DUELING BANJOS

 

“It’s either “risk off” OR it’s interest rate differentials … FOMO & Oh No!”

It’s a “risk off” day, so say the “experts … rate differentials out of the limelight for

the moment, as attention turns to the “Spoos”, which at the moment are hugging

the lows overnight as the sun comes up in New York … and it’s either rates or it’s

“risk off”, that determine the flows … I guess the ChiComs make the call as the

day starts … and while “risk on” & rate differentials usually mean a rising

USDJPY, “risk off” usually means a lower USDJPY [YEN rallies] … and for the

34th millionth time, I’ll ask, “why is the YEN a “safe haven” currency? … it makes

ZERO sense.

Global recessionary fears are pushing the 10 YR. rate towards 3%, and the

“Spoos” aren’t reacting to “bad news is good news” … that’s a double dose of

bad news for USDJPY bulls, but so far while the rallies have been very tiny, there

isn’t much to the downside either [so far], and the day’s range at NOON in New

York is a paltry 113 PIPS, having just hiit a new low for the day from when it had a

range of about 90 PIPS … still pretty far away from its 20 Day Range MA of about

158 PIPS.

What makes the downside particularly dangerous, is the over extended rise

USDJPY has had over the last few months … parabolic comes to mind … how

many positioned longs do you think are still hanging around? … my guess is

plenty … cuz the problem is one of “execution” from the long side on days like

this … you simply have no idea how ugly the red spikes down can be ‘till you get

one that hoses you and leaves burn marks … minutes crawling up, down more in

seconds … and if you hit the button to liquidate cuz you just are seeing in real

time a red spike, you’re already toast … your fill will be at the bottom guaranteed.

Add to this clusterfark end of Q2 and month end are institutional flows where you

got no idea how ugly it can get … these flows can be “bigly & yuge” or they can

be light … you think the scumbag LP banks are gonna let you know first? … and

so, treading lightly here is the order of the day if you have any brains as a trader,

and USDJPY is different than the others cuz it can go with “Stock Bellies” ‘til

about 3 PM EST before it’s a good idea to give up the ghost ‘till the Asian session.

Looking at the landscape of FX dollar pairs, we got reversals all over the place

… one gigantic clusterfark of stupidity, aided and abetted with decent VIX and

“scumbaggery & fuckery” guaranteed this afternoon in New York after Europe

closes … “as a buyer of USDJPY, it doesn’t do me any good to see the 20 Day

Range MA hit [or come relatively close] in mid afternoon New York, or even later

… it’s too late in the day … either it goes higher or gets within about 10% - 15% of

the 20 Day Range MA before I deem buy signals statistically significant enough to

take … if I take them to soon, I open myself up to further downside with no

appreciable rallies unless it reverses and starts some kind of reversal day … and

today we haven’t seen that at all … there were opportunities, but at critical

junctures USDJPY didn’t swing around and go higher, it in fact went lower … so,

all you can do is sit and wait … maybe you get something, maybe you don’t, but

you don’t go after “coin flip” trades either.

Except for very brief moments, both the HULL 200 EMA on the m1, and the HEMA

on the 15s have been to the downside … at times sloping extremely negative

… and when you see that as a buyer, you have to put your hands in your pocket

and ignore buy signals cuz they will either be “false positives” or very short in

duration & scope … neither is good … sell it, or leave it alone.

Once the 4th is over, volumes will go up and my trading hours will extend into the

early afternoon of New York … no trades today in the EOM & EOQ FX flows … just

not a good day for longs, but fortunately we sidestepped this clusterfark … until

tomorrow.

… outta here … “The future’s so bright I need 2 pairs of sunglasses 😎😎, and my

own Brinks armored truck” 💓!! … Onward & Upward!!

-vegas

CENTRAL BANK BLUFFS ARE BEING CALLED OUT

 

“How long can the BOJ’s bluffs work!?”

It’s not only the BOJ who’s bluffing, the ECB every day sends out Apparatchiks

to hawk rate hikes … the intention to keep EURUSD above par to the dollar … but

for the most part, it’s the insane BOJ that is bluffing TRILLIONS to keep yield

curve control [YCC] … and since they’re printing trillions of YEN to keep YCC,

they’re also the ones solely responsible for a depreciating currency … so, to

B.I. Itch about a rapidly falling YEN seems a little bit hypocritical given the

situation … and so here comes the huffing & bluffing, cuz if you print MOAR! to

intervene, you make the problem worse! … and the “market” [cough, bullshit,

cough] just keeps on heading higher … where’s the top? … 140? … 150+??

… who knows, it’s up to Spicoli to create a depression and take U.S. rates lower,

thus saving Japan from monetary ruin … it’s all they got!

