CRUDE OIL ONLY APPEARS TO BE STUCK IN MUD

 

“Wait! … Wut!!?”

Looking at the daily charts for crude, it appears it’s stuck in mud, going nowhere,

doing nothing, and the world has bigger fish to fry at the moment … however, a

look down into the trading stats shows volume in WTI ranges between 1 - 1.5

million contracts per day, with the micro contract doing 25,000 - 30,000 contracts

per day [one tenth the size] … a glance at the New York session 20 Day Range

MA shows an average range per day at $2.07 this week … can this really be

categorized as “dead”? … well, as history in this market shows, if this is dead,

what’s it really like most of the time? … more VIX than most can handle.

Oil inventories at 10:30 AM EST, the weekly spin of the roulette wheel on

Wednesdays, although inventories has lost some of its appeal for moving the

market … still, when you least expect it, there it is!

And, there it was! … big draw versus expectations, and away we go … I don’t

know what it was that I had expectations today for oil, but hanging around

multi-month lows with stops below 67, I thought the market would make a run

for them … they didn’t, and the inventories report gave fodder to cover

aggressively those who were short, as well as tripping off buy signals … but

what surprised me today was the lack of “trading” … once the inventories

number came out, it was straight up with no corrective activity to speak of, but

only mild sideways action, and then more gains … Hell, if I wanted this, I’d stay

in FX! … I’m prone to think of this as “”one off” action, simply cuz probabilities

being what they are, everything happens to one degree or another.

I would recommend those following and/or trading oil, to go to netdania,com/oil

and set up an m3 chart, with HULL period 13, and the Ehlers Fisher Transform

period 10 … pick whatever colors you want obviously, but treat oil as you would

a crypto pair …, i.e., use the m1 on the MT4 with the special trading algorithm,

and use the m3 at Netdania for perspective … signup at NetDania is free, and

you’ll notice the same patterns as in Bitcoin, but only in oil … be cognizant of

the formations I wrote about yesterday for Bitcoin … TRADE IN THE DIRECTION

OF THE PANIC! … although here in oil, most of the time, you don’t see panic

conditions, but you will see what we saw today … i.e., good move either

UP / DOWN that can be traded! … directly below, the m3 in WTI Crude Oil from

today with the 2 indicators.

click on chart to enlarge

Today saw oil blow through its session 20 Day Range MA by quite a bit … as such,

it has to come back down on corrective activity to an area that puts it back to

normal in the current range … that translate into a move back down to the 69 area,

and up & until we see that, I don’t take any buy signals from the algorithm cuz the

probability of the range getting further extended is small … very small, like in low

single digits … that’s not to say it can’t happen, just that it’s not probable … and

quite frankly, I have no desire to pee into the wind and expect not to get hit

… therefore, NO trades for the PAMM today, we’ll pick up oil tomorrow … quite

frankly, I was pleasantly surprised that the Coinexx oil LP kept the spread at 1 - 2

cents during the inventories report, and thereafter … about time they did

something right, but I’ll give them credit where credit is due … and while there

was too much straight shot activity, it’s activity nonetheless … I think we’ll do

OK here in this space going forward … so far, I like what I see.

And in case people wonder why I’ve always been, and always will be, a short

term trader leaning more to the scalper mode than day trading, it’s cuz it

minimizes risk while allowing me to profit … all I need is VIX and a decent range

with tight spreads … I bring this up, cuz it seems appropriate in light of the

following article posted on ZH a little while ago, the link directly below … “exactly

who is eating whose lunch?”

https://www.zerohedge.com/markets/oil-trader-andurand-losing-more-50-worst-

year-ever

And here’s the “money shot” from the article … pic directly below.

“All of those gains in 2020 - 2022 [that’s 3 years for you Biden voters], don’t

mean Mr. Jack “Diddly” Squat when you then go tapioca to the tune of -50%+”

… unless you’re a complete idiot who does “Stupid Shit” CONSISTENTLY, this

can’t ever happen to a scalper … especially one who makes a living from

trading … Dear Pierre: “don’t confuse brains with a bull market!

… you’re welcome!”

