SET YOUR MANIPULATION STUN GUNS TO “WHOA”!

“Dude … like Whoa! … WTF is goin’ on man?”

“Suck everybody in, then kill ‘em … rinse, repeat … mission accomplished.” This seems to be the current “mantra” every market faces [except of course the Dow30 & SP500, which have their very own “manipulative mantra” of only being allowed to go up], and explains the worst trading conditions I’ve ever seen in the trading business … “the Golden Rule firmly in place”.

And that rule is simple: “them that has the gold makes the rules”. Doesn’t matter the market, if you got the money to shove it around, you’re going to … why? … cuz the central bankers encourage large TBTF banks [think JPM, Citi, Squid, etc.] to “run the show” with no ramifications for criminal behavior … if they get caught, they offer up some “sacrificial lamb” from a junior trading desk, get fined “paper clip” money, biz as usual is preserved and protected, and go hire the next sap for the next future fall from grace; all the while the “connected” folks behind the curtain remain firmly in place with their “shocked” denials. Pick the market; gold, silver, oil, grains, FX, and the lesser stock indices in Europe, it makes no difference, cuz they are all being actively manipulated by the large banks trading desks.

Am I the only one to notice, that outside the machinations of the Dow30 & SP500, there isn’t … and hasn’t been for a while … any market that has “legs” for either bulls or bears? If there is, name one, cuz I don’t see it … certainly in the other major markets there is only one thing present … “CHOP”, and plenty of it … which begs another question, “who benefits from chop”? EASY PEEZEE Skippy, the damn TBTF banks, which just happen to be out friends the LP’s [Liquidity Providers]. If you’re a gold trader, or grains trader, energy trader, throw in livestock as well, I don’t know how you make a living trading these markets; you risk tons and receive ounces. What sense does this make?

Which begs the question; “Is American “big money”, having been slapped around by the central bank manipulators who won’t let them have their way with stops and other chicanery in the Dow30 & SP500, moved their money offshore and are now at play in markets like the DAX30”? Cuz seriously, how much would it take to shove the DAX30 up 50 points or so, fill the buy stops by selling everything you can get your hands on, and then run it the other way into sell stops later? Would $100 million do the trick? Based on volume & open interest figures from EUREX, for the DAX30 futures contract, I’d have to say “yes” it can be done, and rather easily. EXIT QUESTION: “If it could be determined it was being done, would the German regulators do anything about it, or simply take the usual money under the table to STFU and go watch porn on their office computers”? Cuz with the entire world on fire, markets should be jumping up/down everywhere … and they most definitely are not … volatility in almost everything at the lower boundaries of sanity.

As most all of you know, I’m working on the “Version 4 Volatility Algorithm”, and spending most of my free time over the weekend working on it; it’s voluminous and packed full of examples … by no means is the “Quick Guide” the whole “enchilada” … which got me to thinking Saturday night as I’m feeding the “Ice Cream King” his daily allotment of about a pound of soft serve vanilla from DQ [made with yogurt so it’s “healthy” … yea, right.] … why not break up the manual for the 3 markets into their own individual manuals specific to that market? This way, you can read the one [or all] you’re interested in, and don’t have to slog through the rest for nothing.

So, after thinking about it yesterday, I’ve decided to do it that way cuz it makes the most sense, and each manual can focus on that particular market with rules and examples. Having said that, the first one due here shortly will be the DAX30 manual, followed by the “Anti-DAX30” [a/k/a EURJPY], and then the Dow30.

Turning to today’s markets … Dow30 slightly higher, so what else is new? … the DAX30 on a “yo-yo”, hammering people unmercifully on either side of 12300 & 12100 for the last few weeks, and EURJPY not doing much of anything after Friday’s sell stop bloodbath in EURUSD. What concerns me now, with the entire trading world totally oblivious, asleep at the switch, and basically unconcerned is the Dow30 and what will [not if] happen to other markets when the proverbial rug is pulled out from underneath price and way too many people hit the “exit gate” at the same time … don’t kid yourself, it’s gonna happen, and the $64,000 question is how does the DAX30 react? … what about EURJPY? … and more importantly, where’s the bottom for the stop selling, and is it confined to one wave or are there more after the first wave? “Right now, with things awfully quiet [too quiet], if you get this “wrong”, you gonna have a severe case of butthurt”!

