FACTS VERSUS “THE NARRATIVE”

POLITICS & MARKETS: WHAT’S THE DIFFERENCE?

We live now in an age where nothing means anything anymore; language has been cheapened to the point where you can make it mean anything you want, anytime you want. We don’t just see this in the political arena, we see it now in markets as well.

For instance, take the stock indices; pick any of ‘em, it doesn’t make any difference which one, as they are all under the hypnotic umbrella of Central Bankers worldwide [most notably the Swiss National Bank]. The consistent meddling of desired outcomes for the financial elites mandates no volatility and no “upsetting the apple cart” going into the U.S. elections. Therefore, daily ranges have shrunk; intraday volatility has imploded, and stock indices remain upward to range bound for the foreseeable future. THE NARRATIVE MUST BE MAINTAINED AT ALL COSTS.

Which brings me always back to gold, because here the “narrative” almost always gets destroyed [ultimately] by the “truth”, and right now the truth is ugly and getting uglier by the day/week/month and year. The fact is global growth and productivity are plunging, money printing is rampant, Central Banks are in panic mode, the public everywhere is angry, and sooner or later gold is set to “explode” higher.

As we have seen over the last 10 years or so, the vast majority of the up moves in gold occur in Asia, as true money flows “West to East” for fiat, and the manipulators use New York and the U.S. session to sell and push the price lower; give them any excuse, real or manufactured [like Friday’s fairy tale jobs report] and they will sell gold into a frenzy. After all, they just print the money for margin anyway, so who really cares?

Which brings me to today’s action; as I said yesterday, you always have to keep in mind what Asia and early Europe has done for the day so far in terms of “trend” and be wary of the New York session in terms of continuing that trend. Coming in and turning on my screen, I see an approximate $15 range with price hovering about $3- $4 off the highs but far above the white horizontal daily line. I know 1 of 2 things is going to happen; 1) move slightly lower and then retest the highs, maybe making a new high by a few pennies to maybe a buck or two and then a sell off, or 2) a quick move up followed by a reversal sell off that picks up steam throughout the day. In any event, I’m going to be happy with my profit goal of $3 - $5 per Oz. because the range is already $15 and could quite possibly remain that way for the rest of the day.

What we ended up getting is scenario #1, and the algorithm captured a move up to the exhaustion line a few minutes after the start of New York trading. The chart is directly below.

A couple of things to note; 1) after the highs were hit on the exhaustion move [or spike, take your pick], the range is now a few pennies short of $17 for the day; at this point, you’re officially in the “danger zone” for continued new highs going forward from a probability standpoint, and 2) given #1, AND THE FACT THAT MY PROFIT GOAL WAS HIT [about $4 per Oz. on the trade and my goal is $3 - $5], why take another signal from the long side given the fact the news cycle isn’t supporting a daily range above $20? Maybe it happens, I dunno, but it is August [vacation time and trade desks are light] and probability theory says it isn’t in the “cards” at below a 50% chance of occurrence.

Now, in retrospect [20/20 in hindsight is a great technical indicator], the market has moved sharply lower after a large sell order has hit the market and taken us down to 2 lower exhaustion moves within an hour of the highs. Do I take the buy signals from this? Short Answer: NO. Why? Because the range of the day at approximately $17 tells us upside is limited and the market is still above the white horizontal line.

When we buy lower exhaustion hits on an expanding daily range above $13 per Oz. moving lower, and the white horizontal line is above the market, we do in fact have an above average probability of capturing the bottom [for the day or short term] and can expect a decent bounce off of that low IF there’s nothing in the financial news cycle that overrides buying [like an NFP report or interest rate decision]; that scenario isn’t present today, and so I don’t trade going forward today. “Hey, the probabilities simply aren’t there to risk money.”

Now that the market has moved equidistant from the high and low and is sitting on the fence, it’s anybody’s guess what happens from here today; as for me, who cares. There isn’t a cloud in the sky, the water is turquoise, the sand is pure white and the beach beckons with some very cold Corona’s with limes. I’m so 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!”

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!

PATIENT BEAR ALWAYS WINS

It’s  well known fact; what Patient Bear “wants”, Patient Bear “gets”. After all, you gonna tell him different? Well, not me, and what Patient Bear wants more than anything is profits from trading. I got up this morning and it sure looked like maybe we were in for a repeat of yesterday; basically watching paint dry while the hours ticked away with no action anywhere.

