“Say hello to the DAX30 twins!”
Some days, you just have to sit back and watch the utter stupidity of a market
trading … today was one of those in the DAX30 … somebody put a thorn in
the “big girl” panties of the LP’s, where even during “Grexit”, things never got
this crazy like today … not only were the moves sudden, large, & vicious, the
LP’s for their part did their “Hoover Dam” best to hand out slippage that
would make Vito Corleone blush with envy.
It started right out of the gate at the European open, with Frau Merkel
speaking to members of the German parliament, telling them no solution to
her immigration mess was either in discussion or at hand at the E.U. summit
… so natch, the DAX30 rallies to new highs from the pre-market, leaving me
more than a little perplexed … “but hey, the games were just beginning, and the
scumbag LP’s had just warmed up”!
Add to that, USDCNH [“offshore” China Yuan, a/k/a “Reminbi”] is up for the
umpteenth day in a row [Yuan lower, meaning China is devaluing their
currency to fight President Trump’s tariffs], and both Hong Kong & Chinese
markets are moving lower … “it only makes sense the DAX30 is up on the high
… right”? [I should have started drinking at breakfast.]
And, after about an hour of sitting around and doing nothing, here come the
sellers … “well, about time”! … and now things can get crazy, cuz with
EU/China trade wars, Frau Merkel hanging in the balance, and oil prices
hitting yearly highs [WTI only], it’s a miracle this stuff is not about
1,000 points lower.
And now the purely liquid comedy gold of utter stupidity, from the LP’s, kicks
in and the “mystery ticks”, gaps up/down of 10 - 15 points in the bid/offer in
milliseconds, the running of stops, and of course the slippage, which has been
“baked into the cake” via the HAL9000 for MAX customer pain & LP gain,
can take hold in earnest.
Only one trade today … PAMM up slightly, nothing significant.
Multiple signals today, but a major problem … and that problem is the fact
that off bottoms, every single buy signal except one, saw quick & vicious rallies
up a minimum of 15 points, to more than 30+ points before hitting the aqua
PSAR “dots” and signaling a buy … “yea, ain’t gonna buy that”! Later, when
the selling picked up as the NDX100 was getting “monkey hammered”, five
times … yup, 5 … five times in a row the market made a bottom and rallied a
minimum of 15 points to a max of 30 points, gave a buy signal, and then
proceeded to collapse to another new low … “I warned yesterday, in the blog
post, that you can’t take these signals, cuz if you do, you’re doing things ass
backward, and that the problem is NOT that it won’t go higher still … no, the
problem is when it turns and collapses [cough… like today … cough], and now
you got a real problem on your hands, with a loss staring you in the face of over
20+ points if you act quickly … if you “deer in headlights” the situation, with
likely sell stops getting hit off, it can become 40 - 50+ points in a heartbeat
… now what? … how many winners does it take to make this back”?
The one trade I made today, my buy order got butchered like a fat hog, my fill
up almost 3 full points from the offer when I clicked the buy button
… fortunately, it rallied further and I sold very near the high of the M1 on the
rally … if I had waited for the turn lower, I would have gotten burned, simply
cuz when it turned, it turned with a vengeance and ran lower quickly.
The market today just brutal in application & scope … even if you had a
position on with profit, clicking the liquidate button anywhere within 10 points
of your entry wouldn’t be safe from loss … and of course, every fill gets you a
ride on the LP slippage roller coaster, where getting robbed at the local 7-11 is
cheaper … not a good trading day to say the least, and the market’s trading
action totally out of character … “yes, we all love intraday volatility, but there
comes a point where even that has limits, and you just have to sit back and shake
your head, it’s so stupid”!
Now, ready for a change of scenery? … some “numbers crunching” the math
software with other potential markets … guess what? … “well, it seems there is
another “sleeper” market out there, that I’m betting not many of you are familiar
with, but will offer you more volatility with shorter hours of trading, and will give
you more “bang for a trade” than you realize … that market is, the Hang Seng
[Hong Kong] stock index”!
Now, what makes this a potentially good market for us to consider; 1) this
week, 20 Day MA [daily range] = 429 points per day, and current [including
today] 20 Day MA [daily range] = 476 points per day, with many days between
400 - 800 point ranges, 2) awesome trading hours, especially for those in the
U.S., who want a volatile market, and are “night owls” at heart. Trading the
Hang Seng 33 CFD, is like trading July Soybeans in the late spring with a
severe drought, and about 90%+ of that range will occur in the 01:15 - 07:30
server time hours, AND THE MARKET SHUTS DOWN FROM 04:00 - 05:00
FOR LUNCH [in Hong Kong, of course] … that’s a 4 hour and 45 minute
trading day for this kind of action. That translates, for those in the U.S. to:
EAST COAST [EST] 9:15 P.M. - 3:30 A.M.; MIDWEST [CST] 8:15 P.M. - 2:30
A.M.; MOUNTAIN [MST] 7:15 P.M. - 1:30 A.M.; WEST COAST [PST] 6:15
P.M. - 12:30 A.M., and 3) during these hours a spread that is usually 2 to 3
index points, and approximately a 1 point RT commission.
The CFD at Turnkey is 1 lot = 1 * the index, and it is priced in HKD, which
currently = about 8 per USD; margin is about $40 per 1 lot, and you can bite
off whatever your risk profile allows you. For comparison, the futures market
in Hong Kong trades about 250,000 to 500,000 contracts per day, with each
point = 50 * the index, and the mini futures trade approximately
75,000 - 100,000 contracts per day, with each point = 10 * the index. In other
words, it moves, it’s got a huge following on the Pacific Rim, and the “Force
Volatility Algorithm” works “better than” very well in this market. I’ll have
more on this market in future blog posts [including the algorithm parameters
tomorrow], but it’s one I’m carefully considering adding to the 5 markets we
have now; “the spread is great, it moves and is volatile & is influenced by
developments in China, and the hours super … what’s not to like”?
Today, was simply, “I’m not giving money away cuz of “stupid shit” … those
days are over, and quite frankly if it isn’t behaving, it’s time to sit … when shit
gets out of hand, you do yourself no favors by sticking your face into something
that is gonna see yourself down money before you can say, “WTF was that?”,
and both today, tomorrow, and maybe Monday, things have the potential to get
really nasty & ugly if Frau Merkel goes “buh bye” over immigration and her
coalition government in Germany collapses … you think you’ve seen volatility?
… you ain’t seen volatility like what has the potential of happening if she is
shoved out the door, and so a word of caution for these 3 days cuz if you get
caught on the wrong side of history, your account will be “buh bye” as well”.
Yes, I’m a little disappointed in the way the market behaved today, and by
default another day of skimpy profits … but it’s profits, and all that really
matters is concentrating on algorithm signals, and taking them when they
make sense in terms of distance from the interim move lower, and leaving the
bullshit ones for others to lose money on and suffer. So, let’s see how this whole
EU summit works out tomorrow … I don’t see any possible solution for her to
survive, and my only real question is, “Is her departure already priced into the
DAX30”? … I don’t think it is, cuz up ‘till now it’s mainly been tariffs the issue
… in any event, we will know soon enough.
Tomorrow’s another day, and also end of month & quarter … could be some
violent position squaring ahead of the close … something to watch for for sure.
And with that, I’m outta here … until tomorrow mi amigos … “the future’s so
bright I gotta wear shades 24/7”! … Onward & Upward!!
PAMM spreadsheet directly below.
Have a great day 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
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