DISTURBING TRENDS

 

“It’s happening way too often … I see it … I  believe it!”

The nice thing about probability theory, is when you know what “tail risk” is 

on either side [both sides of the normal distribution curve], and it starts 

showing up in markets day-after-day, week-after-week, that it isn’t “tail risk” 

 anymore, cuz if it was it wouldn’t be happening with such frequency as we 

see in markets today. There are three very disturbing trends I see developing 

in FX, that make life difficult at best for traders; 1) the increasing volatility in 

the Asian session, 2) the frequency of the “Flying Wedge of Death” [FWD], 

and 3) markets moving straight [up or down] without any retracement 

whatsoever.

As we have seen, over and over again these last months, and most likely you 

can blame the rise of China as an economic power on par with the U.S., the 

Asian session is becoming more volatile … and this is having a very unsettling 

effect on the rest of the trading day, leading to subdued ranges especially in 

Europe. Today is the 7th day in a row Asia has opened and taken EURUSD 

higher … some of those 7 have been on expanded ranges, others more subdued, 

but coming in every day and seeing what the Chuckleheads did overnight is 

disturbing, cuz they are 90% wrong.

The FWD, which in years past used to occur every “blue moon” or so, has 

almost become a daily appearance in FX … this makes it very hard to hang 

on to any position, knowing that big money scumbag TBTF banks are shoving 

markets for stops … their collective goal is to create chaos and profit from it, 

and in the process add a few tenths of a percent to firms capital … do this 

every day, and how can shareholders complain? It sure beats buy/sell and 

hold, or listening to a group of dysfunctional analysts tell you where they think 

it’s going, only to be proven wrong about 80% of the time.

And finally, as today’s EURUSD trade so aptly shows via the M1 candlestick 

chart if you care to look closely, markets give no quarter to those looking for 

good trades … sure, the “setup” matters, but we are seeing less and less of good 

“setups”, and more and more of “straight shots”, where a market takes off [up 

or down] and never looks back with a retracement … and no, 2 M1’s down 3 

PIPS isn’t a retracement. More than anything else, it’s this development that 

has me more dismayed than anything else, cuz you have to be like the lion 

sitting in the tall grass watching & waiting for the weak gazelle … in prior 

years, you’d get plenty of these during a trading day… today, maybe you get 

one or two, but many times you get Mr. Jack Squat.

And of course, after the move, there isn’t diddly squat to do, cuz now the 

market goes into paralysis for hours on end, going back & forth a few PIPS 

in a mindless dance … if you missed the move, or got caught the wrong way, 

now what? … where’s the next market move that day to get you to 

profitability? … NEWS FLASH: “There most likely isn’t gonna be another one 

… you’re toast”!

You can thank central bankers the world over for these phenomena … in their 

combined effort to prop up TBTF banks, they make sure they make money at 

your expense … little by little, over the last few years, their behavior has 

wreaked havoc on the hedge fund industry, forcing many large commodity 

pools, equity funds, and FX hedge funds to shut their doors … no way, with 

billions upon billions of dollars, can you be quick enough to catch the turns 

with size, to be able to sidestep the damage … and what you end up with is 

what you see in markets today; disjointed, speed of light moves followed by 

nothing, and then it’s time to turn the other way and hunt on the other side of 

the fence … all the while the scumbag banks are protected by central bankers, 

who will do whatever it takes to make sure markets cooperate the “right way”. 

This is the market environment we find ourselves in today … like it or not 

[and I don’t], this is reality, and to ignore it or refuse to believe and accept it 

will lose you money.

Countering these efforts isn’t easy, but we have 2 things on our side; 1) razor 

thin spreads and meaningless RT commissions, and 2) by being small, we are 

unnoticed and can take advantage of very fast market conditions … the “big 

boys” may have the first as well, but in no way can they match our agility.

Turning to today’s market … 7th day in a row the Chuckleheads take 

EURUSD higher from the day’s open; “even a broken clock is right twice a 

day”. U.K. inflation data came in about as expected, but Cable saw the bids 

come in nonetheless and lift it higher … that dragged EURUSD higher and set 

off some buy stops. USDJPY testing 15 month lows at 107.31, market around 

107.50 leading to equity weakness, and giving U.S. dollar some heartburn.

Once again, the market moves before the 800 lb. gorilla in the room comes 

tomorrow; I’m referring to U.S. inflation figures, which will rattle the 10 YR, 

Treasury & the SP500 … too hot a number over consensus, and we got 

another market selloff on the way. Apparently, EURUSD can’t wait and 

decided to move upward beforehand … hot numbers tomorrow, and my guess 

is EURUSD heads back lower with a vengeance. Sure, it’s “hurry up & wait”, 

but that’s what markets have morphed into; an absolute addiction to news 

and central bank help to give direction … without any of it, nobody wants to 

play anymore, and we sure have seen that manifest itself on slow days.

We’ve seen this type of action recently, where EURUSD moves prior to a 

market moving report or event; don’t quite know what to make of it, 

except to say somebody is obviously nervous and wants to cover, but quite 

frankly it doesn’t make a lot of sense to chase this market higher … if you 

do, you will pay dearly for the privilege. Here, right before NYSE open, I’d be 

surprised to see any large moves going forward … stocks look to be relatively 

quiet today given tomorrow’s CPI print … rightly or wrongly, the trade is 

placing “bigly & yuge” importance on this number, as a guide to further price 

action in a host of markets, including EURUSD … I’m not sure it’s warranted, 

given the fraudulent nature of the Department of Fairy Tales & Unicorn’s CPI 

makeup and how it distorts practically everything … “Sure, take out food, 

housing, & energy, and then tell me there’s no inflation … WTF”!

One trade today, PAMM up a few bucks short of 0.2% on the day … market 

provided a great setup, and the profit immediately followed.

Today’s action is more than likely nothing compared to what tomorrow brings 

… I’m somewhat surprised we’ve seen as much action as we have today, given 

the importance the trade is putting on the shoulders of tomorrow’s report … 

really wasn’t expecting any kind of price action, especially up to 1.23560, as the 

scumbag LP’s took the buy stops for a ride. From here at the NYSE open, I 

don’t see much happening the rest of the day … and a couple of hours later, as 

Europe closes, it’s crickets all around … I’m outta here; until tomorrow mi 

amigos … Onward & Upward!!

PAMM spreadsheet directly below.

 

Have a great day everybody!

-vegas

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