DON’T CONFUSE BRAINS WITH A BULL MARKET

 

“EURUSD never goes lower again ... evahhhh! … oh, and pigs fly.”

I came into the Asian session last night with only one trading plan; “EURUSD MUST GO at least 20 PIPS lower within 2 hours of the open, or else I come back at the European open 6 hours later … cuz if it doesn’t happen in this time window, the probability of it happening before Europe opens is very, very low. Now, at the European open, if Asia has not done what I stated above, I’m going to need to see Europe go lower and take out the low, and look for spikes down to get long. If that doesn’t happen, then only “sharp” spikes down 15+ PIPS or more in an M1 will get me long at the end of any kind of retracement; I’m not interested in algorithm signals, on this shortened Holiday session, simply cuz in this heightened, hyperbolic bull run, the algorithm is too slow, and I’m not buying spikes up that are off 12 – 20+ PIPS from the low to get long. If EURUSD goes higher, then I let it … simple as that, cuz “pigs don’t fly and neither does EURUSD”, and when it starts to retrace, nobody … and I mean nobody … knows where the retracement ends [usually your stop] … I can tell you most likely how it ends, but not from where”.

And what we saw today after the European close is what I wanted to avoid all day long … directly below the landmine M1 chart.

 

That M1 above is what you run into in hyperbolic bull markets … first the shorts get cleaned out … most likely tonight in Asia, or tomorrow starting with the European open, expect the “Johnny come lately” sell stops of the longs to get wiped clean … don’t misunderstand, I’m not looking for some kind of big break here, but you simply must understand the importance of the “setup” of the EURUSD trade before you go wandering in and get long, otherwise you get hurt on the short plunges lower; i.e., your sell stop gets filled terribly, right at the point you should be buying. If we don’t get it in Asia, I’m confident we’ll get it in Europe or the U.S. session. “The absolute worst thing that can happen for tomorrow’s trade in EURUSD, is for Asia to open higher and go higher … and that sets up a reversal day when they open the trap door and clean out sell stops, right on the very day of at least a short-term top. Maybe that spike, in the chart above, at the European close is a short-term top … cuz here’s what I know with 100% certainty: they clean out every short, and suck in every last “I can’t take it going higher one more second” long, and then the “profit taking” commences. If the past is any prologue, the drop will be quick and vicious, and then the bids come back and an hour later, EURUSD is hitting a new high for the day”. Cuz if you somehow think the scumbag LP banks are going to make the trip to 1.30000 an easy ride … “sure, and I got a flying pig to sell you cheap”.

And if by chance Asia opens EURUSD sharply higher tonight, without any move lower from the close, all I can say is “God help the stupid”, cuz I don’t think it will stand either in the European and/or U.S. sessions … sure, it could happen, but I’ve seen this rodeo play out many times in the past, and if they do that, it ends butt ugly later in the day. My point here is simple: if you keep buying algorithm signals higher and higher every day, there comes a point you get a signal and in 3 minutes it’s 50 – 100 PIPS lower … all your previous winners wiped out in seconds. “I’m not saying the retracement needs to be large … but it needs something … large major markets just don’t open higher and go higher every day … and the longer it continues, the worse the ending is likely to be". So, remember “setups” and how important they are, or come in one day and get brutally whacked cuz you didn’t pay attention.

No trades on this shortened Holiday trading day, simply cuz all the “setups” were wrong. Yes, the algorithm did have some good trades in the mix, but you needed to pay up for them … something I really don’t want to do … a few PIPS is Ok, but 15+ PIPS, no thanks. We’re at a point now, after today, where going higher without some kind of retracement is going to be tough … at a minimum, EURUSD needs to consolidate gains and suffer some light long liquidation as it chops around before putting another leg higher into the books. The “setup” starts with the “Chuckleheads” in Asia, who 90%+ of the time are wrong … in order to go higher, Asia must have some kind of long liquidation, or those wishing to pick a top and get short, otherwise there will be hell to pay either in Europe or the U.S. later.

I love these kinds of markets, but you need to understand how the daily “setup” influences the trade. I’m looking for some light liquidation of longs to get us long on the turn; here’s hoping we get it … I’m outta here … Onward & Upward!!

PAMM spreadsheet directly below.

 

Have a great rest of your MLK Holiday weekend everybody!

-vegas

UPDATE @1:15 P.M. New York time: Have the Germans decided to trade into the night via European banks? Have the Japanese decided to burn the “Midnight oil” and trade into the wee hours of the A.M. in Japan? No? Then, with today being a “bank Holiday”, and trading on Wall Street supposedly closed for MLK day, somebody explain to me how EURUSD gets a 30 PIP range in afternoon New York trading … you think the banks give a crap about this “Holiday”? “Stop, my side is hurting”.

 

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”!