Over in crypto @IQCENT, again we see the ONLY MARKET TRADING THAT

TRULY “TRADES”! … headed into the New York afternoon, and a pretty tame

approximate $400 range since about 6 AM EST … but inside that range some

really good UP / DOWN trading action, with the best trading conditions known

to man! … taking what I said yesterday and applying it to today’s action, and

there’s absolutely no way you lose in this market … PANIC UP/DOWN ALL THE

TIME, SO SIMPLY PLAY IT! … TRADE THE PANIC IN THE DIRECTION OF THE

PANIC … WHEN IT STALLS LIQUIDATE … RINSE, REPEAT, PICK THE $$$ UP

OFF THE FLOOR! … DO NOT … I REPEAT, DO NOT! … ATTEMPT TO PICK TOPS

& BOTTOMS IN THIS MARKET CUZ IF YOU DO THEY CARRY YOUR ACCOUNT

OUT TOES UP WITH A SHEET OVER ITS HEAD!

A shipload of BTC trades today via algorithm buy signals AND proper PANIC

CONDITIONS ON THE M3 HEADING HIGHER … “The Syndicate” UP

APPROXIMATELY 0.8% … given the somewhat lackluster range, I’ll take it for

participants, even though it should have been slightly better … hindsight is

always 20/20, and if there’s ever a market to keep one humble, it’s Bitcoin

… onto tomorrow!

… OUTTA HERE … “The future’s so bright I need 2 pairs of sunglasses 😎😎,

and my own Brinks armored truck” 💓!! … Onward & Upward!! 

-vegas

FOCUS ON FX TODAY … ANATOMY OF TRADING

 

“If I wanna get what I want, I got to do it myself!!”

In theory at least, in today’s clusterfark casino environment of financial

derivatives trading, FX should be … I say “should be” … the default “no brainer”

arena for making money … of course, brokerage house “liquidity providers”

[LP’s] have different ideas on how to foil your trading plans, but they can be

overcome if you’re at the right house trading the right instruments … some

houses cater to CFD’s [stock indices, oil, gold, copper … SIMPLE FX], and

others cater to FX [Coinexx] … today’s focus is on FX, where trading conditions

across the spectrum have never ever been better than they are now … at least

on the VPS, Coinexx spreads are about as good as it gets for retail spec, and

round turn [RT] commissions are utterly meaningless they are so small [$1 per

side per 100,000 notional size of the trade prorated].

Because we’re in 24/5 electronic spot trading, all of the FX pairs, no matter where

you trade, are going to be hosted by LP’s that are large multinational banks … yes,

the cream of the crop of scumbag banks and their trading desks … it’s always the

same group of scum floating to the top no matter where you trade … some

houses make deals with banks to shove order flow … we don’t know for sure

which ones they do this with, cuz offshore brokerage houses share ZERO

information on trading specifics … “here’s your fill … you get what you get, and

if you don’t like it, then leave … end of story.”

There are 2 parts to the trading paradigm for FX … 1) the macro [POLS, central

bank Apparatchiks, and news flow … specifically economic reports that influence

any given narrative currency in the marketplace], and 2) the micro [your trading

model, or algorithm for trades] … never in my entire career, have I been a

position trader attempting to analyze “the big picture macro meme’ … it’s

impossible and it changes frequently enough to kill your account … the POLS &

Apparatchiks make sure of that! 

My entire focus as a trader is on the micro … the v2.1 trading algorithm takes care

of the rest … however, there are factors outside of our control that we need to see

before we successfully trade … 1) “the lowest” or very close to it our cost to trade

any pair … 2) very tight razor thin bid/offer spreads that aren’t bogus bullshit,

along with minimal to ZERO slippage … and that depends on your house and what

they specialize in for traders … and 3) decent enough intra day VIX and ranges to

make scalping worth your while … we need ALL OF THESE, and if you take away

any of ‘em you disadvantage yourself immensely … the focus of the v2.1 algorithm

is VOLUME, and its function as a lever for either “buy fuel” or “sell fuel” … nothing

can happen without volume, and all other indicators start and end with it!

Turning to today’s bus ride to the casino for fun & games, FX can’t decide whether

to fish or cut bait, and “Stock Bellies” are in the same old, same old grind lower

with quick, vicious rallies that go nowhere … the macro meme is killing “Stock

Bellies”, especially the NDX100, as the 10 YR. Treasury yield climbs further today

over 4%, and stands as I write at 4.08% [and rising] … at what level of interest rate

hikes does it dawn on the trading public that “Stock Bellies” can’t take any more

hikes and literally crash? … quite frankly, we’re getting close to that now, and a

“hot” jobs number next Friday from the math whiz kids [the most important jobs

number EVAHHHHHHH!] might just be the catalyst for pushing this overpriced,

worthless bubble shit over the edge back down to reality … until then, we aren’t

gonna see a sustained rally in “Stonks” … just more of the same grind lower

followed by vicious rallies that kill shorts … rinse, repeat and do it again.