About 90 minutes into this total clusterfark Monday, and we got the DAX30 going in the same direction as EURJPY, with the same “fun & games” you’d expect via stop hunts that go nowhere. EURJPY with a very small range, the DAX30 with a moderate range based on the weekly numbers, however the DAX30 trading like a psychotic teenager; and what I mean by that are the spikes [up & down] that come out of nowhere … take stops out … and then turn around with a vengeance the other way and do it to the other side … then it’s back to the middle … sound familiar, cuz outside of a day or two these last weeks, that’s all we are being fed for the moment. The Dow30 for its part? Sick and getting sicker by the day … really unbelievable what is happening to U.S. markets, cuz they are being starved to death. Is the VIX at 3 yet?

You want to see what the future holds for U.S. markets, if the idiot Twits at the FED don’t stop the manipulations and let this stuff breath? Directly below the WEEKLY ... YES, WEEKLY chart of the Nikkei 225; take a look at “now” versus the past. The BOJ now owns over 50% of all shares outstanding in Japan … you think they are going to suddenly “let go”?

“This is what you get with blatant, overt, & systemic manipulation!”

And now that Europe is closing in the DAX30 cash market, here at 11:30, throw in a small stop hunt on the upside for “giggles” … and the beat goes on, with reversals, “Flying Wedges of Death” [FWD], doji’s, and general “Golden Rule” trading. Where do I sign up to get a piece of this action? Oh, and in case nobody noticed, gold [XAUUSD] has an approximate $3.30 range today. Wait … what? That’s right, the central planners have absolutely ruined the gold market to a complete shell of its former trading self; 5 years ago COMEX futures in gold traded upwards of 500,000 contracts a day, with some days seeing spikes up to and exceeding a million contracts. Today? Try 100,000 and change … this is what happens when markets are manipulated. So, is the world a better place thanks to the manipulators?

Here in mid-afternoon, and ranges in pretty much everything except the DAX30, on the very tight side; and what that means, is that any little squiggle can set stops off as we attempt to go either to a high or a low … and it’s a total crapshoot as to whether it can go through … we’ve made several attempts at both the high and low in EURJPY, the market holding a very tight 20 – 25 PIP range since the European open 7 – 8 hours ago. As for the U.S. markets, let me just say that the SP500 had bigger index point ranges when it was trading in the 200’s, some 30 years ago, than it does today 12X higher in price!! … if that doesn’t convince you how pitiful things have become, nothing ever will.

For those of you “new” to financial trading; I’m talking about less than 5 – 7 years of trading experience, and no just because you hear the DJIA closing bell price on the radio doesn’t make you a trader with experience. But for those lacking in trading experience, it’s difficult some days for me to express the financial trading scene from my eyes to you; it’s difficult to translate just how BAD trading conditions have deteriorated into from as little as 2 years ago. Remember that weekly chart above from Japan? Go ask anybody who still attempts to trade the Nikkei 222 how it’s going … if you can find anybody, that is. There is no point in trading a market that won’t / can’t move, but I can predict with confidence how it ends, and whenever that date in the future is, hide the kids cuz it won’t be pretty. And then suddenly everybody wakes up and asks the same question; “how come I didn’t sell when I had the chance”? Cuz what it’s goin’ to boil down to, is one of my axioms of trading you can take to the bank and deposit; “he who panics first gets to panic again later”!

With an hour to go to the close … and I’ll never get this exciting hour back in my life … there isn’t anything to do but simply wait; none of the 3 markets really did anything, although the DAX30 put in a somewhat normal range at about 115 points. When it was rallying to the high, I kept waiting for EURJPY to break [it didn’t]; when it started making new lows, I kept waiting for EURJPY to rally [it didn’t] … and what all of this told me was, there’s a very high probability nothing is going to last; not up or down, cuz when you got a day that sees EURJPY have only a 20 – 25 PIP range, it literally means everything is on a raft out on the ocean drifting. Over the last couple of weeks, the DAX30 has gone nowhere … we’re gonna close today at almost the exact same price as on July 24^th … since then, it’s been nothing but a very nasty trap to any trader holding any position for longer than about 10 minutes … as I said before, FWD’s, doji’s, reversals, stop hunts up and down at the speed of light, and yet, where are we? I’ll tell you where we’re at; “we’re at the corner of “screw you” & “thanks for donating Chump” if you’ve been actively trading the DAX30 looking for any breakout. Every day is a treacherous reversal at the speed of light … sometimes two, three, or even four trips in the FWD before it’s over … in other words, nothing can be sustained that anybody can hang their hat on for a position, with any degree of confidence greater than a coin flip. Sure, the algorithm has had a couple of scalps that could have gotten us a few points today … if I was quick, got good prices & suffered no significant slippage … on the other side is much higher risk, an LP that wants to hand out slippage, and a market that wants you to buy on the way up and sell on the way down to feed the system its meat … sorry, we ain’t gonna do that Mr. Market”.

