WHAT WOULD MR. PANOS DO?

“The Oracle at Delphi speaks! [And then has another ouzo.]”

Well, that was a “nothing burger”; oh sure, a few shorts got blown out of the water … natch … but other than that, all the establishment banker types in the world are yucking it up over the rubes who paid “big time” for option protection; “that giant sucking sound you heard Sunday afternoon in the U.S., was options premium imploding right before your very eyes, as the LePen versus Macron in 2 weeks was expected”.

And in “troubled times” like these, it’s nice to know Mr. Panos is around for some sage advice on dealing with all of these panics the last few years; having lived first hand through the Greek crisis, Brexit, the U.S. election, the Italian crisis, the banking crisis, another Greek crisis, and the Netherlands election; and in his own words, a few choice comments on the French Fry election.

“It don’t matter; stupid French can’t even make a decent car anymore. They’re like us … kinda … only maybe 10-15 years behind the socialist curve … we Greeks on the other hand are right there on the cutting edge of “free shit” … you want free shit, be Greek baby! … Germans can’t say no to us, and the EU sucks … BUT! … hooker prices are down, ouzo is cheap, and I can watch soccer on the telly, so who cares, they’re just stupid French Fry Twits”!

All in all, a pretty normal weekend … President Trump trolls the MSM and Leftists everywhere lose their minds [again], the NYT is caught yet again in another deliberate journalistic lie, this time with the New England Patriots visiting the White House but since Libtards everywhere could care less about facts than a narrative agenda, everybody chuckles under their breath and moves along, and of course in Chicago, it’s business as usual with 5 killed and 26 wounded over the weekend in EX Preeezy Chalky Soetero’s beloved hometown, where local Pols & murderous gangs team up to fleece the local morons, idiots, complete dumb asses citizenry and put cash into their offshore accounts from numerous illicit activities; “You don’t think anybody in power wants to see this ‘cash cow’ disappear do you? … Ahhh yes, normal everywhere … good times”!

Scanning the financial horizon this early A.M. sees the shorts yet again crushed in their hopes for Armageddon; “Never, ever, bet on the end of the world … Why? … Cuz it can only happen once! … And even if you are somewhat right, you are joined at the hip with all the other financial “doomsday preppers” and get to stand in line and try and cash in your winnings … good luck with that fill”. EXIT QUESTION: “Where can I sell an SP500 put this morning”? SHORT ANSWER: “At the bottom”.

Not that any of this matters much to the elite socialist French Fries; you know, the ones who live the capitalist dream with expensive cars, multiple houses, lavish travel, and plenty of graft, corruption, & bribery to replenish the coffers [“Bernie, you go girl”!!]. Nope, they can rest easy now; one of their socialist “milk sops” made it to the magical second round, where when elected absolutely zero will change; terrorists will still kill, immigration will continue unchecked, the socialist state will continue to grow and rob productivity, and of course the globalist corporate agenda where the elites have placed their undying trust [hello Super Mario] will make them even richer while continuing to gut the middle class.

And there you have it in a “nutshell” why the DOW30 is up about 200 index points on the New York open; “Ok, we dodged another bullet … whew! … now let’s kill the shorts for their insolence”! It really isn’t any more complicated than that; and while the junior MBA’s manning the FED’s “Plunge Protection Team” are a little disappointed they couldn’t “spring into action” overnight, free beer and pizza at Squid & JP Morgan’s trading desks last night, I’m sure, eased the pain of Sunday night “work”. “Damn, we don’t ever get to hurt anybody”!

The world is “safe” now from the “populist wave” goes the thinking and it’s back to global fascism in all it’s glory for the 0.01%; “Everything is F-ing AWESOME baby”! Only in reality it ain’t; France will get worse, Europe is rotting from within, and the number of people who are “waking up” is growing. All that has happened in France is that another “bigger” band-aid has been applied to stop the bleeding; the patient still is on life support; none of the other band-aids have held; what makes you think this one will?

How many Syrian or other MENA refugees live next door to Obama? Cankles & her serial rapist husband? Pelosi? Schumer? Merkel? Hollande? Tony Blair? Corbyn? Members of the ECB governing council? Well, what’s good for the goose is good for the gander, isn’t it? Apparently not, cuz like all progressive elites who think they know what’s good for you cuz you’re way too stupid and pedestrian to know anything of substance after all, there’s one set of rules for the rubes [voters] and another for the ruling elite.

 

“Guess the animals that think they are MORE equal than others”?

It’s taken way too long, but people are finally figuring it out; while the MSM spits out globalist propaganda en masse [“NYT, WaPo, LAT, please call Dr. Goebbels office immediately for your daily instructions”.], people can see their lives eroding right before their very eyes.

So while the ruling globalist elite can smile today cuz they got “one of their own” as the prohibitive favorite to become President of France on May 7^th, and mold him into the “milk sop doormat” they expect where zero will change, people are waking up to the fact they are being “played” and that the term “democracy” means nothing while globalist “corporate fascism” means everything. The clock is ticking; enjoy your ride while it lasts.

