It’s there, and then suddenly it vanishes like a squirrel fart in the wind … the last
2 days of last week were a stunner, in terms of price action in the New York
session, as session range over an approximate 8 hour period was barely able to
make it over a buck … and that was aided by some late afternoon position
squaring ahead of the weekend … “Trading Ratio” [TR] levels at times below 2,
which are rare in the New York session unless it’s a pre Holiday … I wouldn’t
consider MLK day [tomorrow] a world Holiday for markets … in any event,
historically there is precedent for a slow start to the year … I’m not really
reading anything into 2 or 3 days of price bullshit.
I had planned on releasing the version 2 trading algorithm today, but I first want
to pile in some performance for the PAMM … if we get a decent week of action
upcoming, I’ll release it next weekend … and speaking of the v2 trading algo, the
reason very low ranges and unacceptable TR levels require us to sit, isn’t what
you think it is … the fact is, and you can debate the level required to get it but not
the effect, very low levels of VIX change the psychology of the marketplace in very
profound ways … nobody is “sweating” and about to panic … up / down makes no
difference … high VIX markets make people sweat and forces them to react [a/k/a
trading], and their subsequent collective action [spec community of traders]
begets more volatility … this isn’t present like it should be when nothing is
happening … the other major effect is that low VIX sees stops bundled around
obvious support & resistance levels, and if breached causes a supernova of
activity seeing stops get butchered far worse than otherwise is the case … oil
isn’t the only market to see this, it happens more often in gold as well … the
major beneficiary of elevated VIX, is the opportunity to make any losing trades
back when “false positives” appear … dead markets don’t give you this.
Directly below, the 20 Day Range MA’s of selected markets.
Tomorrow is a semi Holiday in the U.S. … MLK day … another useless federal
Holiday where government and banks are closed, but normal people who live in
the real world get NADA … since banks are closed, the bond market is closed,
and so there’s the potential for markets to be quiet … that doesn’t mean they
have to, as history shows plenty of MLK days where action and VIX have been
normal … how oil reacts to the Holiday given the lackluster Thursday & Friday
trading action remains to be seen … it’s oil, meaning anything can/will happen
… so, I’ll be ready for normal trading and we’ll see what happens … onto the
week at hand.
… 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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