Just a few minutes to the close, and I honestly can’t remember a worse trading day spread over all markets.  No trades today, obviously, and all I [we] can do is wait for tomorrow. Onward & Upward!

PAMM spreadsheet directly below.

“I gave the market a few minutes … here’s my response!”

Well, now that the dog is up … we’re outta here to the beach … until tomorrow.

Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

DAX30 SUNDAY UPDATE: WEEK OF 8/7/2017

DAX30 data above, first in graphic form [blue line = 20 day MA; red line = 20 day median], then in tabular form. As you can see, quite a difference day-to-day last week; some big moving days, some dead days.

I’m a little concerned about the “trading action” in the DAX30; I’m left wondering if big money traders that have been stung by the manipulators, have found their way to the DAX30; some of these spikes [up and down] make no sense other than running stops cuz they can; can’t do that anymore in the Dow30 & SP500 cuz the manipulators are there with their bids firmly in place. I don’t know if I’m right … hope not … but it’s something I’m keeping my eye on, cuz there were days last week that were just plain off the charts nuts with the stop hunts.

I’ve done some work over the weekend in the “Anti DAX30” stock index [a/k/a EURJPY] AND I’LL SHARE THAT ANALYSIS at the end of the week when I’m done. Remember, the “Quick Guide” is simply that, and use it for the DAX30, not for EURJPY; the “Anti DAX30” is a whole different kettle of fish, with full details when the manual is finished and released. Until tomorrow mi amigos!

Have a great rest of your weekend everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

FX BULLS GET CRUSHED

“A synopsis of FX through the day!”

Well, that escalated quickly didn’t it … amazing what 26,000 part time, excess over consensus, jobs can do to a $7 trillion dollar a day FX market when “the trade” is caught flat-footed the wrong way and traders hit the exit gates at the same time.

Nonetheless, the DAX30 today never going below the M1 “Kumo Cloud” from the time of the NFP report until 13 minutes before the close of cash trading; an almost full  3 hours … unbelievable really, especially for a market that has been so adept at running stops on both sides lately.

The Dow30 & SP500 are nothing less than a trading joke at the moment . Today of all days, where FX and everything else is flying around and putting in some big moves, these two simply sit … no up, no down, and from about 20 minutes after the open in New York, you’re lucky if you can get the Dow30 outside of the spread … and then BOOM!! Down 30 points in 1 minute, and then manipulators come in and it’s been a manipulative drift up since then … totally pathetic … things need to change here if the FED’s want this market to stay alive, cuz the way things are going, these 2 equity markets are losing traders to foreign markets because they won’t trade … there’s only risk, with no reward, and who’s gonna accept that?

Turning to the “Anti-DAX30” market [a/k/a EURJPY], what a stop run that saw the EURUSD get creamed, and USDJPY skyrocket, and of course saw EURJPY go down. Two charts below of the action from approximately 9:00 A.M. NY time [13:00 server time] to about 15:00 for chart 1, and the second chart goes from about 15:00 to roughly 16:30. These 3 ½ hours basically condensed the entire day thanks to the NFP … trading up to then had been dormant. Take a close look at each chart and the commentary inside.

Taking a look at 1) the time underneath the “Kumo Cloud” [one boxed number to the next], i.e., the start and end of the move high to low, 2) the price move differentials between high and low, and 3) starting over @ 1 when the market peeked for a minute above the “Kumo Cloud” and then started the process all over again. These are the 3 areas I want to concentrate on in EURJPY. Directly below, the boxed numbers of time moves, and numbers of lengths of the moves in price, on both charts in black circles on Gann’s ‘Square of Nine’ so you can see how they line up from today’s heaviest action.

My point in bringing this to you is to show you the power of the version 4 algorithm, which is predicated on Gann’s ‘Square of Nine”, and the fact that the cloud does a very good job of modeling the probability of time spent over or under the “Kumo Cloud”, and once you’ve done that, taking the starting points of each move and mapping price to see the overall fit. The good news, is that the algo is all “visual”, so unless you want to, there isn’t any need for number crunching in real time; simply watch the screen.

Today, I messed up in the “Anti-DAX30” and my first trade got me in too early; granted, it was off the lower SDEV line [which is a buy], but I got my stop run on the heavy EURUSD sell stops … for a second or two it looked great, and then plummeted quickly. My second trade should have been my first, and although if I had gotten in a second quicker I would have received a much better fill, it was still a profitable trade. Overall, though, cuz of the first one, collectively we lost about $125, which isn’t terrible, but I should’ve known better. Blame this first loss on me, not the algorithm, cuz it wasn’t the algo’s fault. In my defense, the very tiny break of the Dow30, and then subsequent rally, I thought meant the EURUSD selling was over … it wasn’t, there was one more down leg to go, however brief, but that was enough when panic is in the air. In any event, just sayin’.