A little bookkeeping note before the trading day starts; yesterday I updated the “Download Link” files and brought all of them current to the version 3.2 volatility algorithm. For you Newbies out there, for which this whole trading process is totally new and foreign, the MT4 setup & install, along with detailed instructions on how to get the version 3.2 algo up & running on your screen, is available for viewing either online or you can download the PDF. All files are available at box.com in my “shared files” directory, and are of course free of charge to any and all who want them. Next weekend I’ll have updated historical charts of the Dow30 with exhaustion “hits” [SDEV lines], along with appropriate commentary.

Turning to today’s Dow30 market …. “Everything is F-ing AWESOME baby! … What with the index up 200+ points on the open … “nothing to see here Sheeple, move along; just some shorts that got shot and killed. Please Ma’am, no staring cuz it’s disrespectful; everything is fine now … move along”. Ok, move along to where exactly?

About half an hour until the NY open; boy are things quiet … not sure what this means, but since shorts always panic first, I’m thinkin’ unless some sell pressure starts showing up pretty soon, we could be in for a slow, steady march higher to the 20850 – 20900 level before it’s over; we’ll see how it shakes out as the day goes forward.

Ok, an hour into this mess, and it’s …. Crickets! … “why should anybody be surprised really after opening up 200+ points on all that wonderful globalist news from Vichy France”?

And in case you’re wondering, directly below here’s what today’s institutional indices traders want you to think they look like during the day when everybody is trading.

Here’s what they really look like up close and personal.

 

It always helps to know who and what you’re dealing with.

And as the economic data [hard & soft] gets worse, then “worser”, and then “worser-er” by the day, I can’t help but think the Twits over at the Eccles Building in D.C. might be just a tad worried over the state of the state. Not to worry, though, cuz … hell, I can’t think of a decent truthful explanation, except that everybody and their brother is bearish the indices and in the history of trading markets, the universe does not allow all of these people to win on ridiculously expensive “tail risk” option premium bets. Until this goes away [and a few learned this lesson the hard way this weekend past], don’t look for falling markets anytime soon; that doesn’t mean runaway to the upside, just if you’re bearish wait until the money is in your pocket before you go down and pick out that brand new, shiny red Mercedes 380SL.

It’s Noon in New York and … “hey, somebody check my internet feed and see if it’s still working cuz I don’t see anything moving”… Yup, it’s that kind of day again; to be fair, an awful lot of “stuff” between now and Friday that comes out, so as has been typical of markets these last few years, why trade when you can sit?

At this point, after what I’ve seen so far today in the stock indices markets, it looks to me like there is some rotation out of U.S. equities and into the Dax30, and any strength so far today in the big cap Dow30 stocks has been sold, while the Dax30 soars to new highs not seen in a long while; it could be a EURUSD play right along with an equity exposure play. What’s not to like if they both go up over the next year?

And while the Dow30 is up about 200 index points on the day as I write, it’s been there since the Sunday night open; granted, we got the “relief” rally cuz the globalist puppet Macron makes it to the final round where he is expected to win easily; right now, though, we aren’t seeing any follow through at all [zip, zero, nada, & zilch] on the buy side from the open, and that opens the downside to long liquidation as we go from the Noon hour into the close in about 4 hours. And if the bids dry up and we get some more institutional rotation [at any price], a small correction has the potential to turn into something far more serious on the down side; not predictin’, just sayin’.

From where I sit, there isn’t anything to do but wait; there isn’t any break and there isn’t any rally. Signals don’t mean anything when you get into a ± 20 point chop from the open, as they lose all of their statistical significance when there is no movement in the market. It becomes simply a flip of a coin.

Two hours until the close, and there’s more interest in a spelling bee in Utah on ESPN 4 than trading; some of the slowest action I’ve seen recently. Not really any interest in pushing stock prices higher from here from what I can see. Any and all rally attempts today, since the New York open have been quickly sold; more of that European rotation I mentioned earlier I think at play than anything else; when trading desks see this they back away cuz they don’t want to get caught on the wrong side of a move they can’t make back today. And that move up to the high of the day in the Dow30 between 2 & 2:30 P.M. for a tick or two? That was one of the sickest moves up I’ve seen in a while; mystery ticks that attempted to set off buy stops that either are non-existent or are higher up failed miserably.

Thirty minutes to the close, and I’m calling it a day with no trades; simply no time room to operate even if something did happen, which it hasn’t. If it’s any consolation, nothing else moved today either after the New York open, so it wasn’t like the stock indices weren’t the only ones that didn’t want to play today. Yes, it’s frustrating it can move 200 points on the open and then for 23 hours do exactly nothing but about ± 20 – 25 points from the opening bid in New York. Tomorrow is another opportunity and we’ll be there … all it has to do is move!

 

PAMM/MAM spreadsheet directly below. 

Time for the beach! … I’m outta here … until tomorrow.

Have a great day everybody!

-vegas

OUR ‘TURNKEY FOREX’  PAMM/MAM  IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

SNAFU FRIDAY

“And if that doesn’t work, you can trade stock indices!”

“Oh, those nattering nabobs of negativism”! For those that don’t know, that was the money quote from our illustrious ex Vice President Spiro Agnew [I never saw a highway construction contract I didn’t like] from way back-in-the-day of the early 70’s, when confronted daily with the various allegations of illicit slush funds, construction rigging, and various other forms of “business” that is normal in New Jersey [then and now], that forced him to resign as Nixon’s VP. As ex Mayor Richard Daily of Chicago once quipped when asked by a reporter if a “business associate” got a no bid city contract for “services”, “if you can’t help your friends out, what’s the point of being mayor”? “Logic is a real killer sometimes, isn’t it”?