And for those newer readers who discover the website, and are wondering exactly

what the trading algorithm is predicated upon, that’s easy to answer … markets

move, up/down who cares, only that they “move” [a/k/a “VIX” or volatility] … when

they move they “correct”, and then resume the short term trend … and that’s what

the algorithm intends to capture … and when VIX gets too low, there is no

corrective activity, simply going from one end of a small range to the other [a/k/a

“The Flying Wedge of Death” [FWD], which kills a lot of accounts] … everybody

knows this as “chop”, and it can kill an account cuz it gets people to buy highs

and/or sell lows and then cover at a loss multiple times … it’s why you have to

pay attention to the 20 Day Range MA I print every Sunday on the bog update for

the week coming up … for more, read the manual!

Moving onto today’s “Slots-O-Rama” in the world’s largest casino, not much

going on besides USDJPY … even “Stock Bellies” are slow & lethargic, as the

BTFD’ers aren’t quite as sure about rising prices as before, so they aren’t nearly

as willing to chase & FOMO price up the ladder … USDJPY surprisingly weak as

price touched the 137 level [natch … thus clearing out the spec buy stops at 137]

before backing off 30 - 40 PIPS [so far] … this is a new 24 year high for the pair,

and it comes as 10 YR. Treasury rates are moving lower [after being slightly

higher] … comments by the usual Lounge Lizards, including those from the ECB

& BOE, as they continue to hawk for higher rates … well, that’s what they “say”

… let’s wait and see what they “do” … just a scant few days ago, it looked to me

like the cycle high might have been put in at the 136.70 level in USDJPY, as the

10 YR. hit 3.50% before aggressively backing off down to right above 3.0%

… since then, it’s been a straight climb up for rates, but nowhere near 3.5%, so

the weakness in USDJPY somewhat surprising … and it tells you a lot about how

the YEN market feels about the BOJ’s “bluff” of “not gonna ever back off YCC”

… wanna make a bet?

Right now, USDJPY has a 20 Day Range MA of approximately 157 PIPS … today’s

range = approximately 123 PIPS [so far], so we’re running short about 20%

unless things pick up dramatically in the New York afternoon … most of the

session the “Trading Ratio” [TR = approximately 7 - 8.5], which indicates a very

good to excellent scalping market, and at least so far, the bid/offer spread hasn’t

been blown out, but has remained right around 0.3 - 0.5 PIPS … one of the

“problems” we’ve been facing lately in FX, is the growing syndrome of “lightning,

speed of light … crickets” in terms of trading action … today that’s EXACTLY

been the scenario in USDJPY … looking at the range for over 7+ hours, and a

handful of M1’s make up the vast majority of the day’s action … that usually

means somebody puked and puked hard in size, and when it’s done, the market

goes right back to “chop” … in other words, we get “TIME” corrective activity in

the market, but we’re not getting the proper “PRICE” corrective activity, and

today we see that in spades!

USDJPY has just backed off about 65 PIPS from the high, and it’s pretty much all

due to the 10 YR. rate going lower, now down to around 3.1% … somebody tried

to muscle it higher still, in the face of the falling 10 YR. rate, but it never turned

around, and that buyer has appeared to puke … this is a “theme” I can see getting

played out repeatedly over the next months, up & until the inflation numbers come

out and then we’ll see … if inflation doesn’t back off and start coming in UNDER

consensus pretty “Hoover Dam” soon, USDJPY has got a lot farther to go on the

upside before SHTF and “Thelma & Louise” show up.

Multiple algorithm buy signals today in USDJPY … TURNKEY PAMM UP

SLIGHTLY … volumes will increase here shortly, after the 4th Holiday on Monday

… Q2 and month end flows are keeping me at lower volumes, simply cuz they are

unpredictable and sometimes nasty … they haven’t been so far, as things have

been relatively orderly, but the m1 spikes from Hell [we had one earlier today] can

come any second when quarterly & monthly flows are involved … for all of our

trades today, we had excellent pricing & latency, so good job Turnkey LP’s.

Onto tomorrow … outta here … “The future’s so bright I need 2 pairs of

sunglasses 😎😎, and my own Brinks armored truck” 💓!!

… Onward & Upward!!

-vegas

DID NOBODY TELL TUESDAY IT’S NOT MONDAY?

 

“Why can’t FX ever behave!?”

If the first half of today’s European session was any more dead, a van would

come and take it to the morgue … seriously, I know it’s summer and everything,

but still … so about 6:30 AM EST, I switched back over to USDJPY, cuz I can’t

take watching EURUSD go up and down half a PIP over and over again for what

like seems forever … for cryin’ out loud, move SOMEWHERE! 