The DAX30 was disappointing today because there were zero signals to get long … a few times it came within about 5 -7 points, but that evaporated quickly as the EURUSD got slaughtered and the market rallied. As for the Dow30 & SP500, I’m simply at a loss to explain the total pathetic trading action in either market. It just doesn’t move … simple as that. All we get in the Dow30 is “vapors” during the night, and then “protect & defend” during the New York session; today was no different, even with the NFP. If I didn’t know better, I’d say nobody in the Dow30 cared about whatever jobs number came out … it could be anything, and they wouldn’t care … it just lurches higher … dies for a while … then lurches higher again … rinse, repeat, see ya later. And it’s been like that for months, as the manipulators will not let up in their determination to never let stock prices go lower again. And if you think I’ve got just a touch of hyperbole in this, I’ve got a chart to show you different.

And to make matters worse, this is the 12^th day in a row the SP500 has not moved 0.50% from the high to the low of the entire 12 days! In the 90 year history of the SP500, going back to 1927, when it came into existence, the market has never seen this … ever. So yea, tell me again this stuff isn’t being overtly manipulated and a free market exists.

Here in late afternoon, just doing some looking at EURJPY, and the last move of the day directly below with commentary. I mean, seriously, how good is the “Kumo Cloud” along with the ‘Square of Nine’? Can’t wait for next week, cuz if the traditional stock indices don’t get their donkeys in gear, the “Anti-DAX30” [a/k/a EURJPY] will be a killer for us. Onward & Upward!

PAMM Spreadsheet directly below.

Time for the beach … the dog and I are out the door … until Monday mi amigos!

Have a great weekend everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

A TALE OF TWO CITIES

“When you think your screen is lying, check your phone trading app!”

A little over 150 years ago [1859 to be exact], Charles Dickens penned, “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

This is, of course, the opening sentences in Dickens classic novel of the French Revolution, “A Tale of Two Cities”. Read those sentences above again, and think 1) the manipulative FED, 2) the “Plunge Protection Team”, 3) the sycophant MSM, and 4) the state of markets the world over, but especially the contrast between the DAX30 and the Dow30. Not a pretty picture, is it?

And so, what we are left with in this current political, social, and financial environment of deceit, treachery, despair, hope, and profit, are the “Tale of Two Markets”. One is like Paris, 1797, and the other London; the DAX30 becoming like Paris, and the Dow30 the staid, prim & proper, London. Trading action in these 2 cannot be any more divergent than right now, one being a meth addicted teenager on cocaine, and the other Grandma at the nursing home.

And while we all know Grandma’s routine, the teenager presents us with a daily dose of “random nuttiness” that comes with the territory, today being no exception. Here we are right up against the New York open, and you want to talk about the “Flying Wedge of Death” [FWD] rearing its ugly head again … man-o-man is today a classic FWD screw job of pure pain … how many new lows and new highs are we in for Mr. Market? … and the sad part of this is, once positioned incorrectly on the wrong side, this puppy ain’t lettin’ nobody out unless they pay up on the spike, whether that be up or down. And as I have tried to tell people for what seems like eons, with FWD’s the emotions, losses, and catastrophic decision making only compounds itself as the day wears on, cuz once you get caught on the “yo-yo” that big money has you trapped on, the intensity of the losses exponentiates … at the end of the day, you look up and see not much has happened, and you are almost bankrupt. I’ve seen so many people go through this, if I had a nickel for every time, I’d probably have 10 Grand in the bank, it’s so pervasive. And while I have tried to educate people forever, they still want to believe that “something” simply MUST give way, and that the market will explode one way or the other. NEWS FLASH: “No, it doesn’t have to do anything you want or desire … NADA”!

Today, at mid-morning, the DAX30 has gone to the highs or made new highs, 4 times, and it’s gone to the lows 3 times, all inside about 60 points … get “yo-yoed” in this clusterfark, and it’s got the potential for lights out. And as I have said before, these type of FWD’s, doji’s, and low range days tend to cluster … and then they go away for years … you usually don’t see them on a regular schedule, but clustered around Holiday’s [Monday or Friday], central bank interest rate decision days, NFP Friday’s [like tomorrow], and political events [like elections and referendums], if they come at all.