Which, I guess my computer is broken or something, cuz if it’s a new day, Zero Hedge [ZH] just “gots to have” at least one negative article or post [most likely multiple] on the most over-valued, pie-in-the-sky, “tulip bulb” mania, house of cards known to man, the U.S. stock market. Alas, just when you thought maybe one day per week the doom & gloom could subside, here come the cockroach bears out of the woodwork overnight with another installment of why SHTF is the best thing that could happen going forward.

Today’s lucky contestant [PTJ, come on down!], none other than Paul Tudor Jones, says the market is over valued cuz “market capitalization of the SP500 versus U.S. GDP” is too high, suggesting that means lower stock prices. “What exactly this useless piece of business school econometric modelling is supposed to mean I haven’t a clue”. Well, I got an indicator too, and it says the market will only go down substantially when most of you guys turn bullish and throw the proverbial “towel of surrender” into the ring; from where I sit, the “in vogue” call du jour is too be as negative as you can be to garner as much press as possible.

Eventually, all of you financial assclowns will be right, but forgive me for not running to my computer and hitting the sell button, when for about the 4,365^th week in a row you’ve been calling for a crash, that not only hasn’t happened, but has seen indices rise substantially to boot leaving you looking somewhat stupid. NEWS FLASH: the U.S. markets will go down substantially 1) when they want to and not before, and most importantly 2) when there is an over riding “out of the blue” [black swan] structural and/or systemic risk to the U.S. economy or corporate America that threatens “business as usual” going forward. Until then? Fugetaboutit”!

So here we are, a few hours before the open, markets scared to death to move anywhere; shorts still looking skyward and asking, “Why have you forsaken me yet again”? Meanwhile, longs uttering, “Why was I so stupid to sell”? Over time nothing changes but the names.

I remember vividly the early days of stock indices trading, when the pork belly bigshots and some of the various livestock “movers & shakers” would come over to the SP500 pit after their markets closed about 12:45 or 13:00 each day; got another 2 hours or so of action, what could possibly go wrong? Well, a lot did, cuz these guys were used to “shoving” a market around and having their collective way; a little up and little down … you know, a little back and forth to scalp and make some money. They get into the SP 500 pit, and they got 23 year old kids fresh from vocational school filling orders for Squid & the boys, 100 – 500 contracts at a crack, with no end in sight if you happened to take part of that order; they were 40 bid for 200 contracts, and then a couple of cattle locals hit ‘em [feeling all smug], and 2 seconds later here he was again at 45 for 500 contracts, and now bigshot, whaddaya gonna do? Well, I will tell you; you pay 75 to get them back, add up the damages, walk out in a huff, and swear off S&P’s for the rest of your floor trading days, cuz it’s now gonna take 3 weeks to maybe a month to make back in the friendly environs of cattle what you lost in 5 minutes from that “Squirt” who shoved the SP500 so far up somebody had to make an emergency call to a dentist. “Thanks, come again”!

And so it goes, from back-in-the-day to now and well into the future; the only way to successfully trade the stock indices [Dow30, SP500, & NDX100, and maybe the Russell 2000 if you have access to it] IS TO TREAT EACH DAY AS ITS VERY OWN BULL OR BEAR MARKET, with the understanding that 80% of the time it goes up, so in most cases BTFD is appropriate no matter what the “nattering nabobs of negativism” say on ZH or elsewhere”!

Turning to today’s Dow30 market … overnight very quiet; not even the terrorists in France who shorted futures before the attacks can make a buck being short … what’s the world coming to when you shoot the place up, kill some innocents, and nobody cares?

Only thing for sure I know with certainty is that once this weekend is over, it concludes 5 ½ months of the worst trading environment I can remember; event after event, ad infinitum nauseum, from the start with U.S. elections now to the end with the French Fries, sprinkled with inaugurations, FED meetings & an interest rate hike, BOJ nonsense, ECB further nonsense, NFP reports, and other assorted distractions that made trading either total “speed of light” or … crickets. The stock indices should trade well going forward; up or down, who cares … it’s the “sitting”, waiting for events that come and go that drive me to Vitamin C therapy, and looking ahead it’s clear sailing with the usual government antics always on the horizon.

About an hour into this mess, and I can already sense the “unease” in the market of either being long or being short… memories being what they are, plenty a trader folk the last 48 hours with their own “there’s a million stories in the naked city” to tell you about the mess they dug themselves into, but not out of. God, will I be glad to get into next week.

