CHRISTMAS IN OCTOBER

CHRISTMAS COMES EARLY FOR BULLION BANK DEALER DESKS!

What a frickin’ mess; yea, the gold market too, but I’m talkin’ about the torrential rains on the backside of the humungous Hurricane Matthew here in the Caribbean. We didn’t get all that much wind, as I’m southeast hundreds of miles from the actual hurricane, but the rain kept coming, then coming some more, and at times I felt like I was auditioning for “Noah’s Ark”. The cleanup has already started, but it will take a few days for the flooding to subside. I can’t imagine the horror of being straight in the path of this thing.

The worst thing that could possibly happen after yesterday’s debacle in gold, was to see a sharp $4 - $5 rally out of the gate from the New York open; any early strength will be sold aggressively, and the only thing that can turn this market around is a lower sharp selloff in early New York trading followed quickly by a rebound above the drop … mindless chop during the mid hours … then strength going into the close that traps the shorts. If you’re looking for gold to go higher, I’m pretty certain this is the scenario you have to see, and as long as early trading has strength, it will get sold hard.

Of course, it was Christmas in October for the bullion banks and dealers, as their “bullion wall” of selling these last few weeks has definitely made their year, as they buy on the way down from long liquidation from retail and hedge fund specs.

And while I saw this drop below 1300 coming, and wrote about it extensively in blog posts before, I didn’t really think it would be as “orderly” as it was; I was expecting more of a total flush of the stops in one fell swoop, and instead we got wave after wave of sell stops in the range of $3 - $6 on the way down. In any event, it was the event of the year for bullion banks and dealers.

Coming into today’s trade, after the downside debacle yesterday, there’s no way I’m getting long gold unless we get some kind of waterfall or lower line exhaustion hit, for the very simple reason that rallies today and for the next few days will be sold aggressively by the commercials and those longs stuck from higher prices yesterday. So, get ready for some very choppy and nasty price swings for at least the rest of this week with a very negative bias for price, especially the first half of the day. Today’s one gold trade directly below.

I wrote a couple of days ago about the “new” CFD stock indices at ASSETS FX and I also questioned whether trade conditions could be kept and whether or not the whole exercise is a “bait & switch” brokerage house/LP operation. Well, it didn’t take but a day for round turn commissions to be added to the mix now did it? It appears, at least for the DOW30 CFD, that RT commissions add approximately 1 index point to the net cost, so you’re looking at an effective spread of 2.4 index points. Still not bad [I give it a “B”], but it makes me wonder what changes comes next as I don’t trust these guys one damn bit to do the “right thing” and keep conditions stable. Maybe they prove me wrong, but so far it only took them one fucking day to introduce commissions, and if they raise the spreads I’m going to go ballistic. We’ll see what happens … stay tuned.

You simply have to realize that outside of electronic MT4 trading in FX, which is about 15 years old [and XAUUSD is considered as FX], all of the other CFD markets are relatively new; stock indices, interest rates, and commodities are going through the “growing pains” FX went through years ago. Hell, I can remember 10-12 years ago when the EURUSD spread was 4 PIPS, and FX crosses like GBPJPY had spreads of 7-8 PIPS and that was considered “cutting edge”. Now, of course, due to competition from hundreds of brokerage houses across the world instead of dozens, spreads in FX are at the same rate they used to be on the trading floor, where traders paid hundreds of thousands of Dollars to join the exchange to trade.

This will eventually happen in the CFD’s, but one major difference is the role of the U.S. Government in “strong arming” LP’s and/or brokerage houses to 1) either don’t offer the CFD products [so as to protect the corrupt CME and their futures contracts], or preferably 2) do not accept U.S. clients, or if you must offer these products, 3) offer them at high spreads and commission costs so as not to create competition with the CME.

