BEHOLD! … THE “VAMPIRE SQUID” ALUM CAT FIGHT

 

“So says Mnuchin to Super Mario!”

“You suck! … Yea, well, you double suck! … Pfft, you triple suck! …” Girls please, can’t you ex-Vampire Squid Alums just get along? Well apparently, after today’s ECB presser where Super Mario blamed Sec. of the U.S. Treasury Mnuchin, for committing the unpardonable sin of talking about the dollar in Davos, the gloves are now off in the FX wars …cuz Super Mario wants the world to know the rise in the euro isn’t his fault … got it? … it’s Mnuchin’s fault, and he’s a big, fat Trump “stooge” … “You suck! … Yea, well, you double suck! … Pfft, you triple suck! …”

“Well, that escalated quickly, didn’t it”? In what can only be described as a George Costanza, “bizarro world” presser, Super Mario ended up doing the exact opposite of his intentions; “nice job Super Mario, I guess that’s why you get the big bucks … not only did you not bring EURUSD down, you made the problem worse by attacking Mnuchin and looking like an idiot … after this performance, you may want to cancel pressers in the future”.

The good news from all of this? Well, I don’t think you have to worry about a lack of volatility for 2018 in FX … all four majors, EURUSD, USDJPY, GBPUSD, & USDCAD, looks set to swing wildly in the days, weeks, and months directly ahead. And while every central bank is in a “race to zero” for their national currency, cuz everybody knows a lower currency helps exports. [Note: maybe these “experts” should consult Venezuela on that question.] That doesn’t mean every single day will be “rock & roll”, but I’m pretty sure there will be a generally higher level of intraday volatility in EURUSD & GBPUSD in 2018, than what everyone got used to in 2017. “Release the Kraken”!

I will say this again, cuz it bears repeating, especially for Newbies to trading and/or those getting consistently “whacked” by the EURUSD and/or any of the other FX pairs in “The Magnificent Seven”; “in this present day bull market, you can’t buy rallies if you want consistent profits … you have to wait for breaks and then buy what I call “the teacup handle turn” … what is the “teacup handle turn”? … it’s a very short term retest of a low after a break, and the retest fails, and goes out the top of the last few minutes … in a genuine bull market, this will have an extremely high success rate for profit … in a genuine bear market, it’s just the opposite, where the “teacup handle turn” comes off a rally high and results in a short position … again, a very high success rate”.

In this bull market that we are currently seeing in EURUSD & GBPUSD, it is more important than ever for you to show patience & discipline in your trades; in neutral markets, being sloppy and doing “stupid shit”, you can get away with a lot of market sins of trading and still make out OK … in a full fledged bull or bear market, that is definitely NOT the case. You buy a rally, and whether you realize it or not, your reward/risk ratio plunged deeper than the Grand Canyon, and as a result, you subject yourself to some nasty losses when they reverse suddenly.

As a general rule, in FX bull markets, declines in price tend to be much sharper and faster than what you typically see in a bear market. That’s because the “profit taking” [thank you CNBC’s Bob Pisani] hits the market from longs at usually the same time, with some help from the scumbag LP’s, and price craters … the desired affect among typical FX retail specs is to now think, “Ah ha! Look at that break! No way the market recovers from that massacre … by golly, we’ve started a new bear market”! Ummm, no; and what you should be buying you end up selling and regret it, usually sooner rather than later.

And remember what I have been saying these last couple of weeks, which is, “the scumbag LP’s will find a way to break price down in EURUSD, to click off sell stops, and convince a few that the move is over … whatever thievery they have in mind, most likely has the highest probability of happening in late New York to the start of the Asian session” … that would be 4:30 P.M. to 5:00P.M. EST to about 6:30 P.M. to 7 P.M. EST … this is an approximate 2 hour window of mischief, if there ever was one, where volume & liquidity are “thin” to say the least, and scumbag LP banks looking to shove the market into stops will have an easier time here than anyplace else during the trading day.

