“Learn to accept what you
cannot control.”
Let
me simply add to the world’s greatest list of understatements; “that was some storm … huh”? First off,
I’d like to thank all of you who emailed me from Tuesday, September 5th,
and over the subsequent week, with well wishes and support; thank you everyone,
it means more to me than you will ever know!!
Wow
… I mean, pretty much a whole week being “Castaway-ed” [thank you Tome Hanks
for a brilliant performance]; no TV, no internet, no phone, most had no
electricity, which meant no air conditioning in the sweltering heat of the
Caribbean summer with not a hint of wind on the backside of the hurricane.
Sure, the hurricane itself is something to behold, but the real horror starts
the next day if you’re not prepared in advance. Cuz, simply surviving now
becomes the issue with fresh water, food, medical care if you need it, and a
safe place to stay ‘till things get sorted out. “Forget the modern luxuries of TV & internet; nothing means more
than “ICE” & AIR CONDITIONING” when SHTF and you don’t have either”!
“Prepping” as they call it, is made fun of in
certain circles … I’m pretty sure the cultural elites get a “giggle” at the
suggestion of emergency supplies and “preparedness” inside the DC cocktail
circuit, being permanently enjoined at the hip of the big government “nanny
state”, whose power knows no bounds and can cure every ill … except when it
can’t. Would you know what to do for 5 – 7 days [at a minimum] with literally
nothing? It doesn’t matter where you live, cuz you’re not immune!! How do you
generate power for electricity? How do you keep food from perishing and where
is your supply of clean water? You can go a very long time without food, but
you absolutely need water within a day or two, or you dehydrate and die. How do
you get air conditioning when it’s 105⁰ in the shade, or heat when it’s -10⁰
below zero as the high for the day? Can you survive hypothermia or heat
exhaustion before help arrives? “I just
lived through a week of pure hell, and if not prepared, I don’t want to think
of the consequences”. Sure, things are back to “semi-normal”; water and
power has been restored, communications at every level are back, and supplies
are returning to the stores … gradually, but give ‘em another week and it’ll be
back to normal. And this is all great and good, but if you weren’t prepared,
how did you stay alive for 2 weeks? So, my message to all of you is simple: “I don’t care where you live; 1) you absolutely
need an emergency generator for power … the type and kind with various options
is up to you; most cost between $200 - $400 and will run on about 2-3 gallons
of gas per day … get one, CUZ WHEN YOU ABSOLUTELY NEED ONE, THERE WON’T BE ONE
FOR SALE AT ANY PRICE ANYWHERE NEAR YOU! 2) store clean bottled water if you
can’t have your own cistern … you need about 2-3 gallons per day per person in
your family for about 2 weeks at a minimum … do the math, and protect your
family! 3) lay in a good supply of emergency food that can last at least 2
weeks. Finally, 4) go to any camping store [Pro Bass Shops, etc.] and get yourself
a “sterno can- fueled grill” to cook. They’re relatively cheap, and the food
tastes great and the sterno cans will last forever”.
I’m
not the same person I was a month ago … the storm changed me in subtle ways.
It’s not often you get to see how people react under very stressful and in some
cases life threatening situations; I can’t say enough good things about the
police and emergency first responders, including medical professionals, that
were there at “clutch time” helping those stranded by the hurricane … on the
other hand, it breaks my heart to see people selling bags of ice for $20 to
those in need. Don’t get me wrong, I’m very much the “capitalist”; but there is
a “time & place” for everything, and this is neither. I simply don’t know
how you look into the mirror and rationalize this in the context of human
suffering and then put a price tag on it for profit… what the hell is wrong
with you?
And
it’s not as if this is the only “hurricane”, metaphorical or not, that’s
hitting the world! … “can the world just
step back a little and take a deep breath before committing suicide”? Nowhere
is this more profound than in the financial markets, specifically USDJPY &
gold, where the 1) stop hunts, 2) outright manipulation, and 3) geo-political
shenanigans have spiked intraday volatility exponentially. And through it all,
it appears to me to be a very “arranged” affair; “cuz, if you ask me, Kim, Xi, & Vlad are making literal fools of
the U.S. and the west in general. Has it occurred to anybody in the MSM financial
press to start asking questions as to who it is that is profiting off every
missile launch via Kim and who are the banks on the inside doing the trades and
“piggybacking” for themselves as well?” Oh … wait, I forgot; we’re not
supposed to ask questions like this cuz it’s “cynical” and demeans faith in
government and its “fearless leaders”. WTF.