Eventually, all the CFD’s will go the way of FX, and trading costs will come down to level, that if you are an LP and/or a brokerage house, you won’t have a choice in what your spreads and costs are because they become “standardized” across the industry. For example, is there anybody out there that would trade GBPJPY with a 7 PIP spread at any brokerage house, when you could trade it “net” at 99.99% of all other brokerage houses at 2.5 – 3.0 PIPS?

For a long time, before the CFD’s came onto the MT4, spot gold was all over the place in terms of where brokerage houses and LP’s offered the spread; up until only recently the lowest was $0.50 and the highest I saw was $1.50. Imagine trading gold with a spread of $1.50 versus now at about $0.25 “net”? Yes, it makes a hell of a difference to your bottom line doesn’t it?

So, with their latest pricing schemes, stock indices at ASSETS FX are an upgrade from where they were prior to 10/1/16; the best conditions are in the DOW30, followed by the SP500, and then the DAX30. I’ll have the volatility algorithms for the DOW30 and the SP500 ready for release relatively soon.

Well, here we are at Noon, and despite 3 trips up to the upper exhaustion lines at RM=1 in gold in the last hour, price is right back down hugging the lows near 1266. This is going to be a very messy trade the rest of this week, but I’m hoping tomorrow for a lower New York “out-of-the-gate” open that takes prices lower; it’s the market’s only chance for a rebound into the close that pushes prices higher.

The dog didn’t handle all the rain well, and he’s chomping at the bit to get to the beach, where I’m hoping it doesn’t look like a garbage dump of storm debris. In any event, I need my Vitamin C therapy [Corona’s & Limes] and I am sooooo outta here.

Have a great day everybody!

-vegas

OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”

ALEX, I’LL TAKE IDIOCY FOR $200 PLEASE

“What is trading market moving reports!”

Ahh, you just can’t beat a good ‘ole crude oil inventories report during market hours to “shake things up” a little; or maybe a lot. Truth is, this report every Wednesday morning at 10:30 Big Apple time moves stock indices, which moves gold, and causes numerous cases of heartburn, indigestion, and most importantly loss of money around the globe. “Hell, it’s so early in the day, Her Royal Highness Cankles Clinton hasn’t even had her first seizure of the day yet, and already huge sums of money are lost!”

What I was looking for coming into today for a higher gold price should be obvious to you; namely, 1) a lower price in Asia [can these guys ever do anything right?], 2) a false move down early in the U.S. session that is rapidly turned around, and 3) a daily white horizontal line that is below the market price so I can get long on the plum line slope change. Easy Peezee if you simply wait for it and today we got it. Directly below is the trade.

After that, there were some other algo trades, which if you took them, you made money, but I didn’t because I don’t think gold has that much on the upside from the new high before it hits the “bullion wall” from commercials yet again.

Over in oil, it was/is … well … nothing short of a total clusterfuck, what with the weekly inventories destroying every buy/sell stop in sight within the span of about 90 minutes. As I said in the manual, leave this report alone unless you need tax losses for the year.

Further complicating trading over the next 5 business days are 2 factors; 1) Fed “blackout” period for Pie Holes giving chicken dinner speeches is in effect, thus depriving the HFT’s in every market the chance to front run prepared speech remarks they get early for a basket full of cash, and 2) the BOJ is floating practically every “trial balloon” known to man before their meeting next week of Kuroda & Crew, and they haven’t the slightest clue what to do, but don’t worry, they’ll be sure and do something that redefines the phrase “stupid shit”.

What could really throw a “monkey wrench” into things is a breakdown in the SP500 below critical 2100 support in the days ahead. Selling could really intensify from 2 sources; 1) risk parity funds, and 2) options traders that need to sell because of “gamma” exposure. If this seems a little “esoteric” to you, just realize that “selling begets more selling” forcing those who have downside exposure to losses to sell whether they want to or not; it’s not a pretty picture.

