“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
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