Another Christmas in the books, and today only FX currency pairs are open,
although one look at the spreads there and all you can do is laugh … “Boxing
Day” a quasi Holiday in and of itself, and all of the CFD’s at “SLIPPAGE FX”
[a/k/a Coinexx + Turnkey] are closed for the day … that means spot gold
[XAUUSD], WTI Crude Oil, and the DOW30 are down for the count, and will
reopen early this evening for regular trading.
Friday did provide us with important info … namely, how low can VIX go in a
normal session, in this era of central bank manipulation? … and, can the
theoretical version 2 trading algorithm model price behavior as well as the
original algorithm can when VIX is a lot higher? … coming into the last couple
of days into Christmas weekend, I thought it could, but you never really know ‘til
you see it in real time … I would note, though, that if we had had VIX a few
notches lower than Thursday & especially Friday, we would have to sit … there
are some lower levels in our 3 markets that can’t be breached without some
serious ramifications for modeling price behavior … quite frankly, I don’t see it
happening going forward … that doesn’t mean it can’t, only it’s “looney tunes”
even for “The Twilight Zone” … most likely if it does occur, it’s a one off and not
worth modeling … I nor anybody else can make allowances for every market
moving possibility.
Our 3 markets for PAMM trading exhibit as high a VIX structure as you’re gonna
find on a consistent daily basis … the DOW30 trades inside the “88/6/6” paradigm
[88% of the time it goes up, 6% of the time it goes sideways, and 6% of the time it
gets beat to death harder than a baby seal at a Japanese whale hunt] … stay out
of the way in the “back 6”, and you can back the yacht up and load the cash
… crude oil and gold are more demand oriented markets, where not only is
trading action more attuned to a 50/50 model, but unless there is ample evidence
of a complete depression on the horizon in world economies, both enjoy a
somewhat artificial floor underneath price, while at the same time the sky is the
limit for advances.
Currently, crude oil has about a 4% range of the value of the underlying
commodity, gold a little less than 1 ½ % of the underlying, and the DOW30 a little
less than 2% of the underlying stocks … if we could trade the oil CFD’s like oil
trades in the futures market, I’d never look at any other market … the fact is, we
can’t … blown out spreads and slippage a major problem, even on the tiniest of
orders … the DOW30 CFD has a liquidity problem … go up the volume ladder
and watch in horror as slippage goes exponential … it would be nice to be able
to trade the SP500, but the bid/offer spread is a rip off.
Ever since the 2020 COVID HOAX, when gold spreads went orbital, conditions
have gradually improved over the months and couple of years, to a point they
are only slightly higher than before … on average only a few pennies higher from
$300 - $500 ago in price … as price goes higher, it only makes sense for some
adjustment in spreads, as the VAR [variance] of price changes quicken in scope
… but of the 3 markets, “IF” the spread can stay consistent at around 25 cents
currently [give or take a few pennies depending], gold exhibits much better runs
up & down AND attendant corrective activity, than the other 2 markets … FROM
MY PERSPECTIVE, what has always plagued gold [even back in pit trading days!],
is its innate ability to hit off as many “false positive” positions as the universe
can allow, and get you to be long at tops and short at bottoms, and then take off
on some nice run with you sitting at the train station as the train leaves … all the
while the conductor waves “Buh Bye” and laughs his ass off … for me, it’s never
been about VIX per se, but the “sucker moves” … and nobody but nobody is
better at initiating “sucker moves” than the LBMA [London Bullion Market
Association] that runs and controls spot gold [XAUUSD] … question is, with
higher corrective activity than either crude or DOW30, can gold be modeled
successfully when VIX dips? … the answer is “YES”, but it has limitations … well,
nobody is expecting the “Holy Grail”, and on those days [hopefully few and far
between] when conditions suck, we got crude and DOW30 to fill the void … quite
frankly, crude oil is very, very close to gold in many ways … the big advantage I
see for gold over crude is its corrective activity is stronger more often … bottom
line, though, is if any of these 3 markets are “dead”, there isn’t anything worth
trading anyway.
This shortened week also sees me finish up the very short term binary options
manual … should have it done by New Years Day sometime .. .when I’m satisfied
version 2 of the trading algorithm is “killer”, I’ll update and post over in
“Download Links” … onto the week!
… OUTTA HERE … “The future’s so bright I need 2 pairs of sunglasses 😎😎,
and my own Brinks armored truck” 💓!! … Onward & Upward!!
-vegas
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