And while USDJPY is acting better than I anticipated from the weekend, it has

since died as well as the New York session starts … NOON in New York, and

USDJPY has got about a 30 PIP-ish range since I switched over 5 ½ + hours

ago … again with a somewhat dead market in the fact it can’t move anywhere

… how can a market correct if it doesn’t move somewhere first? … it’s nothing

but a “Flying Wedge of Death” [FWD] with trips to both sides consistently, and

that only means “coin flip” trades which aren’t statistically significant.

I thought USDJPY would be quieting down, and maybe at some point it will, but

it isn’t now, while EURUSD continues to disappoint … so, back to USDJPY until

it does slow down over a period of some consequence, not just a day or two

… my mistake in thinking it has run it’s volatility course … no trades today cuz

nothing to do within tiny ranges, first with EURUSD, then with USDJPY not doing

anything after about 6:30 AM EST … onto tomorrow.

… outta here … “The future’s so bright I need 2 pairs of sunglasses 😎😎, and my

own Brinks armored truck” 💓!! … Onward & Upward!!

-vegas

MONDAY … NOBODY CARES

 

“Welcome to FX Monday!”

Calling this “pathetic” would be an insult to language … going on 4+ hours from

the European open, and EURUSD has got a 20 PIP range from the tips … much

worse than that if you’re looking at the action … “Flying Wedge of Death” [FWD]

much? … sun coming up in New York, and it doesn’t look & feel like anybody

cares … all you can do is laugh, otherwise you’d be crying.

One move down and one move up at the London Fix, just to screw with buy stops

… other than that, another Monday of some of the worst trading action you’ll ever

see for a non Holiday … literally trapped between about 60 to 80 the entire day in

EURUSD, and the other 2 not much better … and if you think I’m entering trades

inside a 20 something PIP “Flying Wedge of Death” [FWD] over 8+ hours, think

again … it’s not any of the small winners, it’s the moves out of the range that kill

accounts and traders cuz you can’t make the loss back … and once they tag you

with that loss, Bingo!, Bango!, Boom!, here comes the reversal at the speed of

light that will piss you off to no end … hop on that, and it stops and retraces, and

now how do you make anything back? … and that’s the problem with these rinky

dinky ranges, and banks screwing order flow … you simply can’t get anything

going without taking a ton of risk, and once you go down that road they got

you! … maybe not today, but a day coming up!

Sure, the 15s gave off signals in EURUSD, tons of ‘em … so what? … they gave

off a ton of “false positives” as well … so if you got mixed up in this clusterfark

of a trading day, what have you gained for the risk? … heartburn is what you

gained … the daily candlestick chart looking like a pencil smudge … nothing to

do but realize that lately, both Mondays & Fridays are bags of shit for trading

… small ranges, terrible European session trading action, and generally no

interest in anything RE FX … why should this Monday be any different?

This day simply a waste … nothing more and nothing less … onto tomorrow,

and hopefully EURUSD can move somewhere … no trades today in anything cuz

there is nothing to do inside a 20-ish PIP FWD for the vast majority of the day

… nice of the banks to screw buy stops literally right before the London Fix

… coincidence I’m sure, right? … yea, go with that … and 2 hours later we’re

only a handful of PIPS away from where we were before the stops got hit … now

into the New York afternoon, and this day is over … ughhhh!, put a fork in it, it’s

dead! 

… outta here … “The future’s so bright I need 2 pairs of sunglasses 😎😎, and

my own Brinks armored truck” 💓!! … Onward & Upward!!

-vegas

SUNDAY UPDATE: CRATERING ECONOMIES TO SAVE YEN

 

“Yes, my bullshit is this high! … save us or you go down too!!”

20 Day Range MA’s of selected pairs directly below.

click on table to enlarge

While I don’t think USDJPY is going to plummet back to earth as the FED reaches

the limits of their hiking rates, neither do I think USDJPY is going to go skyward

still more … without higher rate differentials between the 10 YR. of the Treasury

versus JGB’s, what’s going to propel ever greater USDJPY levels? … “risk off”

will only drop rates farther … and much like the Trump “reflation” trade in 2016,

where USDJPY went from the 104 level up to 118 in a matter of a few weeks, and

then spent the next 4 years going down slowly, we could be in a similar situation

now with USDJPY. 

