SUNDAY UPDATE: “FUN-DUR-MENTALS”

“Say hello to U.S. financial markets … nice job manipulators!”

Strictly speaking, WTI crude oil is NOT a financial market … it’s a commodity

market, and unlike the financials, it’s not “cash settlement” based … eventually,

you have to either deliver crude oil or take it … not so with the financials, cuz

with the CNTRL-P button available via the FED, just push the button and print

some more QE … I mean, how hard can it be when you can create as much as

you need to manipulate? … whether you’re looking to keep gold down via the

“Rally Protection Team” [RPT], or keep stocks propped up at all costs via the

“Plunge Protection Team” [PPT], the money is there to manipulate.

And the “bright bulbs” out there will notice I’m referencing U.S. financial markets,

where most of the government manipulation takes place, right alongside the

ChiComs via the Shanghai index and their “National Team”, and the BOJ via the

Nikkei index in Japan … the rest of the world not so much.

This should bring up some critical and important questions regarding markets,

especially those the most heavily traded and followed, which starts with, “Are

there ANY markets that aren’t severely manipulated by government”? … and the

answer is, ‘there are only two [2]” … 1) crude oil [WTI and/or Brent], and 2) the

Hang Seng stock index in Hong Kong … that’s not to say there aren’t attempts

by various groups to control the action, but they don’t come from governments

per se.

And as we’ve seen in gold, unless you understand the manipulation and how it

works, you don’t have a prayer in making money attempting to trade it … there

are NO “fun-dur-mentals” when it comes to gold … it’s simple really … you’ve got

the world buying gold, and the FED, BIS, and their BFF’s the scumbag bullion

dealer banks selling … and since gold is priced in dollars, it’s the FED’s call. The

only things that matter in this market are 1) understanding the relationships

between the Asian, Euorpean, & U.S. sessions, and 2) global interest rate

forecasts, especially the U.S. via the FED.

On the other hand, there’s the Hang Seng Index in Hong Kong … this index is

comprised of 50 stocks, and there are 2 futures markets that trade the index via

the Hong Kong futures exchange … 1) the regular sized contract, which is

HKD $50 per 1 index point, and 2) the emini futures contract, which is HKD $10

per 1 index point. Remember, the index is priced in HKD, and currently the rate is

approximately $8 HKD = $1 USD.

Pretty much all “offshore” [meaning NOT domiciled in the People’s Republic of

the United States] brokerage houses will offer a CFD based on the Hang Seng

Index. Now, if the scumbag LP’s base their market making on the futures, the

bid/offer spread in the index is gonna be wide … very wide … to give you an idea,

currently Turnkey on Friday was bid/offer quoting their CFD at approximately 23

index points. If you can get a cash market quote on the main components, the

bid/offer spread will be very tight … on Friday, Coinexx on their MT5 [NOT MT4]

trading platform has their Hang Seng Index CFD bid/offer spread at 2 - 3 index

points … Now, you tell me, “do you want to hand the scumbag LP’s

approximately 20 index points per trade”? … well, I don’t!!

Coinexx’s CFD symbol for the Hang Seng is “H33HKD” … their CFD is based on

the top 33 stocks, out of 50, that move the index. Currently, this CFD trades

about 100 index points below the actual Hang Seng 50 Index … it trades in whole

integer lots, and each CFD 1 lot is 1 * the index …  OK, now let’s convert this to

dollars … CFD index is approximately 27,000 … divide by 8 [HKD = USD] = 3,375

in dollar terms. From what I see, margin is calculated at 200X, so the margin on a

1 lot is about USD $16 … so, a 1 index point move in the CFD is = approximately

USD $ 0.16 per 1 lot … round turn [RT] commissions = USD $ 0.40 per 1 lot.

