WAITING FOR A MARKET MOVING HEADLINE

 

“What could possibly go wrong on this nice sunny day!?”

Both sides in the Russia / Ukraine clusterfark are at the border crossing of Belarus

for “talks” on ending war, and quite frankly whichever way the headline pops

[good or bad for financial markets], it’ll be fast & vicious … I’d like to think that

both sides know what’s at stake here, but the level of complete stupidity & hubris

knows no bounds, meaning a breakdown is entirely possible at any second,

even 3 minutes into the gig … and the war then rages on towards an ending where

nobody really knows just how ugly this thing can truly get … so who knows when

we find out? … and until then financial markets are walking on eggshells … just

watch any M1 chart, and you’ll know when it hits … we’re here to “trade”, not

play roulette “red / black” and get a free beer on a make believe lottery ticket

… and so, here from the European open, it’s time to “hurry up and wait”.

One thing I find telling, is that neither side sought or wanted the U.S. to get

involved and stick it’s nose into a place it neither understands or knows WTF

is going on … in other words, “soy boys stay home!” … quite the rebuff to

“Taliban Joe”, but simply the right thing to do … you want this solved, or do

you want it FUBAR? … the U.S. gets you FUBAR! … and just to prove to you the

U.S. government is functioning and hitting on all cylinders under the

“Taliban Joe” & Kammy regime, this headline article from ZH ought to erase

all doubt  … the link directly below … read it and weep.

https://www.zerohedge.com/medical/fema-case-nuclear-explosion-maintain-

social-distancing-and-wear-mask

You simply couldn’t make this shit up and have anybody believe you, but coming

from “Hi, we’re from the Government and we’re here to help” division, at the

“Institute For Developmental Idiocy & Stupidity”, they tirelessly work for your

benefit … this country really is in trouble.

Before we get to the “Grade A+ Clusterfark” portion of today’s trading that starts

at any moment with a headline, you have to remember that “unexpected” news

headlines are ALWAYS a risk when trading, and there isn’t anything anybody can

do about that … this is different, cuz we know for CERTAINTY a headline [good or

bad] is comin’ down the mountain … get caught on the wrong side of this, and the

loss has the potential to be ugly … and quite frankly, it’s got nothing to do with

trading, only gambling, and it’s why I wait … there simply is no other sane choice

… reading the “tea leaves” of the “Spoos” this early AM in New York, I’d say the

market is expecting some kind of good news headline, and quite frankly

ANYTHING POSITIVE in a headline will get the “Plunge Protection Team” [PPT]

into the game to jack price higher … :Spoos” are drifting higher …  it’s a risky

gambit to be sure, cuz if nothing comes of this meeting and war rages on, look

the Hell out below … after a brief run, trading action in the “Spoos” is quieting

down rather substantially, perhaps cuz players know we are getting

uncomfortably close to a blow out headline one way or the other.

Heading into the London Fix, and I’m somewhat surprised at the level of

bullishness in the “Spoos” … as if all the sanctions against Russia will only

affect Russia … no headlines yet, and I can only surmise the market takes that

as uber bullish, meaning they are talking and wheeler dealing into some kind of

agreement … with Europe closing and no news, either something comes real

soon, or it feels like the “Spoos” are set to explode once gain for the second

day in a row … unreal.

And then the “real soon” hits … talks will continue to a round 2, with both sides

going home and meeting again in coming days … but I think the “take away” is

Zelensky signing papers for Ukraine to join the E.U. … correct me if I’m wrong,

but I’d be shocked if Vlad agrees to that in any way, shape, or form … and as that

news is digested, the rocket ride from overnight that has seen the “Spoos” go

up basically uninterrupted over 130 inde points, suddenly loses altitude and

down goes Frazier … on the other hand, never discount the purpose of the

“Plunge Protection Team” [PPT], who will print and throw trillions at the indices

in order to prop them up …  2 days in a row we’ve seen this … and with that

news, and the fact that the range for the day is way past the 20 Day Range MA,

again I need to see price go down to an acceptable level before I take a buy

signal … and given the level of uber bullish enthusiasm for “Stonks” the last

2 days amid nothing but horrible headlines, tells me the market is vulnerable

… I mean, who’s left to buy besides the PPT?