For sure, I’ve seen better days in gold, but hey, we got a very modest move up today with the algorithm hitting on all cylinders. Before I begin with today’s algo trades, though, I want to mention 2 things to keep in mind when trading that aren’t part of the algorithm because they are “subjective” in nature and not “objective; 1) Asia & early European moves in gold [both up and down] are very often “faded” in the New York session with the big part of the U.S. sessions moves going in the opposite direction, and 2) when the daily range coming into the U.S. session is below $10 per Oz., very often the first move of the day is a “fake out” to the day’s high or low [maybe making a new high/low for  the day by a few pennies or not] and then moving quickly in the opposite direction for the day; in other words a reversal.

Today saw both come into play as gold moved slightly lower all night, made a move to take out the low and couldn’t do it, crossed the daily white horizontal line for the day and then spent the rest of the day moving to make a new high and put in a new range of the day around $12 per Oz.

I’m using the MT4 from Assets FX today, and going forward starting tomorrow I’ll be using the LMFX MT$ for all gold trades and examples. Assets FX has as 08:00 New York time a server time of 12:00; LMFX has a server time of 15:00.

As you can see, the chart has the day’s white horizontal line, and I placed the white arrow in an area I want to highlight in the next chart by zooming in some.

Now, I’ll zoom out to where the white arrow is for the trade.

 [Note: To make chart larger just single click left mouse on chart to enlarge.]

Since gold hit the exhaustion line, I now wait for plum to get close to yellow [above or below does not matter] and when the slope of plum changes initiate another buy. Below is trade #2 of the day.

Total it all up, and your looking at somewhere around $8 per Oz. profit for the day; time to hit the exit gate.

Even though the range is relatively on the light side at around $12, it’s August and trading desks are light due to vacations, and what’s wrong with $8 per Oz. early in the day and the clear blue, turquoise ocean awaits? [Right, like you’d hang around this slop if you lived in the Caribbean?]

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!

HOW MANY WAYS CAN YOU SAY “PATHETIC”?

Bet on the turtle to get to any finish line today before gold moves a buck; my goodness, how slow can a market get? I had a feeling this was a total waste of time when I got up and saw the currencies and stock indices “dead in the water” right along with gold. Sorry, ain’t playing this game of “chop chop, let’s see where the stops are at”.

This type of action goes to the heart of  the current financial market manipulation going on via the Central Banks; nothing means anything anymore except what some Central Banker says, and then markets move at the speed of light towards some unknown point and then abruptly stop until the next banker pie hole opens up to give us all of his/her wisdom. Rinse, repeat and you have present day markets [all of them].

Of course, the problem in very low intra day volatility markets is the fact that if you’re wrong on your first trade, there isn’t enough movement the rest of the day to make it back; you’re stuck, and there isn’t any movement in price to help you out. Need proof? Well, just take a look at gold in a $3 buck range in New York and tell me what happens if you get on the wrong side of $2 of that and then turn your trade around? Where does the loss get made up and where do profits come from when you can’t even get outside the spread for 30 minutes as you’re moving closer to the close minute by minute?

So, no trades today, although there was one tiny algorithm trade you could have made and wound up with about $1; in any event, a wash day with little to show for getting up. Tee time in 90 minutes … I’m sooo 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!”

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!

EVERYTHING IS “F-ING AWESOME BABY!”

I could spend the rest of the day writing in detail about the lying, cheating math whores at the Department of Unicorn & Fairy Tales [aka Bureau of Labor Statistics] in President Money Laundering’s Regime, but really what’s the point. After all, the “stats” are unreliable and totally made up, “but hey, looky here honey, the SP500 is hitting all time highs!” And bottom line is that is all that matters anymore.

How many times have I warned retail spec traders about sell stops underneath the market a tad below hourly or H4 support? And yet, again today as if market “Newbies” need another lesson in gold trading, the report triggered a vicious $20 per Oz. stop run in about 2 seconds immediately followed by an $11 rally in the ensuing minute. Good luck getting fills in this 60 second interval; may the force be with you [but I’m betting it wasn’t].