And for what’s it worth, all the people who bid “protective” option premium [especially puts] to the ionosphere these last weeks in anything & everything cuz the French Fries are gonna cause a financial “tsunami”; congrats, you paid fire insurance on your house while it was on fire, and when the dust settles Sunday night, and all probabilistic events collapse to “0”, while the outcome goes to “1”, you’re going to take a trading loss no matter which side you bet cuz those options aren’t worth ‘butkus” anymore come the PM on Sunday. And whatever happens in France, 1) the French Fries deserve what they get, and 2) it will change nothing except the optics of the EU is still a POS meme going forward. Truth be told, France is on a collision course with the destruction of their own culture & civilization, like so many other European socialist kitty litter boxes whose “liberal & enlightened” PC Pols got their heads in the sand [not all but most, with Poland & Hungary being notable exceptions]; it’s a slow motion train wreck all for the sake of progressive vote getting patronizing an immigrant horde that wants no part of French [or any other] assimilation, and would rather kill you than look at you. “Oh, by all means, let more of them in … while they are killing your countrymen in Paris you can pat yourself on the back for being ‘tolerant & enlightened’ … useful idiots all the way down”.

If there are any surprises today, they may be on the upside later in the day … I just don’t see or feel like there is an appetite in the market for selling after what happened yesterday. We’ll see, but an hour and a half into this and the quietness of the trade will eventually panic some shorts; where that takes us I have no idea, but ideally it would be from lower levels that stall with some kind of 3 bottoms move or a triple bottom formation of some kind. So far, there have been no signals of any kind, bullish or bearish, off of the turns in this so far quiet session.

Ok, just when you got things figured out … and the market cooperates … boom! … LP shenanigans. Off of that bottom, the first legit buy signal of the day with a bullish engulfing pattern @ 15:16… but wait a sec here … as the M1 is closing the bid/offer spread on my screen goes from 2 to 5; so I go from 20555 bid – offered at 20557 to 20555 bid – 20560 offered … “umm, WTF is this”? … I may be a lot of things, but a chump who trades Dow30 with a 5 index point spread ain’t one of them … and for the next 6 minutes the spread stays at 5 … then it goes back to 2, so I’m figuring, “Ok, LP glitch, things are back to normal … but no … as soon as I’m in long, the spread goes back to 5 and stays there … now I’m pissed … so when the market peaked its head above my fill, I liquidated to get out of this … don’t want to be in this if this is the kind of crap they’re gonna start today going into the weekend. My suspicion is they know what’s coming and want ‘protection’ … F-ing scumbags is what they are, always wanting everything both ways”. First trade of the day directly below with commentary.

 

[click too enlarge]

So natch, as soon as I’m out of this clusterfark I’m on the phone with management ripping a few people a new one … “yes, we see what happened … yes we understand your concerns … yes, we will talk with the main LP and find out what happened … blah blah yada yada”. And nothing ever happens, nothing will ever be admitted, just like Deutsche Bank the other day, getting fined $175 million Dollars for FX price fixing, and then saying, “see, everythings Ok, you can trust us now”! It’s the same thing here; up until this little episode, the LP in the Dow30 has been perfect. Zero slippage on market fills and I got no problems. This “glitch”, though, happens right as the market is making a new low and then reversing … and if it was a pure glitch, why didn’t both the bid and offer change, why just the offer, huh? … I’ll tell you why; cuz it was no glitch … the LP sees the big bids below the market and doesn’t want to sell cuz maybe he/she can’t offset in the futures market as the market starts to rise, and so adjust the spread … who cares if some customers get hosed? [Besides us?]

And now, about an hour and twenty minutes later, the feed is as smooth as a baby’s bottom; “see, it was just a little technical IT computer network glitch, no big deal; all better now”. “Yea well, how come these so called ‘glitches’ always screw me and not you? Any professional guesses Mr. LP, cuz 100 out of 100 times I’m the one who gets the short end of the stick. And today, right at the bottom to the second on the rebound… and it’s the offer that gets ‘jacked’ 3 index points … just a glitch … yea, sure … only an explanation a regulator would believe. We’ll just see next week at highs and lows during the day what happens, and how many more “glitches” there are that are just pure accidents; I see another one and I’m gonna be all over somebody’s chili.

“Did I do something wrong? More importantly, do I still get some bacon”?

And I see the dog sitting there eyeing me suspiciously, wondering to himself if he did something to piss me off; I look at him and I’m thinkin’, “yea well, now you know how I feel 99% of the time with the Mrs.; what’d I do, what’d I say”?

“It’s simply amazing what 4 pieces of bacon, 2 slices of deli roast beef, and a piece of mild cheddar cheese [his favorite] does for your mental outlook; voila! … he’s ecstatic!

  

It’s 1 P.M. in New York now, my blood pressure back to normal, and things have slowed considerably here in the early afternoon in the stock indices. Prices slipping some … and whoa, WTF was that? … 50+ point slide in seconds … did a new French Fry poll just come out or is it the drop in crude oil? … and now, as we make the turn to the close, it’s the longs who appear in trouble … anybody not remember what I’ve been saying about the stock indices this entire week? Elevator up … out the window … elevator up … out the window; anybody see a pattern here besides me?

In the complete madness of the last hour [out the window -50+ Dow points in seconds, followed quickly by “elevator up” … “hey, sorry about that 50 point massacre that took your sell stop out; never mind”… now we’re back to where we started an hour ago … “what next, new highs”? … 2 opposite SDEV moves in 36 minutes; very strange. From my perspective, though, no signals at the bottom of that phantom break to get me long; best signal all day still the one the LP “gamed” with the 5 point spread BS. The good news? On this melt down and then mini-melt back up the spread didn’t widen, so hopefully this episode won’t repeat again in the future.