Overall, looking at all the markets I have designated for PAMM trading, they all

today have modeled exceptionally well their respective trading action via the

trading algorithm … now that we know these so called war talks are likely to be

protracted, and there isn’t gonna be some surprise headline, simply cuz the

leaks around today’s talks were larger than the holes in a slice of Swiss cheese,

tomorrow sees normal trading and I won’t be holding back in fear of a headline

like today … now into the New York afternoon, with such a large range, and

having broken about 50 index points on that news of Ukrainian E.U. potential

membership, I’d expect “Spoos” action to be choppy at best, and maybe very

wicked at worst, with some heavy downside action possible, though not

probable … in other words, screw New York and it’s on to tomorrow.

One algorithm buy signal after the news broke … TURNKEY PAMM UNCH’D.

Entry into the signal saw us get filled horribly … and when I mean bad, I mean

bad … what a crock, but thanks Turnkey, your thieving LP’s are up to the task

once again … and using the trading barometer I’ve always stuck by, which is,

“when fucked by Turnkey on a fill, all that’s left is to scratch the trade and start

again with another signal, cuz if you hang on you’re likely to not be very happy

with what happens next” … and that’s exactly what I did.

Meanwhile, over in crypto, BTC finally explodes the range to the upside

… multiple trades today for “The Syndicate”, and we’re up about 0.1% … not

much to hang our hat on, but the trading action at times today was unusually

wicked … would be nice if BTC can keep the MOJO going … we’ll see, cuz on

the whole the alt-coins were disappointing in their ranges.

… outta here … “The future’s so bright I need sunglasses”!!😎😎

… Onward & Upward!!

-vegas

 

SUNDAY UPDATE: DO YOU REALLY UNDERSTAND?

 

“And suddenly, the trading landscape says we ain’t in Kansas anymore!”

I’m gonna start today’s blog update with the 20 Day Range MA’s of selected

pairs, directly below.

click on table to enlarge

Over in the right hand column, under “Download Links”, there is an Adobe pdf

that is a table of the second half of 2021, with each week’s 20 Day Range MA of

selected pairs … if you take any pair and map it’s changes, you can clearly see

the ebb & flow of changes in its VIX … since the end of 2021, these flows are

calculated and posted each week on the Sunday update.

Over the years and decades I’ve been a professional trader, people always ask

me how I made millions of dollars trading from the floor … what was my

“secret”? … quite frankly, there wasn’t then, nor any time before and after, any

“secret” … the crucial key was / is / always WILL BE VOLATILITY … from the

birth of modern day financial derivatives trading, which was the mid to late

1970’s [major FX dollar pairs, and the SP500 futures started trading in April 1982],

up to the financial crisis of 2008, the dirty little secret was VOLATILITY [VIX] WAS

FAIRLY CONSISTENT! … granted there were days and maybe some weeks where

shit got out of hand [1987 crash], or markets died [around major Holidays], but

on the whole VIX was fairly consistent at “bat shit crazy” [BSC] in the Swiss

Franc, British Pound, & Japanese Yen, and then when it got rolling the SP500

futures … and since it was CONSISTENT, you could count on it about 99%+ of

the time to make you money, cuz no matter the market, during the day when

trading was over, you’re gonna have a “high” and a “low” for the day, and that

difference would match up very closely with the 20 Day Range MA … “count on

it, it’s gonna happen!” … as we all know, a lot can happen between the high & low,

and there are a million stories in the “Naked City” in that daily candlestick on

the chart, so you can never do “stupid shit” and expect to get away with it … but

what you could do in spades was scalp / day trade the shit out of it knowing

what the CONSISTENT VIX was gonna be … so, if you want the “secret”,

THAT WAS IT!

Then everything changed in the financial crisis of 2008 … governments got

involved in trading, interest rates went NIRP [negative interest rate policy]

almost everywhere, and to be truthful, the entire landscape of trading changed

suddenly and violently … 14 years latter, it’s gotten worse, not better, and it is

now a “given”, that the “Plunge Protection Team” [PPT] protects “Stonks” in

the “88/6/6” trading paradigm set up by the FED … the only thing they care

about now, no matter what the PIE HOLES say, is the price level of the SP500,

based entirely on the premise of people thinking, “well Hell, it can’t be that bad,

“Stonks” are rising, so maybe the country isn’t going into a depression”, and

just like very good propaganda, attitudes are changed for no discernible reason

other than Apparatchik bullshit! … and those “glory days” of FX? … where the

Hell are they now? … into the dustbin of history is where, as central banks

learned from “Peter Pan” Kuroda of the BOJ, how to effectively manipulate

EVERYTHING FINANCIAL BY PRINTING MONEY.