Wrapping it all up, with a 2 point spread, and RT of about 2.5 [0.16 * 2.5 = 0.40],

your net cost is about 4.5 index points … for an index that consistently has

some of the largest moves of anything on either the MT4 or MT5, in any market

category, this market offers the best value going away. Currently, the 20 Day

Range MA for H33HKD is approximately 364 index points [see below] … take

your net cost and divide by the 20 Day Range MA, and that = 0.0124 … for gold,

it’s current 20 Day Range MA = 12.56, and if you’re lucky your net cost to trade

it will be 0.15, therefore that = 0.0119 … for the SP500, its current 20 Day Range

MA = 33.7, and if you’re lucky your net cost to trade it will be 0.42, therefore

that = 0.0125.

So, you can see that the net costs to range ratios hold very well … however,

what you don’t get in the other 2 are consistent volatility, that you get almost

every day in the Hang Seng. I’m adding the Hang Seng CFD to my list of

tradeable markets.

Tonight [Sunday], Turnkey FX is switching servers … when a brokerage house

does this, it usually means ushering in new markets and/or new LP’s … and

while they are tight lipped about the switch, I’ve already told them via numerous

emails over the last month, that they are not competitive anymore in the

marketplace in most of their MT4 markets … 3 years ago, they were the best in

the world in terms of both lowest bid/offer spread AND lowest RT commissions

… today, they’re “also rans”, and have neither the lowest RT commissions or a

market they are #1 in for lowest bid/offer spread … quite frankly, I think the place

has been sold by the original founders to a group of people who don’t have a

clue … could be wrong, cuz they don’t telegraph anything or give anybody any

hints, but if you just look at the way the place is run, I can’t imagine the original

founders have let the place turn to shit by plan.

So tonight, we’ll see what Turnkey has up their sleeves, cuz the way it stands

now, there’s no way in hell you trade the H33HKD and hand them free money

with a 20 index point gift on every trade … I’d like to be optimistic, but I’ll hold

judgement ‘till I see what they’ve done … more on this in tomorrow’s blog post.

Directly below, the chart with the 20 Day Range MA’s.

click on any chart to enlarge

As you can see, the H33HKD has very good ranges and volatility. Directly below,

the top 30 constituents that feature on the Hang Seng, as of January 2018, are as

follows:

• Galaxy Entertainment Group Limited
• Hang Lung Properties Limited
• Power Assets Holdings Limited
• The Bank of East Asia Limited
• China Resources Land Limited
• Henderson Land Development Company Limited
• Lenovo Group Limited
• CK Infrastructure Holdings Limited
• BOC Hong Kong Holdings Limited
• Hengan International Group Company Limited
• CLP Holdings Limited
• China Resources Power Holdings Company Limited
• Sun Hung Kai Properties Limited
• China Mobile Limited
• The Hong Kong and China Gas Company Limited
• CITIC Limited
• AAC Technologies Holdings Inc.
• Sino Land Company Limited
• Sands China Ltd.
• AIA Group Limited
• China Mengniu Dairy Company Limited
• Industrial and Commercial Bank of China Limited
• WH Group Limited
• China Petroleum & Chemical Corporation
• CNOOC Limited
• Tencent Holdings Limited
• Wharf Real Estate Investment Company Limited
• Ping An Insurance (Group) Company of China, Ltd.

Banks, and other financials, tech, real estate, and telecommunications make up the majority … anything that affects high tech and/or interest rate changes will have a big effect on the CFD.

So, we have tomorrow & Tuesday before the volcanic FED meeting on Wednesday

… quite frankly, I don’t see how Spicoli threads the needle and meets market

dovish expectations with rate cuts and/or bullshit, unless they all out panic and go

full retard rate cuts, with something along the lines of a 50 basis point reduction

… that would be quite a turnaround from December when they hiked rates … talk

about clueless, this group of faculty lounge Twits take the proverbial cake.

So, we’ll see what happens in gold … there should be some downward bias after

Friday’s ugly action … the daily candlestick chart looks horrible with that big

reversal staring it in the face … onto the week … fasten your seat belt … until

tomorrow mi amigos … Onward & Upward!!

Have a great rest of your weekend everybody!

-vegas