It’s about 90 minutes to the close, and the full gamut of stock indices “games” on full display; remember what I said before a blog or two ago about what you learned in kindergarten to third grade? Stock indices are personal; big players keep score, and somebody is always getting squeezed to the hilt. So far today a melt down & a melt up, all in 36 minutes, and nobody has a clue what happened. Some very big bets are being laid as I write, and one side is gonna be very unhappy come Sunday night.

All in all, a week I don’t want to see come back for a very long time; shortened because of Easter Monday, French Fry elections looming, and WWIII in the background constantly reminding us of the “nut jobs” in the world that claim they have nuclear weapons. Really, a week to survive and get through until next week; we can’t control the weasel in North Korea, but getting this first round of elections over in France should clear the air on the financial scene. Next week sees higher volumes and trading [when the signals appear], and markets should return to somewhat of a normal pace once Sunday night is out of the way. Having said that, though, there always is the possibility of the “black swan” rearing its ugly head Sunday night if things unfold in a way absolutely nobody expects; for example a LePen win with more than 50%+ of the vote [not predictin’, just sayin’]. If something along those lines happen, all bets are off for a “normal” day or week; and that would precipitate a melt down in financial assets the “Plunge Protection Team” would have to stop when the selling abated and they then drove bids higher.

Here at the close, a wicked day [and week] just past; you want to talk about the “Flying Wedge of Death” making a cameo, well here it was on full display today; glad to leave the day and week up any amount of money cuz it doesn’t matter the amount. What this week should have proven to you, though, is the simplicity & power of the version 3.2 algorithm; if you doubt its power, simply scroll back on the M1 and have a look. Granted, not every bottom or top [far from it] is a signal, and our patience and discipline are tested on a daily basis; when there is “chop” in the market [especially on the daily when the market isn’t really trending anywhere], signals can and do evaporate and leave the best of us frustrated.

I’ve been trading stock indices since they were born; it’s the way it’s always been and most likely always will be. Some days and weeks you wonder if the circus is hiring; other days and weeks the money pours in like a tsunami and Newbies wonder where it’s been all my life. If the trading conditions are right [and today at crunch time they weren’t, but it appears that’s fixed], and markets aren’t held hostage to political and/or geo-political events, and volatility is “normal” [which is above average], there simply is no other market or groups of markets that are better to trade and give better algorithm signals via the candles than the stock indices. It’s onward & upward for next week!

PAMM/MAM spreadsheet directly below.

 

Time for the beach! … I’m outta here … until Monday.

Have a great weekend everybody!

-vegas

OUR ‘TURNKEY FOREX’  PAMM/MAM  IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

 

  

POLLING THE INSANE ASYLUM

“Wall Street’s newest spokesman for awesome!”

Once a showman, always a showman and it’s good to see “Baghdad Bob” shilling for Wall Street; of course, he’s with us “in spirit” only cuz he finds the commute to Broad & Wall from the UAE tiresome & problematic, what with traffic and all. When “Bob” spoke during the Iraq war, you really didn’t know whether to laugh or cry, to maybe check the coffee you were drinking to see if somebody had slipped something into it, cuz it was very hard to take anything this assclown had to say seriously; in the end, he became a parody of himself.

And now you know how Wall Street analysts, brokers, Pols, Apparatchiks that shill for Pols, FED Pie Holes, & “talking heads” get through the day; shamelessly shilling for companies, the FED, politicians, and corporate execs who should be in prison somewhere making license plates. Rinse & repeat, erect the same code of behavior for the next day, and hopefully your career or life will be over before the whole system collapses so you can enjoy the crumbs of spoils the system left for you.

And to this end, I note with amusement more “lamentations & cries of grief” from none other than Richie Breslow over at Bloomberg, who in an article posted on Zero Hedge [here’s the link if you need a good chuckle: http://www.zerohedge.com/news/2017-04-20/breslow-traders-have-been-getting-crucified-when-trying-express-long-term-views ], lays out the jaded view that, “hey, it’s getting really tough to make a buck or two out here … I got expenses … I mean, seriously, you people in D.C. & in the Eccles Building, stop with the flipping & flopping with all this shit and let me make some money”! And when you start to see stuff like this, you know the inmates in the Wall Street asylum have been polled, don’t like much having to think for a living, and would much prefer to feed off of something, anything, for a while so they can eat. Richie speaks for “the Street”, gets a check from Bloomberg, and takes what he hears among the inmates, runs it by “Baghdad Bob” … and voila!! … we got us some news”!

I’ve said it before and I will say it again; “in no other pit or market ever traded do you see on a daily basis what you see in stock indices. One day you can’t get an uptick to save your life if you’re long and when it’s over you’re convinced a new bear market is upon us; the very next day, with very little or no news, you can’t get a downtick to save your life if you’re short and you’re now convinced the bull is back! I think I’m having a nervous breakdown”!