I’m gonna highlight the problems traders face, by using an example that every

trader should be familiar with, from rank Newbie to “you’ve been around a while

and gotten burned” … there are plenty of others to be sure, but let’s simply look

at MOVING AVERAGES [MA’s] … pick your poison as to the MA method [Simple,

Exponential, etc.], it doesn’t make any difference … pick any market, but I’m

gonna pick FX, for example EURUSD … directly below in succession, are 2

monthly charts of EURUSD, the first from 2000 - 2012, and the second from

2013 - 2021 … the plum lines are 2 simple 12 period MA’s for calculating the

yearly average range of PIPS “rate of change” per month over the year.

click on any chart to enlarge

Notice the difference in the “grid” of the charts … quite a comedown from

2000 - 2012, before governments got actively involved in MANIPULATING VIX

… directly below that shows the table results of the plum lines from 2001 - 2021.

click on table to enlarge

Quite a change over different periods isn’t it? … my point here, though, is to

highlight the fallibility & limitations of MA’s … quite frankly, any MA crossover

you use is gonna get slaughtered when VIX slows down [it’s called “chop”]

… and when VIX goes up significantly, you miss quite a few tops & bottoms cuz

your signal crossover is to “Hoover Dam” SLOW! … now, I can do the above

analysis for any market, and what you’re gonna find is the same no matter where

you go or what you trade … even now, crypto is going through its own “nuclear

winter” … if you look at the 20 Day Range MA of your favorite market(s) from

H2 2021 to now, you can see the very big differences some markets have had

… so if you use “conventional methods” [those found in the library of the MT4]

to model your trading decisions, my question to you is simple.

“When and under what level of circumstance was the “VIX structure” of your

market when you created your model [algorithm]”? … cuz unless the

“VIX structure” stays relatively stable [good luck with that], you’re gonna get

toasted by either rising or slowing VIX and not know WTF happened! … and

quite frankly mi amigos, this is the central issue of our time now in markets

… so what to do?

For many months, I have traversed many blind alleys to find the answer … cuz

what is needed is AN AUTOMATIC ANALYSIS IN REAL TIME OF CHANGES IN VIX

THAT SHOW UP ON THE M1 FOR ANY MARKET … I have written at length of the

limitations of the trading algorithm I use … briefly, they are 1) completely dead

markets, 2) wildly inconsistent VIX on the M1, where one day an FX pair [or other

market] has a 150 PIP range, and the next day it’s 55 PIPS, and 3) “V” bottoms

out of nowhere that scream higher, cuz of increased VIX [e.g., “Spoos”], and the

buy signal is simply too “Hoover Dam” slow!

Now, having said this, there isn’t any point in any of you believing there is some

“Holy Grail” out there that can solve 100% of these problems … that’s not what I

research for … what I want is for limitations in an algorithm [a/k/a losing trades]

to be sharply REDUCED, understanding they can never be totally solved … dead

markets there isn’t anything anybody can do about it … move onto another

market … if you persist in trading a dead market, what’s gonna happen is a day

shows up and the VIX Genie is “let out of the bottle”, and you get carried out toes

up … not an “IF” scenario, but a “WHEN”! … that leads to simply VIX, and

understanding how it affects the market you’re trading … and over the last

several weeks, from months of research & development, I’ve put the puzzle

together mathematically and coded it into the current trading algorithm for even

better responsiveness on signals IN ANY KIND OF MARKET THE SCUMBAG

LP’S WANT TO THROW AT ME.

I want to be clear here … this algo is NOT IN ANY WAY a model for what goes on

over in crypto … crypto is its own separate deal, and quite frankly, if crypto

trading only gets you what traditional markets return, what’s the point of trading

it? … cuz “Stock Belies”, especially the major U.S. indices, operate under the

“88/6/6” trading paradigm, there is an inherent edge here not found in other

markets by simply concentrating on LONG POSITIONED TRADES … YOU GOT A

15 - 1 EDGE, WHAT THE HELL DO YOU WANT? … to a lesser extent, the DAX40

and the FTSE100 fall under this umbrella as well … in other words, as long as

the spread holds in “Spoos” at Turnkey, look for the PAMM to be trading it … as

I said, it doesn’t matter the market, as I’ve designed and implemented it into the

trading algorithm for anything / everything from a VIX perspective, EXCEPT THE

DEADEST OF MARKETS … so if you’re a EURUSD and/or USDJPY trader, and

the range for the day is 28 PIPS, there isn’t anything I can do via the algo to help

you … simply move on Skippy!

