“A Friday message from the GBPJPY market!”
After 13+ hours of pure bullshit, where both Asia & early Europe have shown they
have no interest in pushing FX anywhere, up comes the sun in New York and a
whole group of criminal bank prop traders make their way to their screens
… “bigly & yuge” options expiration day in the “Stock Bellies” complex, and no
doubt in some way that will affect FX, but even with the brief dive to new lows for
the day in Cable [out of nowhere] here just as I write, ranges are still very light
and pathetic … 25 PIP range so far in USDJPY, and the upper 60’s for Cable even
after the new low that took out 1.24 on sell stops and added about 20 PIPS to said
range.
All in all, you have to wonder what kind of drugs FX is taking to deal with the
psychotic nature of trading these days … GBPJPY 9 out of 10 days, almost
straight up, then turn on a dime and now 9 out of 10 days [including today]
almost straight down … 800+ PIPS up, and now 700+ PIPS down … all of course,
reacting to the “risk on / risk off” label the talking heads of FX use every 5
minutes to describe trading action … complete and utter panic on both sides.
And while the Yen sits and basically diddles, until it doesn’t, Cable is another
story … I thought the U.S. was fucked up, then all you have to do is look at the
U.K., and realize BoJo isn’t exactly handling the flu crisis very well, and with the
BOE yesterday basically punting monetary policy to big banks, Britain is a
political & financial basket case that makes the U.S. look good by comparison
… that’s a tall order, but somehow they’ve managed to fuck things up about as
well as can be expected if you were INTENTIONALLY looking to bury the British
people.
Moving to actual markets, while the Yen diddles, an upward breakout of
EURGBP a mere few minutes ago, is putting pressure on Cable and that has
spilled over into GBPJPY … for a while now, the “driver” of the GBPJPY cross
has been Cable action, with only intermittent periods of some Yen movement,
which comes & goes like squirrel farts in the wind … after 13+ hours of trading
today, for Yen to sit there with a 26 PIP range is worse than pitiful … and now that
the sell stops have been puked at 1.24 in Cable, what next for a group of markets
that don’t seem to want to play … this entire European day so far has been
nothing but “lightning & crickets” … out of nowhere you get the quick move, and
then it dies down into sideways action … we just tested yesterday’s low in
GBPJPY, and underneath there were no sell stops to speak of, but the options
expiration day is just warming up.
Day over in the European session, and outside of the London FIX at 11 AM EST,
where both Euro, Cable & Yen put in some “funky” up/down dance, the day can
be summed up very easily … “outside of one 30 - 45 minute stretch when flu
cases in the U.K. were reported to be down, and markets caught a very slight bid,
it was a complete wall of selling highlighted by stop hunts on the downside, then
sideways movement until the next 3 … 2… 1… and down goes Frazier even more
… it’s really quite remarkable that after 10 straight days up, we now get 9 out of
10 straight down, and every tiny blimp up gets sold like it’s a fire sale … now into
the New York afternoon, and it’s still grinding lower … no rallies to sell cuz there
aren’t any of significance, and sure as hell not buying the grind lower and praying
for a rally that may or may not ever come.
The “Dragon trade” has a history of this kind of behavior, but rarely does it go
beyond 8 - 10 days before reversing … hell, even after the days of the Brexit vote,
you didn’t see this long of a stretch of either up or down days, with very little or
no corrective activity to drive out the “weak hands” in the market … very unusual,
but here we are nonetheless.
Only one algorithm buy signal today in GBPJPY … TURNKEY PAMM / MAM UP
SLIGHTLY [yesterday + today UP about 0.1%].
There were a few occasions during the session, when if GBPJPY had rallied
another 5 - 7 PIPS on those short lived bounces, sell signals would have been
initiated … but, they never materialized … the last few days has seen really weird
trading action, as if I’m looking at something on my screen that is yelling at me,
“hey, I don’t really want to go down or up, I just want to screw you, OK?
… c’mon, be a pal and punch the button”! … and now that we’re into the criminal
portion of the day, anything & everything to hurt you is on the table, in a group of
markets that are so thin right now, if you’re trading you’re out of your mind
… spikes from hell on tap, and you’re gonna love the slippage on fills … no thanks
… to give you an idea how bad conditions were today, as I write now, GBPJPY has
just put in the 2nd best rally of the day … about 16 PIPS … and from that, in 5
seconds 6 of those PIPS are gone … welcome to Gladiators, pick a sword
Komrade!
There were also a few occasions today, especially earlier just after the European
open, where if the market had turned roughly 5 PIPS, it could have set off some
buy stops and moves higher … instead, what we ended up with today is the
“loser formation”, where when you boil down the chart it looks like a capital “L”
… straight down and then sideways with very few rally bumps to make hay out of
and profit, and for the most part selling was no picnic either cuz the market made
you wait while grinding lower … quite frankly, I’m not sure I’d have taken the sell
signals even if they had arrived, simply cuz we’re at 9 out of 10 down days in a
row [the one up day was Monday, and that was mostly a USDJPY rally], and the
rubber band is getting stretched awfully far before the inevitable snap back … go
back on the dailies as far as you want, and while you’ll see 8 - 10 in a row over
the years, or 9 out of 10, or 10 out of 11, something along those lines, I don’t
recall seeing anything beyond 10 or 11 … not that it can’t happen, it sure as hell
can happen … Cable/Yen spec trading has only been around about 20 years,
which is only about 5,000 trading days [250 days per year], so from a probability
wave function perspective, I’m pretty sure the future holds some “funky” moves
nobody can foresee right now … talk to me in 10,000 years or so and then I’d be
more convinced something “can’t happen” … given the nature of markets today,
and simply the shit we’ve seen in 2020 alone, ANYTHING IS POSSIBLE!
FX, whether dollar pairs going way back to pit days, or crosses now in the last 20
years, have the unique ability to get people to think major bull or bear markets are
happening about every 2 or 3 weeks … first you can’t get a fucking down tick of 5
PIPS to save your life, and you become convinced you’re at an historic turn
… then, as if somebody sent out an email but forgot to send you one, it turns and
now you can’t get it to rally 5 PIPS to save your life, and here comes the bear
market … meanwhile, it carves you up and spits you out with impunity, as if it
knows whether you’re long or short … “I’ve seen up close and personal, this
drives people literally insane with rage and to the edge of the abyss” … not a
pretty sight.
I have said for decades, treat all of FX as if each day is its own bull or bear market,
and forget the rest … I’ve never “positioned” anything in FX, and only “trade” it
… and if it was impossible over these last decades to know where it was headed
one week / month from now, today it’s doubly impossible with all the bullshit
from China, the FED, pandemics, the Ruskies, QE, and the list could go on for
another 10 pages … what I do know without doubt or uncertainty since my first
day on a trading floor, is that trade positioning by specs versus the banks, and
then said specs get their stops run, is about the only thing that matters in trading,
and the banks have perfected it to an absolute art form … cuz as I said the other
day, in modern day manipulation of markets, banks hold all the cards, and get you
to “push the buy/sell buttons” when they run your favorite MT4 or MT5 technical
indicators, with them taking the other side of the trade, and when your “buy fuel”
is finished, they fade your ass quicker than a cheap suit in sunshine … now all
that’s left are the stops … rinse, repeat, what a racket.
Blog update on Sunday … outta here … until then mi amigos
… Onward & Upward!!
Have a great weekend everybody!
-vegas
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