During
my weeks’ worth of hurricane financial blackout, I posited a premise I worked
on in quiet moments of the following; “what
if it’s NOT correlation between financial markets that matters, but
ANTI-CORRELATION? I don’t mean, in the sense of being “inverse” correlated, I
mean other markets not having any significance at all on trading action up or
down … in other words, is there a financial market that exhibits such
characteristics of “traditional trading” [before the era of central bank
trading control] that falls outside of the “risk on – risk off” paradigm we
find ourselves trapped in by central banks? And if such a market or markets
exist, do they have 1) enough intraday volatility, 2) enough liquidity and
volume, and 3) enough world-wide interest to make it matter?”
I
literally went through the entire MT4 platform, market by market, and applied
the above three criteria; what I found surprised me a little. First, though,
some thoughts on the various other markets; 1) right now, and most likely for
the foreseeable future, the major world stock indices are a joke. Manipulated
beyond belief by various “Plunge Protection Teams” until they aren’t, overnight
mystery upside vapors, and “zero” trading action in New York all make for very
lousy trading conditions … you simply can’t trade them and expect them to move
enough to compensate you with reward for the risk that you take in any
position. 2) That leaves oil, interest rates, precious metals, and FX. They
don’t call crude oil the “widow maker” for nothing; interest rates are more
manipulated than stock indices; precious metals are “sell side” manipulated by
the FED & BIS through JPM & HSBC, your risk is ALWAYS greater than any
profitable reward via a position by a factor you can’t begin to tell me. Ok,
that leaves FX, and there is only one pair that meets the criteria.
Before
I mention which FX pair, let’s not kid ourselves; ALL MARKETS ARE MANIPULATED
TO SOME EXTENT BY THE CENTRAL BANKS. There isn’t a single market anywhere they
don’t have their fingers in to some extent … over the past 20 years, the BOJ
has led the way. The question is, which has the least? And that would be
GBPUSD. Take away Brexit, and you’re looking at a market that has almost zero
correlation with gold, Yen, and stock indices that matter [SP500, Dow30, DAX30,
& even FTSE100]. In a financial world that is “hyper-ventilating” over
geo-politics and every 10 cent move in gold and wondering if the latest 30
second $1 up move in gold means WWIII in 5 minutes, GBPUSD doesn’t give a crap
… it sings its own tune, and is subject to its own internalized manipulations
from Bank of England [BOE] Apparatchiks and political hacks, to the trading
desks of “master manipulators” Barclays, & Deutsche Bank, which have
assured us after paying hundreds of millions in fines for “rigged pricing in
GBPUSD”, that they won’t do it anymore … promise … Scouts honor!
Too
be sure, lately GBPUSD has had its “moments” … forget Brexit, I’m talking about
BOE forecasts for higher interest rates “sooner rather than later”, and
inflation picking up at the same time; it’s all a volatile mix, and “Cable” has
reacted with bigger ranges and a more volatile trade. The key point, though, is
a more volatile trade in the “traditional trading” sense rather than some
knee-jerk reaction to a correlated market going bonkers [a/k/a gold versus
USDJPY]. So, the $64,000 question is, which is better; Cable or Yen? One is
highly correlated to “risk on – risk off”, the other isn’t; they both have
roughly the same “net cost” to trade, with Cable very fractionally higher, and
slippage is about even for both.
And
while I would love to be trading simply the stock indices, it is almost
impossible to trade them, thank you very much FED … all you can do is
“position” them, and that carries its own set of risk parameters I don’t want
to touch cuz it’s toxic as nuclear waste and you don’t want to go there. The
U.S. indices lurch at the “speed of light” and then it’s “crickets”; the DAX30
is a “Flying Wedge of Death” invitation to disaster, with the big money that
used to run stops in the SP500, now trading the German blue-chip market and
running stops that commuter trains set their clocks to in Berlin. Gold, for its
part, as illiquid a market as you can find … and I can assure you, no stop [buy
or sell] is safe from being filled $5 - $20 per OZ. away from your stop price.
It’s not a question of “if”, only “when” it’s your turn to get hit. And while
USDJPY and the SP500 & Dow30 correlate over the medium term, blatant FED
manipulations make short term correlations “iffy” at best. As I said before the
hurricane hit in a previous blog post; “we
are all gold traders now”!