And here we are a few hours before the open, and the news flow says stocks are higher cuz election fears in France eased overnight cuz of a “new” poll. “Wait … what? Seriously, I’m supposed to believe this? Why anybody with any money that could even think about buying stocks would be in France to begin with leaves me LMAO; it doesn’t matter who wins in France if you’ve got money, cuz whoever it is, they’re coming after you. It’s what socialists, communists, progressives, liberals, whatever you want to call them … it’s the ‘free shit crowd’ European version … they’ve convinced enough doofus French Fries that your money is really their money and not only do they deserve it but they’re entitled to it, so they’re gonna take it one way or another. Yea, buy French stocks … sure … maybe in 10 years you can sell them on the Sharia exchange opening soon”.

Enough with France; a place once bestowed with “enlightenment”, chivalry, and a glorious history, now reduced to third world country status by its own making; this is the rot of European socialism on full display.

Turning to today’s trade … as if on cue, we’ve been open in New York about an hour and a half, and outside the mish mash opening clusterfark of institutional buys & sells that punctuate every single day at the open, you can’t find more than 2 consecutive M1 candles that are down. Remember the bear market that started yesterday afternoon when we broke 20430 on the downside? “Yea well, neither does anybody else”!

And so it goes, shorts held over from yesterday [hello Richie Breslow & pals] begging for a break, wondering why the short trading Gods have left them on the battlefield to die; wondering, staring at the trading floor ceiling mumbling to themselves, can’t figure out why we can’t even get a frickin’ downtick in anything; and more than likely it will get worse before it gets better.

Signals? How am I supposed to get a buy signal when the longest M1 down streak stands at “2”, two hours into trading? Outside of 4 M1’s, this stuff hasn’t moved 8 ticks. Still, it’s early yet. “Hooray, the streak ends at 15:17 with 3 now … break out the balloons”.

Like I said, as if on cue … and the shorts are getting crushed off of a French poll; “yea, seriously” [“I wonder if it’s the same polling group that showed Cankles winning the U.S. election a day before she lost”?] … here in the early New York P.M., still no break in price whatsoever from the opening minutes, unless you want to tell me 2 M1’s for 8 index points is now a “break” and that’s somehow a buy signal … people don’t want to believe me when I tell them about stock indices, like somehow I’m full of bat guano or something, or got some spiked egg nog at the old folks home and can’t even remember my name … but, here it is in “living color” [“what a great comedy show from the ‘80’s right”?]; one day straight down, the next straight up. Just your basic 200 point drop followed immediately by a 200 point ramp up on a poll, some “blah blah yada yada” from Mnuchin on taxes, sprinkled with more bad economic news coming out along with Verizon slipping; “what’s not to like? Totally predictable no”?

Of course, what this all means is “zero” ... until Sunday night shows up and we get to see which socialist gets to take France over a cliff in the next few years, everything is pretty much meaningless; last 6 days, 250 index points down, 250 index points up, very few if any signals via the algorithm as people either panic buy or panic sell. Yesterday was the “bear market”; today is the “bull market”. Confused?

And here at 2 P.M. in New York, trading has taken on simply “stupid” conditions; we’ve rallied over 200 points straight up and the panic on the short side is getting serious. I don’t know where this ends, but without some kind of 30 – 50 point break over at least 15 – 20 minutes, there’s no way I’m getting sucked into this crap.

Once again today, we see highs for the day occur during the Chicago Noon hour [officially defined by me as 11:30 A.M. – 1:00 P.M. Chicago time]; as I said yesterday, there’s about a 90% probability that when you see this, there won’t be enough power to propel the market higher after 1 P.M. Chicago time into the close. The buying power got used up too early to have an affect on the close; the other 10% of the time is fireworks. It looks and feels like today’s high will hold, but who knows the way this stuff is acting lately. And again today also, it’s the political Pie Holes [Mnuchin with tax talk, French polls that favor the “establishment” (of course they do!), and Pols talking up health care again] that got the shorts scrambling for cover and taking losses. Since we got our first break of the day shortly before 2 P.M. New York time, signals have broken down due to the fact the market is now going sideways; whatever break there was, if in fact it was going to go another leg up into the close most likely would have started by now. That doesn’t mean it goes lower [although it most certainly could], it just means the most current signals have lost their statistical significance unless we get another leg down.

It’s 1 hour before the close, and I’m pulling the plug on today with no trades, simply because there weren’t any; frustrating beyond belief. Even after all these years of seeing stock indices action, it never ceases to amaze me how sometimes these indices markets can be so one sided one day, and completely 180 degrees opposite the next. If you think it was bad watching it on a computer screen, you have no idea what it was like in a trading pit; this was a day that would have seen more than a couple of fist fights, shoving matches, and general “F bomb” madness beyond belief. However, it is what it is, and days like this come with the territory. What with the French elections coming Sunday [results Sunday night], Friday position squaring, and general chaos on the Korean peninsula going into the weekend, tomorrow should be interesting to say the least. “Some days & weeks, this crap just makes you shake your head”.

PAMM/MAM spreadsheet directly below.

 

Time for the beach! … I’m outta here … until tomorrow.

Have a great day everybody!

-vegas

OUR ‘TURNKEY FOREX’  PAMM/MAM  IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

  

THE TRADING DUALITY PARADIGM OF STOCK INDICES

“Just follow the road to the end of the rainbow!”

