“Well, it was there a second ago!”
Everybody gets excited on the way down … everybody gets excited on the way
up … now in the “middle” of today’s “Flying Wedge of Death” [FWD] action,
aaaaaand the excitement is gone! Just another day in Cable before the most
important Holiday of the year … of course, I’m referencing “May Day”, where
you too can celebrate with friends & fam, and explore the wonders of
Communism while happily dancing around the “Maypole”. In what can only be
described as the most ironic event of the year, capitalist markets in Europe will
be closed to honor the occasion, while in the U.K., it’s simply an excuse to binge
drink and then pass out. “So what a billion people murdered under communist
rule over the last century, you got to break a few eggs when you make that
“utopian” omelette … right? … and besides, there’s a lot to celebrate when you
spread misery equally, and allow the elites a pampered lifestyle not available to
everybody else … remember, all SJW’s are created equal, only some are more
equal than others”! Party on Comrade!
Coming into today, I could smell the trouble last night … very thin volumes, no
news out anywhere to speak of cuz it’s Monday, and most people over in
Europe & the U.K. treating today like the middle day of a 4 day weekend
… perfect conditions for a clusterfark in GBPUSD if there ever was one. And,
true to form, the market did not disappoint on those grounds.
Turning to today’s GBPUSD market … Holiday atmosphere, no doubt about it,
but the move lower right out of the starting gate somewhat surprised me … if
ever there was a day for reversal action, this was it, and it looked very much like
a short rally attempt might break out price slightly to the upside … and from
that, we’d see a reversal lower. Instead, it was the opposite, and except for one
M15 candlestick that saw Cable go 20 PIPS lower quickly within minutes, it
was a very, very tough go on the downside.
Most significant, was once the 1.37500 level was breached, there were quite a
few gaps higher on the 2 - 4 PIP range within a millisecond … this is reflective
of bank order flow, where the bank fills a corporate buy order, a few PIPS
higher, and then immediately scoops up all offers on the electronic trading
platforms in a nanosecond … a good dealer on an FX desk knows where the
market is, and what size is available up to the price he gives the corporate
order, and if he/she is good, there will be enough of a gap there for the bank to
call their own … this is the reason you see those gaps in price when there’s a
very tight bid/offer on your screen.
Only 2 short trades today … PAMM up slightly, nothing of significance.
I got short twice today on small bounces, and it was like shopping for Unicorn
meat at the grocery in getting out … the stuff just wouldn’t go down … dribs
and drabs by a tenth or two up/down from my fill price, followed by a blast up
of 2 PIPS, but then was faded immediately and it was right back down to my
fill price … for much of the morning hours, this is how the market traded, and
it was impossible to stay short. Remarkably, there was a time this morning
where Cable hugged the low for over an hour within 2 - 3 PIPS of the low, and
wouldn’t budge.
Directly below the Cable algorithm in M15 form for the day.
The blue box the time frame for our trading, the depth of which is the first 30
minutes of trading from 06:00, and the white line simply the midpoint of that
range if you’d rather use it than the blue box … either way is valid, although
today, you see no reversal from the blue box, cuz it never breached the top
boundary line, but you did see a reversal from the midpoint line, on news
Israel had “upcoming news” about Iran … markets spiked on that news, but as
you can see, there was no follow through at all.
You can also see just how rough the day was from either side … not really a lot
here today, and I expect tomorrow to be worse, since most of Europe & the
U.K. will take off and do something … most I’m sure won’t be celebrating
communism & the workers paradise yet to come if only we’d give it a chance.
So, we’ll see what tomorrow brings, but we really need to see the upside tested
with some kind of rally … we simply can’t go down every day, and quite
frankly I’d love to see some buy stops get set off early that takes us above
1.38250.
On the flip side, the news out of the U.K. just continues to get worse
… economic stats are dismal, May’s government looks like it could be in
trouble over the Amber Rudd affair, where one of her close friends and
cabinet secretary got caught lying about immigration policy, and there’s
always the clusterfark known as “Brexit”, but the “setup” for a rally needs to
start with a blast down early, then reverses with power … it’s the only way this
stuff can stop the bleeding to the downside, as everything else gets sold with
both hands by dealers, banks, and hedge funds … at some point, they got to get
it stuffed up their noses, and my trader sense is this is how it will happen.
LP’s did their job today … fills and pricing excellent, so I give them their due.
All told, outside of that one M15 candlestick, a brutal day to hold any position,
as EURGBP was all over the place in terms of range, and it gave many a
headache to be sure. Other than that, not much to mention … clear away the
smoke and mirrors of the opening 30 minutes, and the one M15, and you’re left
with an FWD inside an approximate 45 - 55 PIP range for the most part, where
like most FWD’s, the 5 & 9 signal generator on the M1 is hopelessly out of sync
cuz price is moving too fast like a yo-yo … wait for the cross of the 5 over the 9,
or vice versa, and you’re buying tops and selling bottoms … throw in some well
timed price gaps just to make your life miserable, and you get the general idea
of how the day shaped up from start to end.
Just a boring day … I dropped my volumes down cuz the action was terrible,
and with no real trend developing on the M15, and no new breach of the lows
to extend a rather pathetic range for the day, and the inability to rally until the
Iran rumor mill made the rounds, what’s the point of getting size on and then
getting chopped to death? We’ll see what tomorrow brings … hopefully, more
than I’m expecting … until tomorrow mi amigos … I’m outta here
… Onward & Upward!!
PAMM spreadsheet directly below.
Have a great day everybody!
-vegas
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