Quite frankly, if I’m only partially right it’s gonna make for some very tough

USDJPY trading going forward … reversals, double reversals, and most likely

smaller daily ranges than we’re seeing now … and that also spells trouble for

GBPJPY & EURJPY, unless the numerator pairs can pick up the slack … given

the proclivities of both the ECB & BOE, which are nothing more than a large

collection of political hack “fuck ups”, who couldn’t sell ice cream at the beach

and make money on the hottest day of the year, don’t look to them to make any

sense whatsoever in terms of policy execution … always a “day late and a dollar

short”, fighting the last war, a basket of retarded kittens on meth would better

run monetary policy than these Asshats … that might “shake up” the

numerators some, but crosses get much better movements when the

denominator moves, and if the YEN is “chop city”, the crosses will become a

“traders graveyard”, as the trend following crowd gets mauled and eaten up in

the FX meat grinder.

And as Friday’s trading action showed if you were watching it closely, USDJPY

was a literal nightmare of spikes both up & down with ZERO follow through that

mattered … then in the New York afternoon, simply cuz they can, scumbag Wall

Street banks run buy stops before “Thelma & Louise” show up, and it’s the all

too typical “kill shorts, get some specs long on buy signals, then kill longs”,

WTF just happened on a Friday afternoon? … and as I have warned repeatedly,

“scumbaggery & fuckery” goes orbital when afternoons roll around in New York,

Europe closed, and all that’s left are the criminals at JPM, Squid, and the other

virus horde usual suspects, and you might as well have a big red circle on your

back … New York afternoon hunting season is ALWAYS in full swing!

We all know, and have for years, that Japan is a monetary “basket case” … but

the E.U. & Britain ain’t exactly paragons of monetary virtue either … both have

“bigly & yuge” problems, not the least of which are totally stagnant economies,

governments run by Elitist out-of-touch Twits, and in the case of the E.U.,

complete “fragmentation” in the bond market between the “haves” [Germany,

France] and the “have not PIGS” [Portugal, Italy, Greece, & Spain] … and quite

frankly, the ECB is a bankrupt institution, holding utterly worthless “bond paper”

from the PIGS in the hundreds of Billions of Euros, with LESS THAN ZERO

chances of ever seeing any of it get repaid, other than with new borrowing … and

if you’re wondering why EURUSD can’t get any “traction” to the upside and put in

some multiple daily / weekly “bull runs”, this is the reason … however, like all

dark clouds on the horizon, for traders EURUSD can make a lot of sense to trade

if given the “right” trading conditions … and they are 1) super razor thin bid/offer

spread, 2) super low or NO commissions, 3) a super fast [latency] execution

platform, and 4) ability to chart and run indicators on SUB 1 MINUTE TIME

PERIODS … fortunately for the PAMM, we have all 4.

Generally speaking, I tend to round off “total costs to trade” when calculating

the “Trading Ratio” [TR] … for dollar FX pairs [a couple of crosses] that usually

is very close to 1 PIP … EURUSD is the exception to this, as the spread at

Turnkey is usually in the 0.0 - 0.2 or maybe 0.3 for most of the day … I haven’t

experienced any slippage at all on the platform the PAMM is on now, so if the

“total cost” is under 1 PIP, that means the TR becomes easier to get higher

values … and higher values means it’s a great market to trade … don’t get me

wrong here, there are times when EURUSD can be as bad or worse than USDJPY

in terms of spikes from Hell, both up & down, but lately you’d be hard pressed

to argue anything but the fact that YEN is becoming a “spike nightmare” … and

has also been the case, the bid/offer spread in USDJPY has increased to the

point where it’s about equal to GBPUSD … that means TRIPLE THE COST TO

TRADE … granted, EURUSD has slightly less VIX than either Cable or YEN lately,

but that VIX comes at a very heavy price … given what I see for USDJPY going

forward, now that the markets are definitely sensing a “FED fold” on hiking rates,

and the futures markets are already sensing Q3 - Q4 2022 for rates to go LOWER,

USDJPY isn’t gonna be the “slam dunk higher” rocket ride it’s been in the

March - early June panic we’ve just been through … Japan being the basket

case it is, USDJPY ain’t gonna be going over the cliff lower either, unless the

U.S. goes into a complete economic depression … and that means very choppy

trading … well, if it’s “CHOP” going forward, then the market to be in isn’t

USDJPY, but rather EURUSD … MUCH BETTER LOGISTICAL TRADING

CONDITIONS … so, onto EURUSD as we start the trading week tonight in the

Asian session.

Version 2.1 of the trading algorithm is up and posted over in “DOWNLOAD

LINKS” … the updated version is on page 9 & page 14 … if you’ve already read

the algorithm, simply read the updates online … they aren’t very long and it

takes only a minute or two … onto the week!    

… outta here … “The future’s so bright I need 2 pairs of sunglasses 😎😎, and

my own Brinks armored truck” 💓!! … Onward & Upward!!

-vegas