FREDO GOES FISHING

“Which Irish leader do I see in the boat?”

“Let’s just ignore the Irish border question … I mean, whadda they gonna do?” World, we have a DEAL! [wait … what?] And so, without further ado, Arlene Foster [Northern Ireland DUP leader] gets cast as “Fredo Corleone”, and if I were her, I wouldn’t get in any fishing boats just yet. More than highly probable she has told both May & Junker to ignore the “blah blah yada yada” coming from her lips in the ensuing days, cuz she’s got a base to feed the DUP red meat to, and it can’t look like she’s caved. But, rest assured, the money in the briefcase has been delivered, and she knows she’ll be there with them at the finish line. And if not, well, “that’s a really nice house and family you got there in Northern Ireland … would be a shame if anything happened … you know … “accidently” … just sayin’ is all”. That message, I’m sure, has been delivered right along with the cash. Of course, all this does with the stunning announcement is to get the “buy the news” algos to shove GBP higher in a nanosecond, that gets quickly faded into new lows before the NFP report. “Gee, who could have seen this coming”?

Somewhat a surprise this morning, the way everything unfolded; I didn’t really think everything would happen post U.K. data and pre NFP report. I thought the “fireworks” would occur after a strong jobs report … what do I know?

That early move lower in EURGBP below 0.87000 to the lows, and then subsequent jump back over 0.87000 to the 0.87100 area got my attention … the speed at which it happened looked and felt like a low had been put in, but we are still pre the Friday U.K. data dump at 4:30 EST … still plenty of time for undoing what was a total short covering operation; I doubt seriously it was fresh buying. The U.K. data came in about where expected, so no market reaction in EURGBP.

So here we are hanging around the 0.87150 – 0.87200 area, Cable is attempting to rally slightly, and the cross isn’t going down while the Euro sleeps … and that sets the stage for a long position cuz if they can’t break the cross when Cable rallies, well it looks to go higher, and the fact that we’ve been hanging up here for a while now, so I’m to understand everybody is getting the chance to sell the early rally at the high? [Yea right]

I get long and while Cable starts making a new low, EURUSD starts as well, and that has me very nervous being long … the market is above the 50% retracement level of the range for the day, but when we get the spike up [not that large but large enough I can’t ignore it] I have to liquidate … it’s the telltale signal … and for 2 – 3 minutes I look like I did the right thing, and then … after “sleeping” all day, EURUSD rallies while Cable goes lower and the cross takes off … could have stepped back in long, but buying 10 – 15 PIP rallies is not the way to riches, especially with the clock towards NFP ticking down. And, as I have said before, when you trade FX, and especially crosses, you got no time to think about the “what ifs” at crunch time … if it moves after you get out, so what? Is this the last day of trading for the world? No, it isn’t, so don’t worry about it and move on.

Quite frankly, NFP was a little disappointing considering the ADP numbers earlier in the week … I had the “whisper number” above 250K jobs, and with no growth in wages, I’m a little surprised we didn’t see the cross go down into the 30’s or high 20’s on a Cable spike up … instead it farts around the 60’s to low 70’s for two solid hours … and as if somebody range a bell for a race to start, it suddenly leaps as Cable gets “monkey hammered” down into the high 1.33800’s, and takes us quickly up on spikes to just below 0.88000 before just as quickly fading … again, EURUSD not doing anything, and the lack of volatility has me concerned here, cuz any “pop up” on soon to be weekend short covering will see the cross climb even higher, so I don’t want to sell in front of 0.88000.

Well, I guess third time is the charm, cuz after some sloppy profit taking, we again see the “rocket ride” on spikes to above 0.88000. “I mean, seriously, how high is this stuff gonna go? Cuz with no real Euro rally, any kind of short covering “dry Christmas tree spark” in EURUSD while Cable is getting mugged, could send the cross up to 0.8830 – 0.88500 area, and if that happens you got a full-fledged reversal panic on your hands on an NFP Friday with nowhere to hide the children, as Mommy & Daddy lose money faster than a wildfire could burn it”.