After the NFP carnage, there was only 1 trade that fit the scenarios in the manual for a long trade when the gold price is below the daily white horizontal line and before the market started to run out of time. That trade is directly below [Note: click on charts to see enlarged image if it is too small in the blog post.]

In any event, on big down days like this, where there’s news flow [today the surprising upside NFP report] that dictates trading, you have to expect few and far between trades from the long side; and any you do get are apt to be short lived due to the fact it’s a Friday, and those stuck long will take any rally to sell into to get out before the weekend. Going forward into next week, I’d be surprised if we don’t at least get a test of the 1307 level and maybe even 1300 before the week is out; I don’t think the late day selling is over, and the real nasty stops are below 1300. We’ll see, until next week …

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!

THE BOE DOES “STIMULUS”; GOLD JUMPS

Good new for Connor in the pic above; with all that BOE “stimulus”, go to Greece and treat yourself to a couple of hundred high class ladies. After all, isn’t this what they meant by “stimulus”?

Well, of course, most of the “funny money” goes to the corporate types, especially the ones that line the pockets of greedy, corrupt politicians government service officials. The BOE, like the idiots at the BOJ are going to be buying corporate bonds of all shapes, sizes, maturities, and credit worthiness; and of course, given human nature, the worst of the worst businesses will float debt, default down the road, and the British taxpayer gets the bill. Welcome to crony capitalism Obama style; it’s the Chicago way now worldwide!

So, after the “all in, kitchen sink” easing from the BOE, gold jumps. With all the worry on this side of the pond, is there any doubt the FED [most likely never in your lifetime] isn’t ever going to raise rates; the rest of the world is aggressively easing, and most are already in negative interest rate territory. So Bunky, tell me how, with all the talk and bluster from Fed idiots almost on a daily basis that rates need to be “normalized” [umm, read higher] how in the hell they can “stiff” the rest of the world and make the Dollar stronger by raising rates?

I don’t think today’s gold market reaction to the BOE is indicative of the true bullish potential of gold from their actions; the selling manipulators hope now is the NFP report tomorrow with a strong jobs report; that would put the BOE news on the back burner and focus the market on the FED again. However, a very weak jobs report, coupled with the BOE today, and the fact it is a Friday, could trap short traders viciously. The only thing holding this market back right now is the NFP report.

After the BOE, I only made one trade today; the chart below with commentary.

This is a classic algorithm trade; 1) the market is above the daily white horizontal line, 2) plum is below yellow, and 3) the slope of the plum line changes from negative to positive. After initiating the long position, I ride the market up looking for a “spike” up that is abnormally large in relation to the previous M1 candlesticks since the inception of my position; when I see it on the chart, the next M1 that turns red and I liquidate.

Usually, I use this scenario for long positions below the white line; however, since the range is now about $14, and more importantly the market is bumping up against heavy resistance at about the 1366 level, and the fact tomorrow is NFP stupidity day, I’m not willing to ride this position and instead prefer to take the profit.

Let’s see what tomorrow brings in the way of surprises … until then.

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!

CFD’s VS. FUTURES: YOU DO THE MATH

It’s a well known fact the Mrs. Watanabe’s of the world are not a “happy bunch” of ladies; first getting shellacked in the Yen carry trades of 10 years ago, now suffering the brunt of negative interest rates, and now watching declining or stagnate world stock indices. Throw in consistent losing trades in crude oil & gold into the mix, and is it any wonder they are collectively scratching their heads in disbelief.

So, as a “public service”, Yours Truly is making the algorithms available to anybody [even Mrs. Watanabe if she knows what’s good for her!] with free downloads or online viewing of the various algorithms along with important documentation. And where can Ho Lee Sheet & Wat Dee Fuk [along with other traders worldwide] get this financial porn? Easy Peezee; just take your eyes on a walk over to the right hand column and go to “Download Links” and click. All the files are for free at “box.com” and can be either viewed online or downloaded [no sign up needed; just click and view or click and download]. And just so you know, there’s a lot more files on the way.

Which brings me to today’s discussion; should I trade futures or should I trade CFD’s? For my money, it’s an easy answer; CFD’s beat futures hands down. Why? Take a look at the comparison table below of the CME versus LMFX; 2 glaring facts stand out. 1) much more favorable margin requirements, and 2) far greater flexibility in terms of risk management because you can easily adjust your volume levels to fit your trading style.