Meanwhile over in GBPJPY, one of the worst range days I’ve seen in a good long

while … up to the criminal NYSE open, the range for the day was about 60 PIPS

… that got extended some to the downside after some useless & worthless econ

stats smacked the “Stock Bellies” … but from there it was the “Loser Formation”

until a short covering burst at the London Fix screwed some shorts and bailed

out scumbag banks who were long … and from the whistle ending the European

day, it’s been D.E.A.D. … we finish with an inside day from yesterday, and unless

something happens later in the New York session [unlikely but possible], we

have a pathetic 86 PIP range for the day … that’s about 50% BELOW its

20 Day Range MA.

Over the years I’ve been writing the blog, I’ve repeatedly mentioned the

infamous “Flying Wedge of Death” [FWD] … IMHO, it was always the one thing

that killed professional traders on the floor [back in pit trading days] more than

any other event … it occurs when we 1) get a small range that everybody and

their pet monkey thinks just has to expand cuz no way can it stay here … 2) the

price of the market [any of ‘em] goes back & forth to the high and the low of the

day, maybe hitting a new low or high but not by very much … maybe a PIP or tick

or two but that’s it … it then proceeds to race the other direction and now threaten

the other side of the range and does the same thing … and finally 3) traders load

up each time it makes a trip to the edges, thinking “this time for sure”, and it

doesn’t happen.

The only thing you can do is “leave it the Hell alone” until it breaks the pattern of

the FWD … whether that takes an hour, a day, or a frickin’ week doesn’t matter

… attempting to scalp the edges and take buy or sell signals from your trading

model is suicide! … it may work 10 times in a row, but ultimately it goes against

you, expands the range and then goes into the “Loser Formation” … and now

you’re screwed royally … made 10 trades, won 9 lost 1, and you’re down money!

… and many times a lot more money than you think … as ranges for the day

expand, the probability of an FWD goes down precipitously, and even if you get

one the range is usually big enough at that point to make and take some scalps

… but when it’s unusually tight? … fugetaboutit!

And how do I define “unusually tight” when a market is prone to the FWD?

… when it is more than 40% BELOW its 20 Day Range MA, or in the case of the

“Stock Bellies” and higher than normal VIX FX pairs, the session average that has

the highest volumes and liquidity … for “Stock Bellies” that would be the NYSE

session, and for FX the European session to the London FIX and maybe an hour

or so after that if it’s volatile … all of this means for GBPJPY, that I want to see a

range for the day of at least 90 PIPS, given its current 20 Day Range MA of 165

PIPS … so when I come into trade it around 5 AM EST, if that range isn’t there,

then I wait ‘til it gets there … “getting there” means it will be “trading” and not

sitting on its ass doing nothing, which is what we need to see … and if it doesn’t

get there? … I sit back and paint my toes aqua and swear like I was still in a

trading pit … today I come in and it’s 60 PIPS or so, and then with a small sell

stop hunt cuz they can, it becomes about 85 for the day and goes into the

“Loser Formation” .. well, OK if you insist on not playing, then be that way!

Cuz the real logistical problem for traders when any market goes FWD in a small

range is that it takes very little effort [read money] from the banks/HFT to shove

price towards the edges and in the process scare the living shit out of longs and

shorts … nobody wants to see their sell stop get hit on a fat red spike down … and

so, in effect, a FWD at the edges act like super magnets wanting to pull price

… and even if that doesn’t happen, by definition inside a FWD, what’s your profit

scalp gonna look like anyway? .., HINT … it will be puny … ANOTHER HINT

… YOUR LOSSES WON’T BE! … and that’s why I stay away from them.

Cable/Yen caught today where both pairs are getting smacked lower cuz of

higher U.S. interest rates … every macro whiz kid report is coming in higher than

consensus expectations, along with “sticky” [I’m being nice] inflation numbers

from all around the world … that’s putting a big lid on “Stock Bellies” and their

ability to rally, and likewise it’s underpinning the dollar.

No trades today in the PAMM … GBPJPY opting to not wanna play today, with one

of the worst daily ranges in months that isn’t part of some Holiday schedule … you

have to go back to August 2022 to see as bad a range as today, right at the height

of the European summer Holiday period … truly pathetic, but whaddaya gonna do?

… nuttin’ honey, just move on to tomorrow and make some algorithm trades.

… OUTTA HERE … “The future’s so bright I need 2 pairs of sunglasses 😎😎,

and my own Brinks armored truck” 💓!! … Onward & Upward!! 

-vegas