Moving specifically over to the “Spoos”, lately the biggest problem has been the

sharp “V” bottoms, and the algo being too “Hoover Dam” slow to get to the buy

signal before a signal is given … what good does it do us if the “Spoos” go up 12

index points in 1 - 3 minutes, burning buy fuel, and then give us a signal?

… right, it doesn’t … and if VIX slows down in the “Spoos”? … no problem cuz

the algo adjusts AUTOMATICALLY TO CHANGES IN VIX IN REAL TIME, WITH

ALMOST ZERO LAG! … what that means for us, is that we get closer to bottoms

than ever before under all VIX scenarios except the truy dead … IMHO, we’d need

to see the 20 Day Range MA in the “Spoos” go under about 35 index points, and

currently we’re right around 100 … we ain’t gonna get all of the bottoms of

course, but we’ll get our healthy share, way above and beyond what we’re getting

now which ain’t much.

Tomorrow, which is Monday, is the last day of February … I’ve already

incorporated the new metrics & parameters into the trading algorithm … my list

of markets for PAMM trading are prioritized as follows … 1) “Spoos” currently at

the top of the list … 2) DAX40 if the spread at Turnkey is acceptable … here lately

it hasn’t been, and quite frankly it’s been a total shitshow circus with a very

inconsistent spread … 3) EURUSD, GBPUSD, & USDJPY, whichever looks the

most interesting from day to day if the “Stock Bellies” go “sleepytime” … 4) gold,

where I’d be shocked if this market picks up and moves significantly over the

next 3 - 6 months … maybe but I doubt it.

So why am I laying out all of this for my readers? … I’ll have the results of trading

for March + the last day of February, and I’ll post the results weekly on the blog

update starting next Sunday … at the end of March, in some way, shape, and/or

form, I’ll be making this “traditional market MT4” algorithm PUBLIC here on the

website … with all of the available markets on the MT4 [could be used for futures

as well], in all of the groups, that means there are many dozens of potential

markets, including the FX non dollar crosses, plenty of indices, energy, precious

metals, you name it for people to trade their favorite market(s) … the algorithm is

flexible enough for both scalping & day trading on the M1 … I’ll leave it up to

readers to play with different time periods for position trading … right now, I’d

recommend Turnkey only for FX, and “Simple FX” for CFD’s [not much difference

in “Spoos” trading between the two, but other indices there is a big difference

with Simple FX better [lower spread + no commissions]]

From my perspective, these changes to the trading algorithm are a “game

changer” … you’ll see the difference at the end of March … I’m not at all worried

about other traders front running or crowding out trades with heavy participation,

simply cuz of the depth of markets and the flexibility the algorithm offers to

either scalpers / day traders / or anywhere in between the two … add to that the

depth of volume & liquidity in futures that dwarfs CFD’s, and it ain’t gonna happen

… the very best scenario is to utilize the micro emini futures at a brokerage house

outside of the U.S. … but as “Simple FX” proves, and there are plenty of others

out there as well, paying a fraction of a futures tick above a futures spread, in

order to have a NO KYC account via crypto, gives better privacy, security, and

anonymity for a very small, and in most cases, meaningless cost to trade … again,

I want to point out before I go, what has now changed is having the ability to NOT

WORRY HOW VIX AFFECTS BUY SIGNALS IN THE “SPOOS” … cuz whatever it is

[other than completely dead], it’s dealt with in REAL TIME AND GIVES ME THE

VERY BEST OPPORTUNITY TO GET BUY SIGNALS AS CLOSE TO THE BOTTOM

OF A MOVE, WITHOUT A SIGNIFICANT INCREASE IN “FALSE POSITIVES” … and

this has been bugging the shit out of me for months & months … finally I got a

handle on it and the math “works” … nobody need worry how it works cuz

it's visual in scope … a retarded kitten could trade this … do you know the

quantum mechanics of how your smart phone works? … I rest my case.

Onto another what looks to be “blistering week” in terms of movement … outta

here … “The future’s so bright I need sunglasses”!! 😎😎… Onward & Upward!!

-vegas