SUNDAY UPDATE: NOTHING IS EVER FREE

“This IS the country YOU have allowed to happen … keep voting Libtard, & wait

and see what happens next!”

Of course, it doesn’t stop at the doorstep of financial markets, cuz the world has

central banks via CNTRL-P and the constant “Brrrrrr” of the magic money

machine … only what dumb asses the world over miss is that hyper inflation is

right around the corner, and who knows if your fiat will be worth the paper it’s

printed on come very soon into the future … quite frankly, and I wish it wasn’t so,

the U.S. as you once knew it, is doomed … no political will, a Godless society,

and down the rabbit hole the country goes … with each passing day, the

headlines get more bizarre & unreal, and you think Sheeple can’t possibly get

more stupid, and then you wake up the next day to see “The Twilight Zone”

unfold before your eyes once again.

Nothing ever really shocks me in financial markets anymore, but I was somewhat

surprised last week to see gold go mental via a full throttled volatility spike with

longs getting obliterated within 48 hours, and FX pairs doing absolutely nothing!

… the last 2 weeks has seen GBPUSD have its worst ranges of 2020 … check out

the weekly candlestick chart below, with commentary.

click on ANY chart or table to enlarge

Not a pretty picture to be sure, and it highlights 1 of 2 algorithm limitations of my

trading model … namely, when markets go “flat”, price movement goes UNDER 3

SIGMA [-3 SDEV or standard deviations from the mean of normal price action],

and the algorithm hasn’t been created or designed with these low movement “one

offs” in mind … why would it, it only happens approximately 3 days out of 1,000

[0.3%]?

For those needing a “refresher”, here’s what I’m referring to directly below.

Over time, the “steepness” or “flatness” of the mean of weekly ranges

[symbol “𝝁”] will oscillate, but the daily or weekly ranges will have the same

shape as above. Over the decades, Cable will see weekly “𝝁” normally between

250 PIPS - 350 PIPS, and the current yearly “𝝁” at the end of this week is at

304 PIPS … the last 2 weeks have seen ranges of 204.5 and 137 PIPS

respectively … highlighting “if you thought the week before was bad, take a

look at the last week”! … clearly more than 3 SIGMA below the weekly mean,

meaning only 3 weeks out of 1,000 weeks of price movement will see this

happen … and that means “to sit”!

On the other hand, gold provided the “flip side” this past week, when things got

out of control on Monday & Tuesday, and daily ranges went orbital via out of

control volatility to the downside … again,, the algorithm isn’t designed to trade

gold with consistent daily ranges OVER $30 - $35 PER OZ. … at that critical level,

the train goes “off the tracks”, meaning spreads skyrocket, slippage on fills

becomes even more ridiculous than normal, and the ranges of the M1’s become

a traders nightmare … even if you are up money on a trade, it means nothing cuz

it can be taken away in a heartbeat with an eye watering spike from hell to the

downside that can easily go $3 - $10 within seconds … get caught in this, and

now what?

This is precisely why I developed & created an “IVIX INDEX” for GBPUSD,

EURUSD, & XAUUSD … the figures for GBP & EUR are for the European session

from 11:00 - 19:00 server time [4 AM EST - NOON EST], and for XAUUSD for the

U.S. session from 14:00 - 22:00 server time [7 AM EST - 3 PM EST] … generally

speaking, the gold IVIX INDEX needs to be 2 times the level of EUR and/or GBP

to be considered EQUAL in terms of trading it … for EUR & GBP, any level

LOWER THAN 55 is a warning sign of potential trouble in the market for a lack

of volatility, and BELOW 50 is a clear signal to “leave it the hell alone” cuz you’re

just asking for trouble … readings of between 60 - 80 are IDEAL, and rarely will

you ever see readings over 100+.

Directly below, the IVIX INDEX daily levels for the latest week ending Friday.

Clearly, GBPUSD should exhibit greater volatility than EURUSD, but for the last

several weeks it hasn’t … this goes in cycles and shouldn’t last much longer,

as BREXIT bullshit and other matters U.K. come to the fore in the days / weeks

ahead … and as you can see, gold has lost its mind [if it ever had one!]

Directly below, the IVIX INDEX WEEKLY levels [5 day MA] for the latest week

ending on Friday.

Here, in the weekly average, it smooths out the daily fluctuations and gives a

better overall look at where IVIX INDEX levels are headed. Directly below, a

handy table of IVIX Daily [last week] & most current Weekly numbers in tabular

form.

Whatever advantage EURUSD had over Cable, it can’t be traded with a weekly

level of 52, cuz there are simply too many warning signs … so, back to Cable for

the start of the week and we’ll see what happens.

Directly below, the current week’s 20 Day Range MA’s for GBPUSD & XAUUSD.

GBPUSD

XAUUSD

And while these 20 Day Range MA’s give us some good info, nothing beats the

IVIX INDEX for what’s really going on as the market trades. I don’t include

EURUSD chart simply cuz it’s a mirror image of Cable, and why be redundant?

… whatever you see for Cable, EURUSD will look almost exactly the same, with

only the grid being different … onto the week … until tomorrow

… Onward & Upward!! 

-vegas