Perhaps in no other trading pit anywhere in the world, Newbies would wander out at the end of the day from the SP500 futures pit completely bewildered and baffled … wondering in one second how to come to grips with the insanity of the place, and the next second wondering if there was room for them in this insane asylum where their wives/girlfriends/mistresses sent them everyday cuz they didn’t want them messing with a babysitter at home.

“I don’t know man … all F-ing day the market was offered … every time I bought it went immediately straight down, and couldn’t rally 2 ticks to save my life … Ok, so I get short … immediately throughout the known universe the call goes out via trumpets blaring, and within seconds Squid, Morgan, Merrill, and all of those other a-holes start bidding and never stop ‘till the close, where once again I take it in the donkey”. You seriously want to know how many times I heard something like this from stock indices trading?

“You begin … and the key word here is BEGIN … to learn successful stock indices trading when you first understand and accept that ‘life is trading – trading is life’; everything you learned from the jungles of Kindergarten to third grade is in play … always has been, always will be … you’ll never even get out of the starting blocks until you embrace this. After that comes an even harder paradigm to swallow; namely, stock indices go up approximately 80% of the time, and are flat to down 20% of the time, over long periods. What makes the ‘Yin” & ‘Yang’ so difficult is that the 20% happens so fast, so viciously, and hurts so badly if you are long, that it leaves emotional scars that many traders can’t overcome. And in the truest sense of a ‘cruel and unforgiving’ universe, your emotions and senses of where prices are headed will be exactly 100% out of tune with market reality at exactly the wrong time”.

And each time I would hear these kinds of lamentations from traders up in the clearing house locker room, I used to look at them and say [paraphrasing], “You want me to sprinkle fairy tale dust over the pit tomorrow and make it all better for you? How about I bring Mommy in and she can lecture those nasty institutions to play fair? Is that what you’re lookin’ for? Cuz it sounds to me like you’re a kid wandering around the suburbs of Chicago looking for Disney World; hey, it ain’t here! There’s a paradigm at play here, do you understand the macro play? I think not, and even if you did, what do you do with it? Do you know what the micro play is”? And on and on it would go until inevitably they would say something totally inane and stupid like, “well yea … easy for you cuz you got 800 gabillion dollars in your account and money doesn’t mean anything anymore … and … and me, I got rent in 3 days … blah blah yada yada”.

“Right, each trading day the Valkyrie look over the pit and spare me death cuz they know it doesn’t matter … sure … the universe has decided to ‘cut me some slack’ … you realize how stupid you just sounded”?

Fast forward to today … nothing has changed in the stock indices from the long ago distant futures pits … only thing that’s changed are some names, but the collective behavior of “the crowd” is exactly the same … if Zero Hedge had been around back-in-the-day, they would have had a newsletter telling people daily of the imminent crash of the stock market to damn near zero, along with 20 top reasons that are “sure fire” warnings of the impending implosion.

“YOU WANT TO KNOW THE FUTURE? STUDY THE PAST”!

I will admit, it’s hard to study the writings of the great masters of trading; none of them make it easy and they are often contradictory in some isolated cases. As far as I can tell, Sokyu Honma was the first real documented market “genius” that came; maybe there were others before him, but the written record prior to the 18^th century is extremely sketchy and incomplete for obvious reasons.

Although I didn’t know it at the time, cuz my main focus was from my mentor Bert and Gann, trading memes I picked up on in the early days of indices trading were written about and practiced by Honma; not completely, and of course we had different names for things, but some of Honma’s main premises’ for both macro & micro events I recognized immediately as things I had thought about as well.

And what it all boils down to are 5 “macro” themes; 1) bottoms, 2) tops, 3) gaps, 4) continuations, and 5) consolidations. And when you take these 5 Honma themes and project one of them onto anything Gann is saying or writing about, and you suddenly got a whole big picture that is much clearer than before; especially regarding stocks, and by default stock indices.

The “micro” events are “the code” from the candlesticks; Bulkowski identified, compiled, and analyzed 103 different candlestick formations [individual & combinations] over 10 years using data from over 4 million candlesticks. I took his work, went back to my mathematical algorithm code for stock indices, and realized almost immediately that I was missing some valuable formations from those I already was using; what you see in the manual is the result of that analysis.

The upshot for me as a trader is that “the code” of the candlestick formations [individual or in combination] is as fast as any HFT, and doesn’t leave me at a distinct disadvantage waiting for confirmation of a signal because of the time limitations of the MT4 platform; that time lost is costing me money. While my “code” is good, I can’t run it on a tick chart; I’m limited to the M1, and in this day of super fast “speed of light” trading, the only way I get valid signals that have significant statistical probability of profit in real time without delay is via the candlesticks and what they tell us.

Turning to today’s trading … IBM disappoints with earnings overnight for like the 20^th quarter in a row … initial move down in the Dow30 late yesterday, but market recovered last night into this morning … “did you really think Big Blue was going to tank”? Before the open Morgan Stanley beats earnings estimates, giving the banking group some hope after yesterday’s Vampire Squid drubbing.

An hour into today, and we got … crickets… I’m wondering if the world is holding its collective breath on Korea, another GBP stop hunt debacle yesterday which further clouds the FX arena, another manipulation “gold hit” out of nowhere [2 in 2 days], and the French elections this Sunday which look at the moment like a 4 team clusterfark as the elites got their panties bunched up around their collective throats. In all of this, where is the appetite for trading anything? Maybe it’s the Fed Pie Hole speaking at 12:30 or even the Beige Book later at 3, I dunno, but if that doesn’t get the ball rolling what does tomorrow and Friday look like? [Hint: sleepy time tea”.]

