HURRICANES EVERYWHERE!

“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 5^th, 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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