Essentially, what we learned today is more valuable than any single trade; what we learned is that EURUSD has the proverbial “green light” to go anywhere and do anything it wants via the market; it can go to 1.30 or higher, and it can go back down sub 1.20 … we learned the ECB has no stomach for a EURUSD fight with the market, simply cuz they know it can’t be won, and besides, they don’t have the money to do it. That means, intraday volatility has a free reign without the “800 lb. gorilla” in the room [the ECB] restricting things; the market is free to go wherever the hell it wants … this is clearly much different than in 2017, where every 200 – 300 PIP rise off the bottom had market participants fearful of the ECB not approving the move, and wondering what they were gonna do about it. Well guess what? They ain’t doing Mr. Jack Squat, cuz if there ever was an ECB meeting to get up and pound your fist and tell the market to “stop it”, this was it … and what did we get? … crickets! This is the most valuable thing you can learn from today; translate it into profit going forward!

Turning to today’s trading action … as we all know by now, the checks have cleared in Asia for the Chuckleheads, since they ramped it higher last night; then of course, like the sun rising in the east, they puked it down 50 PIPS as Europe opened, where we stayed within a very tight range to Super Mario’s presser.

The second Super Mario started speaking, EURUSD took off on a “to the moon Alice”, never looking back to the tune of approximately 135 PIPS to the upside … “Ok, today’s range has been obliterated outward; only thing to do is look for long scalps off breaks, where the “setup” is optimum, and that is what I described earlier as the “teacup handle turn”. Anything else, and your risking a lot more than you think.

Too be sure, EURUSD [and for that matter Cable as well] isn’t going to continue opening higher and going higher … the real estate above 1.25 – 1.26 is going to be tougher to overcome, and the market will succumb to long liquidation … if past history is any guide, that usually means a cumulative pullback in the 150 – 200 PIP range, ± a few PIPS in the coming days … that doesn’t mean it’s coming easy, on gently sloping and orderly down moves … quite the contrary, it will come via large spikes down lasting 1 – 5 M1’s, and then turning around with a vengeance. Both EURUSD & Cable are very much “overbought”, but that doesn’t mean they can’t get more overbought, or even going to “overbought-er-er” … that’s why I said, you can’t get sloppy in here in this market, cuz if you do, it isn’t a question of “if” you get whacked, it’s only a question of “when”.

Today’s market action prior to Super Mario, and then as he was speaking, left little in the way of good “setup” trades; after the high @ 1.25378 was put in on total panic buying, the subsequent break down to the 1.24600 – 1.246700 area gave us the “teacup handle turn” … my trade today wasn’t at the low off the high, it was on the short term double bottom “teacup handle turn” that got me long … the trade was immediately up, and as it was going to 1.24840, my thoughts were any break from here that sees a price below 1.24820 will see me liquidate … with the way the market is trading with 10+ PIP M1’s, I’m not gonna fool around with this stuff … go higher and I got some room to work; back off, and I liquidate, it’s as simple as that.

More than 4+ hours after my trade, EURUSD is right around where I traded it earlier, and while I could have held on for more, it simply doesn’t matter … we still, in the last 10 trading days, have not really seen any kind of good break “early”, while the range for the day is relatively small, to setup a long trade that can be held on a rally off the break … zero, zip, nada, & zilch in that regard. That will undoubtedly change going forward … it’s been many years since we’ve seen this kind of bullish trading activity in EURUSD, and it’s got a long way to go in my opinion; however, it’s not going to go there straight, and while the “low hanging fruit” has been picked, opportunity here is unlimited, especially buying on breaks. PAMM today up 0.1%, and while I’m somewhat disappointed in the number of good setups to get long, I know when the breaks come, we’ll powerhouse our way up in a big way. Anyway, it is what it is, and I take the setups one day at a time, one trade at a time. Hopefully, tomorrow sees some weekend long liquidation in late Asia running into the European open to shake out some longs; that should give us some great trades … we’ll see of course, and go with whatever flow the market throws at us … Onward & Upward!!

PAMM spreadsheet directly below.

UPDATE 2:20 P.M. EST: President Trump says Mnuchin’s comments on the U.S. Dollar, “taken out of context, and wants to see a higher U.S. Dollar”! … “well, that escalated quickly on the downside didn’t it? … Oy vey”! Looks like that phone call from Super Mario to President Trump bitterly complaining about Mnuchin went through after all! Think the scumbag LP’s got a few folks trapped with long positions … “oh, won’t tomorrow be interesting”!

Have a great day everybody!

-vegas

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