THE SHIFTING SANDS OF “RED LINES”

 

“Amazing! … you have a career as an investment analyst ahead of you!”

So, our head of security “Butch”, weighs in above, and discovers an ugly truth 

… “all the things you think you know cuz they come from those in authority, are 

nothing more than whimsical illusions attempting to influence behavior … like 

for instance, “talking heads” on financial MSM who talk their positions endlessly 

to get others to join the position so they can get out … shifting sands or pure 

bullshit”?

Everything is “certain” ‘till it isn’t … like EURCHF at 1.20 … like stocks have 

to go higher … like the FED knows what they’re doing … and finally, 

USDCNH is a lock to go through 7.0000 sometime soon. Gold? “Only 

Americans [collectively, not everybody] don’t care … everybody else in the world 

views it as money”.

So, it should come as no surprise to see investment analysts “poo poo” gold 

endlessly like it’s a religion … “analogous to Libtards and “global warming” 

… err wait, that didn’t work … make that “climate change”, cuz that way it 

covers all the bases for the clueless”. Gold only matters when it does … like if 

you live and have any wealth in Venezuela, Argentina, or Turkey. But, and this 

is  very big “but”, it’s predictable behavior due to collective fear & greed 

among the masses, makes it a great trading vehicle … “you wouldn’t know it 

this week, cuz markets are in an “Alice in Wonderland” environment, with ranges 

that redefine the word “tight”, but it’s only temporary”.

Turning to today’s gold market … “wait … what”?

 

Another low volume, low liquidity, bullshit day … “are all gold traders in 

Northern Florida? … it’s 2 PM EST., and this is about as bad as it gets, not 

that anything else but stocks getting “monkey hammered” is going on,, cuz all 

around the FX arena it’s “deadsville”. So far today, a paltry $6 daily range, 

and about a $4.50 New York [7AM onward] range … throw in the false 

breakouts and “Flying Wedge of Death” [FWD] on both sides of the ball, mixed 

in with panic spikes to catch traders off guard, and you get today. 

Directly below, the daily candlestick chart, and you can clearly see, the second 

 “doji” spindle day in a row … stuck in the middle of an 8 week range.

 

click to enlarge

“Seriously, can it get any worse than this”?

Two [2] algorithm trades today … PAMM up a few bucks.

Two [2] legit algo buy signals, the first is a “false positive” small loss … no big 

deal, but with intraday volatility very low and ranges so tight, it creates a 

bigger problem for statistical significance of profit than if both are higher 

… the second was long as gold powered [snicker, snicker] through its old high 

and made new highs for the day, and I liquidated on the spike … the high in 

XAUUSD was 1291.72, but I never saw anything on my screen higher than 57 

… a break of 40 got me to liquidate, and the fill was excellent at 37 … this is 

about as tough a trading as you’ll ever see, and if you don’t use the spikes to 

liquidate, you’re toast. It is what it is, though, and ya just move on … in this 

market we simply grind higher with profits!

Ok, it’s after 2 PM in New York, USDCNH not really doing much of anything 

to contribute to the “correlation trade”, and holding in a very tight [for it] 

range of approximately 250 PIPS … market here has moved slightly lower 

[Yuan/Reminbi higher], which powered the panic short covering in gold, but 

it’s nowhere near the days low … I’d be surprised to see a sustained move up 

in gold here in the late afternoon, but like I’ve said previously, it’s all about 

China and the Yuan/Reminbi at this point in gold trading, so any kind of  

“monkey hammering” of USDCNH lower will see spurts higher in XAUUSD 

and gold futures … any serious price appreciation in gold, and you’re gonna 

need to see the $1203 price level taken out on the upside, followed quickly by 

$1208 … anything less than that, and the bias is clearly to the downside on the 

charts … problem with being short this market, though, is that shorts 

ALWAYS panic first at the first sign of water overtaking the ship, and your 

buy stops get brutally filled and beaten to a pulp on the upside.

Some slippage today on the futures side of the “e micro gold futures” on C2 for 

our signals there … you’ll remember, US brokerage houses can’t offer spot 

gold, cuz STFU and trade futures. In any event, I’m sticking with it another 

day, and if tomorrow sees more slippage, then I’ll trade the regular gold 

futures front month after that … not gonna waste any time monkeying around 

if the prices aren’t right and in line with XAUUSD and the P/L generated in the 

PAMM. So, we’ll see what tomorrow brings and make a decision after that.

Gold extending a little bit here in the NY afternoon, but just marginally … the

range for the day now $7 [wait, I’m breathing heavily], and USDCNH not 

doing anything … shorts on the run into the Wall Street close it looks to me.

Given the fact that the entire day was bullshit, anything on the P/L to the 

upside is a bonus … and quite frankly taking trades after 2 PM is very risky on 

a “normal” day with range … the last 3 days has seen anything but that, as the 

financial world goes comatose over China, its currency, rising global bond 

yields, and falling equity prices [“wait! … aren’t they supposed to always go up? 

… No? … if only somebody had warned me”!]. So, onto tomorrow … until then

 mi amigos … Onward & Upward!!

PAMM Spreadsheet directly below.

 

click to enlarge

UPDATE: “Well, that escalated quickly to the downside, didn’t it”? After 3 PM, 
and US stock indices are doing their best imitation of “Thelma & Louise”, and 
it has gotten ugly quickly … still, with the SP500 down over 80 index points 
from its high today, and gold is up about $1.50 from my last trade liquidation 
… rather pitiful response to a global meltdown of equities IMHO, although 
USDCNH has rallied, which I’m sure has traders extra cautious. “Oh, won’t 
tomorrow be interesting”?

Have a great day everybody!!

-vegas

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