … LEARN IT, LOVE IT, LIVE IT! … long before crypto showed up,
“Stock Bellies” proved in spades it can happen in any market AND DOES … crude
oil to -$40 … gold getting “monkey hammered” on a constant basis … wicked
“Spoos” down moves … who remembers December 2018? … and from the ZH
article, this latest round of bloodletting took its toll on specs and at least one
very large whale in Asia.
Directly below, the 20 Day Range MA’s for selected markets.
Some pretty dramatic pickup in VIX, especially USDJPY and SP500 … crypto
humming along like always, but there are surprises there as well … the key going
forward, IMHO, is more of a political nature inside the FED … Spicoli just got
re-nominated for another 6 year term, and then he knows it’s over … will he or
won’t he put the brakes on the “FED Put” and raise rates and taper more
aggressively? … he gives two rat shits about “Taliban Joe” and his idiotic agenda,
so what does the FED do? … for what’s it worth, markets are forecasting a
“policy error” by the FED … and if the QE spigot is shut down, where’s the
impetus for MOAR! corporate buybacks? … valuations are already stretched past
the “are you F-ing Me?” level, so where does that leave “Stock Bellies”?
… especially in a political environment that approaches comedy gold with
stupidity & ineptness at every level … check the record, “Taliban Joe” has
NEVER GOTTEN A “HOOVER DAM” THING RIGHT IN HIS CAREER … ever … hell,
even Osama Bin Laden, while he was alive, knew Biden was a complete clown
show & disaster, and why he told his followers to never target the guy … so that’s
always in the background working against markets, cuz you never know what
dumbass thing he’s gonna do next.
I’d like to see things slow down a tad in “Stock Bellies” , particularly the SP500
… there are excellent scalping opportunities in this market, but wild range days
in excess of about 115%+ of the 20 Day Range Day MA, particularly when it’s
getting extended via the downside, is not a recipe for success from the long side
… what happened this weekend in crypto has and can happen in “Spoos”
… 6 months to a year of good scalping can be wiped out in 15 minutes! … yea, it
probably won’t, but the probability ain’t ZERO either! … you simply have to be
extremely careful when the “Spoos” enter the back “6” of the “88/6/6” trading
paradigm [for newer readers, the SP500 over time, spends about 88% going
higher, 6% going sideways, and 6% of the time getting “monkey hammered” lower
“bigly & yuge”] … that’s not to say the back “6” only goes in streaks [it can] of
days, it also comes and goes with the wind on isolated days … but one of the
major characteristics of these days is running sell stops, especially stops placed
right underneath major support … and it’s one of the reasons I almost never get
long on top of support … cuz when it goes bust you’re toast!, far in excess of
any group of scalp winners is going to return to you.
Onto the week … Asia, please keep your “big girl panties” unwadded and stay
away from large “Spoos” ranges until I get here! … is that too much to ask?
… outta here … “The future’s so bright I need sunglasses!! 😎
… Onward & Upward!!
-vegas
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