In the case of gold, specifically, you can trade spot gold in 1 Oz. increments [0.01 lots in the volume box on the MT4] with margin of 1% per Oz., giving up approximately 1 tick to the futures market [where the liquidity provider bank hedges] on fills. For me, if you’re losing money because of $0.10 per Oz., you’re doing something wrong! This is a market that consistently puts in daily ranges of $15 - $23 per Oz. [that’s 150 ticks – 230 ticks], so don’t sit there and tell me that 10 cents matters; it doesn’t.

With the SP500, you’re effective spread with commissions [round turn] is 0.42 index points; since the futures have a minimum spread of 0.25 [and forgetting whatever rate you pay with an FCM for commissions], you’re paying LESS THAN 1 TICK for access to a market that is 1/5^th the size of the futures with approximately 80% less margin needed in your account.

SO, WITH THE OTHER MARKETS, DO THE MATH MRS. WATANABE!

Our “long only” Gold PAMM [managed money] will be ready here in the next few days; the added cost of the PAMM structure is a major problem for money managers, and makes some markets not worth trading or unavailable [hello stock indices & crude oil]; however, since spot gold is considered part of FX, the added cost of trading gold inside a PAMM for all of my clients is only $0.08 per Oz.; and that makes it the most attractive, lowest cost, consistently volatile market traded. Details on the Gold PAMM will be announced when it is ready; in the meantime, over in the “Download Links” section of the website is the link to open an LMFX account, which you have to do first anyway before you can have a PAMM account and participate. So, don’t wait until the last minute to sign up.

One more thing: I’m putting the incentive fee back at 17% of profits to make my PAMM one of the lowest cost structures for investors on the planet; this obviously puts a little more money into your account.

And now for commentary on today’s gold action.

Yup, Al Bundy pretty much sums everything up; sitting here watching this crap waiting for 1) August to be over with, 2) BOE interest rate meeting, and 3) Friday’s NFP to be released, it isn’t surprising there isn’t much interest right now.

So, today’s action? Well, I made one trade, and I had to wait for what seemed like a week. I mentioned in the algorithm manual, that you have to be really careful about buying any kind of waterfall or even down move when there is less than $13 per Oz. range; today points this out in spades, as the M1 had several small waterfalls on the way down, which I didn’t buy because of the small nature of the daily range. Starting at $12 per Oz., I’ll give it a shot, but I would much rather buy waterfalls with ranges for the day higher than $15 per Oz. When you wait, you probability of success is much greater than it is when the range is below $12 for the day.

Now, the chart below doesn’t really show a waterfall to get long, but 2 factors entered my trade thoughts; 1) NFP and the BOE loom tonight and Friday, and we have seen long stops get run for well over 2 hours with plum being under yellow the entire time, and 2) the market coming back and engulfing the 3 previous lows in one M1 candlestick. As the chart shows, I didn’t make all that much on the trade [about $1.30 per Oz.], and the range is still a paltry $12 and change with about 2 hours to go until the close. If I was trading the PAMM, I more than likely would have skipped this trade, and afterwards written the day off as a non event before key reports.

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!

 

ALGORITHM CHARM

I will admit, for a lot of you, patiently waiting for an algorithm signal is going to be tough. Like the cat above, patience is a virtue; only here patience = profits. Directly below are the 2 trades I made today in XAUUSD with commentary based solely on the gold algorithm which you can either view or download in the "Download Links" section of the website in the right hand column.

 The first chart is trade #1 and the second chart below it is trade #2. Many of you will look at the second chart and then tell me, "hey, on the right side of chart #2 is another signal, how come you didn't take it?"

The answer is twofold; 1) the range for the day is over $17 per Oz. for the day [see manual], and 2) I reached my profit goals with the second trade. Why hang around and give back money to a market which is infamous for running stops later in the trading day?

More comments later, but since this has happened relatively early in the day, here in Caribbean Paradise Time, time to hit the links. Tee time in exactly 93 minutes. I'm sooooo outta here on this lovely summer's day!

Have a great day everybody!
-vegas