Of course, none of this would be a problem if it weren’t for the fact that Central Banks around the world are pumping hundreds of billions of dollars a MONTH into financial assets, and still their policies aren’t worth a damn and haven’t produced the desired “outcome”. Solution? Why more of the same! Because nothing says fucking morons better than doing the same stupid shit over and over again and expecting a different outcome.

The problem for gold, is that nobody really knows what the reaction is going to be in the market when the clueless Twits at the Fed & BOJ get together and “alchemy” themselves into another corner come 9/21; if we really want to see higher gold prices, then the commercials have to have an “out” first, and that “out” is a break below 1300 on a manipulated waterfall where 2 things of critical importance will take place; 1) every long in the books will have been stopped out from Brexit, so retail specs are screwed once again, and 2) commercials can buy at or near the bottom covering shorts and making massive profits.

Too be sure, I’m not as concerned about the absolute price level of 1300 as I am about “the action”; in order to go higher it almost certainly has to happen like this.

The day after Labor Day notwithstanding, daily ranges have dropped significantly; from $15 - $23 to now around $9 -$12; what this tells me is that the trade is uncertain about price and unwilling to make position commitments ahead of the Fed. Why would anybody make big bets [unless you are a certified bullion bank and get inside Fed information] ahead of a decision, where every 2 or 3 days for the last 2 months some Fed Pie Hole has a different take on rate hikes.

Do you wonder why large hedge funds have been forced out of business in record numbers the last couple of years or why FX trading is down 30% over the last 2 years? Well, you don’t have to look very far other than a Fed that “changed the rules” of the game and didn’t let other players know about it; throw in Kuroda & Crew from hapless Japan, and there is almost no way you can make money positioning anything before you get whipsawed by these clowns.

And so, given what I just said above, what we should be seeing in gold is more “whippy” price action, almost like what we see in crude oil. But we don’t do we? Why not?

What makes most sense to me is that the “bullion wall” of selling is there because the bullion banks know what is coming 9/21; I don’t have any doubts they get preferential treatment from inside the Fed and the BOJ. “Hey, mistresses have needs too OK?” And without any semblance of a rally being seen the last week, except for today’s small few bucks, how do the bullion banks exit this? Well, they do it by being on the other side of a manipulated waterfall that is coming; and boy is this market ever due for one since Brexit!

Now, I could be totally wrong here, and maybe gold takes off to the upside before the Fed meeting on massive short covering and new buying; fine, I’ll follow the algo and still make money [like today], but I don’t see things playing out like that, and the market action, at least to me is one where the sellers are very much in control of the market right now with no indication that it’s going to change.

Have a great day everybody!

-vegas

OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”

OUR LMFX GOLD TRADING PAMM WILL BE READY AS SOON AS LMFX GETS THROUGH WITH UPGRADES TO ITS PAMM SOFTWARE! WE ARE VERY CLOSE; OPEN YOUR LIVE TRADING ACCOUNT TODAY, FUND IT, AND BE READY TO PARTICIPATE!

I SMELL TROUBLE FOR GOLD

OFFICIAL MOTTO OF XAUUSD

Where do I start with this POS Friday? What we are seeing is a complete breakdown of markets across asset classes, as “rate hike” fever grips the globe from Germany to Japan and then hits the U.S. this morning with rumors all over the place in the face of more grim economic statistics. “Ummm, nope, no rate hikes … hang on a sec there pal … wait, what?... how can Fed Funds futures be rallying for a rate hike? … Ummm, yup, rate hikes are on the table again … Ummm, wait a sec… What the hell am I doing?”

And so, at midday, that pretty much sums up the trading day as gold gets bounced around like a ping pong ball at a Chinese party; up, crashing down, and then spiking to the upper exhaustion lines on … wait for it … absolutely nothing but hot air and panic before moving lower again; all in the confines of about a $4 - $5 move.