Sure, in retrospect, I should have captured that first “blow off” out of the box after a 2-hour consolidation that saw EURGBP do zip … as I said before, “anytime a cross hangs for minute-after-minute very close to the high or low for the day, the probability the market is giving “everybody a chance” to buy the low or sell the high is very low … that’s not how markets operate … highs and lows [the vast majority of the time] come on “spikes”, not consolidations … there’s a reason it’s a high or a low, and that reason is, it’s not gonna be there very long for you to capture it”. And, quite frankly, I got caught sitting here over thinking this NFP Friday, simply cuz it’s an NFP Friday … I hate NFP Friday’s; always have and always will, simply cuz it’s volatility in a bottle that gets “popped out” for no reason, other than the HFT algos see a chance to screw with stops [usually on both sides] … I didn’t see that last “monkey-hammering” in Cable to its lows for the day, while EURUSD rallied 15 PIPS, adding fuel to the fire, and literally BOOM!, it’s off to the races.

Truth be revealed, making a penny on an NFP Friday is usually a miracle in and of itself … couple that with the “buy the rumor, sell the fact” scenario I said I saw coming in yesterday’s post, and I thought Cable had nothing left going into the European close … after all, at that point, the market has put in an almost 85 PIP range, which is large for EURGBP under any circumstances.

Going forward into next week, the 800 pound gorilla is Wednesday’s FED meeting on interest rates, where it is widely expected that Grandma Yellen will raise rates a ¼ point in the fed funds rate; that puts the focus back on interest rate differentials, where neither the E.U. nor the U.K. got anything going for themselves … I think it’s gonna be a tough week to hold rallies in Cable, but that doesn’t mean it gets “Thelma & Louise-d” either. EURUSD is oversold at the moment, so it wouldn’t surprise me to see it try and rally … if that happens, I don’t think it can go very far. That puts the cross in somewhat of a range for at least the first 3 days of the week … after that, we simply need to see how it reacts to the FED. Notice today, there weren’t any wild GBPUSD “mystery” spikes of 30 – 50+ PIPS, either up or down … very orderly in its chaos, and that’s due to the fact  “the news on Brexit is out” … “put a fork in it, it’s done already”! Hopefully, this means George Costanza got sent packing, and his “bizarro” world went with him.

Now that Europe is closed, I don’t see anything in New York to get EURGBP ± 7 PIPS or so from where it was at 16:00. Maybe a little short covering from some brave souls, but even then it won’t amount to much … same with trying to take it lower; why? Who’s gonna step in front of the weekend, and for what reason(s)? I for one, don’t see any rationale.

This has been a very, very, tough trading week in EURGBP; with no warning, we started with “bizarro world” trading conditions, that culminated in Wednesday & Thursday’s literally “insane” trading conditions [that I side-stepped], thank you very much GBPUSD our denominator. Now, here at the end of the week on Friday … “Yippee, my favorite trading day of all-time [not]”! … and the market gets to deal with “Brexit” divorce finals and the Bureau of Unicorn & Fairy Tale’s NFP made-up bullshit. “Give me $0.98 on Sunday night to skip, and it’s a coin flip to wrestle wild, ravenous West Highland White Terriers [Westies] or trade; even though I think I can take him, I chose to trade”!

However, without George Costanza plaguing Cable [or for that matter EURUSD sometime in the future], I very much like the trading action of EURGBP … yes, it’s a “tad” slower than the old Swissy, but once the day starts in earnest with the European open, it’s pretty easy to see which pair is the dominant driver of the pair for the day; now, that can change, but it’s something you can see and take note of and use it to your advantage. Most of the time, that will be Cable, but there are times EURUSD hops in the driver’s seat, and you have to beware of it. Technically, it also sets up better via the “Scalper’s Algorithm”; which brings me to announce, I’ll have a new “Scalper’s Algorithm” ready for release next weekend STRICTLY FOR EURGBP & EURUSD ONLY. Originally, I was going to simply make them “new” chapters, but after thinking about it, I decided to give them both their own manual … I think that’s the best solution.

As long as EURGBP can stay away from George Costanza [about 95%+ of the time I think], I feel very confident in saying, “this is home” for the algorithm; everything I want is here … and while I didn’t make as much money today as I should have, thank you NFP Friday, there are infinite days ahead of us in this pair, and these “once a day per month” traps are merely to be survived, and hopefully money can be made. These days are what they are, and I can’t change that … wish I could, cuz to me it’s always been a wasted day. Onward & Upward!!

PAMM spreadsheet directly below, and I’m outta here …

“Now, do you want to mess with this bully? OK, here’s your bacon”! 

Have a great weekend everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM 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”!