Noon time in New York, and trading has taken on that “it’s midnight in the graveyard” feel to it; totally zero going on. That may change here when the Fed Pie Hole speaks at 12:30 & when the Beige Book comes out.. we’ll see. Signals don’t mean anything when it gets like this.

Ok, we finally get a decent break down to a “third” low from the open, and then a retest of that low that goes marginally lower … from there we see a “three white [only I use green] soldiers” formation off of the low, which is one of the highest statistical profitable formations off of a low you can get … problem is it doesn’t go anywhere. First trade of the day directly below; blue box with boxed white arrow is the “three white soldiers”.

 

As you can see, I eventually get in minutes later, but almost immediately I don’t like what I see, which is a market that slows down and has no “trade flow” to it, and more than likely is awaiting the Fed Pie Hole. At this point I just want out … give me any profit and I’m gone. I should have taken the “three white soldiers” when it happened … instead I get “cute” waiting for a slight pullback that doesn’t come and I have to pay up. Still, if this stuff was “good” that “three white soldiers” formation, with gaps higher I might add, should see the market at least 20 – 30 higher, not sitting here up 5 points after 30 minutes.

And my caution bears fruit … minutes later the slam. Looking at the daily candlestick, I don’t really want to be picking a bottom here in the 20420 – 20440 Dow30 area; below here are no doubt some serious sell stops. While most likely we bounce from this level into the close, what that bounce is isn’t going to be very great, and my risk/reward ratio getting long in here completely sucks given the looks of the daily chart; let the signals be what they are, they don’t know what I know, and what I know is that if this stuff starts rolling lower into the close in the last hour, there’s going to be hell to pay with the sell stops. If that’s what the big boys got planned, catching that falling “knife” from that plane above is gonna cost you some fingers; “thanks, I like my fingers”!

On the other hand, we just hit a new low for the day in the Chicago Noon hour, and we all know what that means; it means about 90% of the time no new lows after 1 PM Chicago time. Now, the other 10%, when they come, usually are in situations like this, where you’re staring at important support/resistance levels either on the daily or weekly candles, and when those happen it’s usually fireworks. Not predictin’, just sayin’.

Here at 17:15 server time [Turnkey], a nice bullish engulfing pattern off of the low of the day; I’m not taking it because of the risk/reward I talked about above; I buy it here at 20446 with a stop below at 20430 and I run the risk of getting filled 30+ points below that stop at the bottom around 20398; no thanks, there will be other opportunities.

And here we are 25 minutes later, and the market is barely a handful of index points above that bullish engulfing pattern; granted, you could have made a few ticks no doubt. That’s not the question, though; the question is what was your risk to get that few ticks? 100 out of 100 times, I would avoid this trade, because 1 – 10 of those times sees your sell stop filled a mighty long ways away from where you thought. It’s simply not worth that few ticks of gain.

Ninety minutes to the close [30 minutes to the Fed’s Beige Book], and I’ll give the bulls credit, they’ve tried on numerous occasions over the last couple of hours to rally off the lows with bullish candlestick formations … except for the bullish engulfing pattern mentioned above, all of them have gone nowhere, the last “three white soldiers” a few minutes ago off the fresh new low that took out said bullish engulfing pattern is going nowhere. Out on the horizon, plenty of risk both technical and geo-political, and that is mainly [I think] keeping buyers away right now. We’ll see what the Beige book does, if anything.

Nothing to the Beige Book we didn’t already know … crickets. Another bullish engulfing pattern on a new low sub 20400 … 9 minutes later it’s barely up a tick if that… some days gotta go down no matter what … my key for trading the indices is the New York open; price stays above that you can hold for higher highs and buy every correction signal you get; price goes lower than that, every signal is a scalp. Today, you see why this is important and has to be followed. There isn’t any over riding “sell the market” on news today; granted IBM stunk up the joint last night, but nothing other than that, and they been doin’ that for at least 5 years every quarter. Now, all of a sudden IBM matters? No, just a down day that not many people except die hard shorts made money trading from the short side, although I’m a little surprised the sell stops going down weren’t more violent & vicious in scope; and if it’s any consolation, there weren’t any sell signals but one, at 15:44 off of a correction up that saw the Dow30 within about 35 points of a new high; other than that, nada [Isn’t hindsight wonderful?].

All in all a tough day to make money from the long side; outside of Monday’s “kinda of a trading day Holiday” up, the Dow30 has retreated about 350 index points in 7 market days, and today looks like the close will be the lowest in about 2 months. Still, up money is better than down money, and I’ll leave it at that. Tomorrow sees unemployment claims, Philly Fed index, and another Fed Pie Hole speaking, all before the market opens at 9:30. Tomorrow’s another opportunity.

 

PAMM/MAM spreadsheet directly below.

Time for the beach, the dog demands it! … I’m outta here … until tomorrow.

Have a great day everybody!

-vegas

OUR ‘TURNKEY FOREX’  PAMM/MAM  IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!