Coming into this morning the range was small at $6 and change, and it didn’t look like any market was up to anything; but then “rate hike” fever started hitting the stock indices and the $4 “up/down roller coaster” ride was on in gold. For my part I didn’t do any trades today for the simple reason the range was just too damn small; hell, even a move of $1.50 and you’re only a couple dollars away from a high/low for the day. Sure, there were some algo trades you could have made for a very small profit, but I can handle the consequences of missing them for a bigger range.

But, I think gold is in real trouble up here in the 1330’s, at least up and until the FED and Kuroda & the boys at the BOJ get done with their madness in about 2 weeks time; while we may tread water up here, the action in the marketplace has me concerned.

There is no question in my mind that the manipulators [FED & BIS] and their bullion bank accomplices are making a “line in the sand” at the 1355 – 1370 price area, and the action of the last 3 days really confirms it. Coming back from Labor Day Holiday, this past Tuesday saw gold have an almost $30 range for the day, with the close only a couple of bucks off the high closing right around 1350. Since then, it’s been straight downhill, and today we find ourselves well below the important 50% retracement level that should have held.

Not only has it not held, even the Asian perma bulls aren’t buying the last 3 days! Directly below, the trouble brewing on the HR1.

I bring this up, not because I am some kind of gold guru, but simply to point out that if we get below the 1310 – 1315 area next week or the week after going into the BOJ & FED meetings, you have to be very, very careful about being long with a stop below the market; the potential is very real for one of the manipulators to drop $5 - $10 billion in gold notional [10,000 – 20,000 futures contracts] and blockbuster this shit lower anywhere from $10 - $30 in a couple of seconds. And guess what? Any sell stop you got is going to be filled at the bottom, and what you thought was going to be a $3 loss tops, becomes a $25 hole in your head from the shotgun blast, thank you very much manipulators.

I see this as a very real possibility, for the simple reason next time down into the 1310 – 1315 area, a lot of traders will be in BTFD mode with tight stops to “protect” them. If this comes about, it won’t be an easy ride down into this area, but once there, it could get ugly really quick; a lot quicker than most of you realize.

What we have seen these last 3 days is nothing short of a “bullion wall” of selling from bullion banks & dealers; you would think there would be some kind of test of the 1353 high set on Tuesday; but instead, only the most very modest of rallies have come about in Asia, home of the almost always “buy gold all the time” mindset, and those got sold rather quickly in Europe even before we opened here in the U.S. In other words, commercial selling has “smothered” the living shit out of gold this week. Why?

I seriously think the FED is going to raise rates on September 21, and the BOJ is going to “talk back” some of their easing; both will have immediate and negative trade ramifications for gold, and I think the bullion banks know it and have been told this is the case.

It only makes sense when taken in the construct of the fact that the bullion banks & dealers need to be the buyers of the $10 - $30 waterfall in prices from the manipulators market sell order; they can’t be seen as sellers, only buyers, because when the “fingers” get pointed from the clueless regulators the banks & dealers will say, “hey, not us, we were buying not selling.” But the key is, they have to get short a shipload of gold first, and they have done that this week in spades.

In addition, the FED has painted themselves into a real corner with loss of credibility; they very much feel the “slings & arrows” of those who “pooh poohed” their idiotic rate hike “dot plots” in early 2016 [Remember those? There were supposed to be 4- 5 rate hikes this year.]. They are being led by a clueless Grandma, who I think is about to “shock & awe” the stock market with rate hikes, and at least for the short term, gold right along with it.

The new crude oil algorithm manual and mq4 files will be up on the website sometime tonight; as always, if you have questions/comments drop me a note at traderzoogold@gmail.com and I’ll get back with you ASAP.

Have a great weekend everybody!

-vegas

OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”

OUR LMFX GOLD TRADING PAMM WILL BE READY AS SOON AS LMFX GETS THROUGH WITH UPGRADES TO ITS PAMM SOFTWARE! WE ARE VERY CLOSE; OPEN YOUR LIVE TRADING ACCOUNT TODAY, FUND IT, AND BE READY TO PARTICIPATE!