The
manipulators leave us with few decent choices to trade; one I haven’t mentioned
here today is EURJPY. On paper, everything here looks good, but the slippage on
fills and stops is horrendous … much worse on average than either GBPUSD or
USDJPY, and on an hourly basis more “mystery ticks” than grains of sand on a
beach. It’s primarily the reason I have backed away from this market … that
bid/offer you see is pure “phantom fantasy”. Which brings us back around to
either the correlated “risk on – risk off” market of USDJPY or the “sing your
own tune” GBPUSD; which is consistently better? Given the choice between 2
hurricanes, when I’m in the middle of one or the other, how am I supposed to
determine which one is “kinder”? Going forward from here, I’ve decided to put
GBPUSD & GBPJPY back into the mix of tradeable markets and delete EURJPY;
if USDJPY, GBPUSD, and GBPJPY aren’t moving, then there isn’t anything moving
anywhere else either.
Turning
to today’s markets … it’s late Sunday afternoon, and I’m wondering before the
week starts here in a few hours if the “jig is up” for gold, and this week sees
sub 1300, especially after the FED meeting decision on Wednesday; that means
nothing for GBPUSD, but for USDJPY it should spell 112.000 – 113.000. The
question is, how fast does it “Thelma & Louise”, and what happens under
1300? Cuz my message to Kim is simply this: “you’re
losing credibility … either hit something with your toy missiles or STFU and go
away into the sunset … every missile you fire now means less than the one
before, and markets have turned a deaf ear to your bullshit rantings. Fish or
cut bait. In the unlikely event you do “stupid shit” and do hit something, I
hope you like ruling over a glass parking lot and life underground in a very
deep bunker suites you”. It very much appears to me that 1340 – 1350 is the
manipulators “line in the sand” for gold, and unless people start dying en
masse via missile strikes, gold has had it for now … cue the music of Bocelli
& Sarah Brightman singing “Time to Say Goodbye” as gold gets monkey
hammered yet again by the “Rally Protection Team” at the FED, and the TBTF
banks led by JPM clean up from the price plunge … or, I’m full of bat guano;
who knows? We’ll see.
Holiday
[again] in Japan, so overnight flows have a good chance to be very muted and
slow. Once again, though, here in the early A.M. hours of Monday, the upside
“vapors” are at it again in the SP500 & Dow30; what are these Twits at the
FED afraid of, they can’t let the U.S. indices retrace even a very small
amount? With every indicator on earth pointing to deteriorating economic
conditions both here and abroad [read China], the fact that the SP500 sits over
2500 as I write truly astounds me … either investors have become that stupid
that they actually believe the FED, or they believe Repubs in congress can
actually get tax reform, healthcare, & immigration done … good luck with
the premise regarding both.
Another
day of what has become all too frequent … either greased lightening with price
action so violent 10 PIP moves come in seconds, or paint drying on a wall where
you’re lucky to get out of the USDJPY 0.002 spread within 5 minutes. Europe has
punted the entire day to New York, where we most likely will sit and do
absolutely nothing but wait [yet again] for the clueless faculty lounge Twits
at the FED to bless us with wisdom on Wednesday … seriously, is the traveling
circus hiring?
This
just hitting the wires; BOE Carney says no quick interest rate increases …
doesn’t want the market to think things will be proceeding too fast; things
will go “slow”. Well, X-Mas in September for the TBTF LP banks, since most
likely they are crying mightily over last week’s 4 handle rise in GBPUSD and
are short … nothing like some “help” from a central banker who will retire
someday to Squid or some other devil’s den at a 6 digit salary, who now throws
a lifeline to GBPUSD shorts [banks], in the fervent hope that someday they will
remember what he did today. Do we get this privileged service as a retail spec?
To ask the question is to answer it … frickin’ scumbags top to bottom.
Mid-afternoon,
and the trading action is simply pathetic; “paint-the-tape” gold trades
dominate FX flows in USDJPY & GBPPJPY. The last 8 hours of trading has seen
about a 15 – 20 PIP effective range in USDJPY; tomorrow looks worse, cuz of
course everybody is waiting for Wednesday’s FED Pie Hole Twits with their
‘balance sheet” restructuring plans. You know the drill, it’s “hurry up &
wait” time.
Ok,
another major hurricane headed my way; Hurricane Maria [CAT 4?] expected to
“bullseye” us tomorrow sometime. I don’t know if the Caribbean can take another
major hurricane within 2 weeks; the “high season” is already completely “shot
out of the water” for a lot of islands, and this one set to rub salt into the
wound. Like before, I have no idea when I can post next … I’ll trade the PAMM
when I can … we got plenty of water, food, etc., so it’s “hunker down” time
once again … not expecting to have to rescue anybody this time around, simply
cuz nobody has travelled down here since Irma hit and the place is pretty empty.
I don’t like this one damned bit, but we will be OK. This too shall pass. The
PAMM spreadsheet will be back when I post again, after this latest hurricane
passes. Onward & Upward!
Have
a great day everybody!
-vegas
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