An hour into this mess, and believe me it’s a mess, the Dow30 & SP500 continue to not want to break at all, just meandering here with small gains but refusing to go down anything of substance. It looks as though the central banks are supporting it again for the 9^th day in a row; never mind all the assumptions for sustaining higher stock prices at all-time record highs is delusional. We got no health care, no tax cuts, nada on any domestic agenda like infrastructure, a nuclear toxic political crowd bordering on paranoia and literal hate, and an intelligence community that is hellbent on war with Russia and/or North Korea. What could possibly go wrong? Well, according to the FED nothing!

One of the meanest DAX30 days I’ve seen in a long while … it was nothing but vicious spikes up … a couple of minutes [literally] of sideways action … then vicious spikes down … rinse & repeat the whole day … I am glad I left it alone, cuz I’m not sure I would have come out the other end with any profit at all. I’m left wondering if the “rats” infecting U.S. stock indices had anything to do with the DAX30 action today? OMG, I hope not.

Here in the early afternoon, the Dow30 would be better off closed … most likely it would help anybody attempting to trade the index as well, cuz from what I’m lookin’ at, this market is sick … once New York opens, it can’t rally and it can’t break … consider the spread and RT commissions, and for the risk you take, you are getting zero in return. This is a trading disaster.

Yesterday I mentioned EURJPY as an alternative to the DAX30 & Dow30, and replacing the SP500 … most of the time it correlates inversely with the DAX30, but sometimes for short periods they can move together. Broadly speaking, though, if EURJPY goes up, the DAX30 has a tendency to go down, especially if the cross is being moved by the Euro [which it is now]. As we see yet again today, both the Dow30 & SP500 are untradeable … it’s either 100 higher on the open from “vapors”, or it’s dead and basically unchanged going into New York trading … there isn’t anything else, and the New York session has become nothing short of a total “protect & defend” operation for the manipulators. When trading opens, 5-10 minutes later, you will be lucky to see ± 20 points in the Dow30 up to 3 hours later, with nothing but endless drift and dead-end trading conditions … today is no different. So yes, I’m dropping the SP500 and adding EURJPY as a “quasi stock index” … basically the “Anti Dax30 Index” if you will.

Now, I don’t need anybody to remind me that technically EURJPY is an FX cross, and that most of FX trading is a disaster, and probably will stay that way … I know that … what I also know is that the EURUSD has awoken from its 3-4 year slumber and looks set to actually go back to some kind of trading; for the last 3-4 years, while the DAX30 has gone up approximately 50%, even with the Greek crisis thrown in there for good measure, the EURUSD has basically been a “dead” trading instrument … in other words, the DAX30 got a “free pass” … now with more movement in the last 6 – 8 weeks than its seen in 3 years, it’s not gonna be the “free ride” it was before; now, the stock indices market has to pay attention to FX.

For a very long time I’ve traded EURJPY, since at least the start of around 2000 – 2001, when it first came on to electronic platforms like MT4, with a “tight spread” of 3 – 4 PIPS [yes, I know it’s ridiculous … but back then it was standard]. Now, at Turnkey we can trade this with a 0 – 0.003 spread with $2 per 100,000 notional dollar amount RT commission, which makes our “net” trade cost just about 0.004 PIPS … that’s less than a half a PIP, and the way this stuff trades, that is an awesome advantage we have over others.

From all of my research and studies over the years, and as recently as last year, I’ve always treated USDJPY & EURJPY [for research purposes] as NOT simply FX, but more along the lines of “asset classes” unto themselves, and placed them for “cycle research” right along with the stock indices. Of course, the main problem with stock indices, is that up until this year the cost structure was ridiculous, not anywhere close to the spreads we enjoy with Turnkey. However, when doing Gann research, and modeling my own theories regarding cycles and how the market trades, these 2 FX pairs have always been considered by me as “stock indices” more than anything else.

In the past, I considered USDJPY as a good trading pair; however, the main problem with USDJPY is that it goes into hibernation for 6 – 9 months at a stretch and doesn’t do Mr. Jack Squat. If you are attempting to make a living from trading, this isn’t gonna “fly” with your wallet and a “trader lifestyle”. Oh too be sure, if USDJPY had a guaranteed range every day of 100+ PIPS, I would park my donkey there and never leave … but it doesn’t, and it won’t, and it will frustrate the living crap out of you. The EURJPY cross, with an active and somewhat volatile EURUSD numerator, and even a somewhat slow USDJPY denominator, still produces good ranges and decent volatility … let them get active and volatile together, and you will think you’ve died and gone to trader heaven, the conditions are soooooooooo good. Right now, it looks and feels to me, like we have a very long stretch of volatility in at least EURUSD going forward … and any pick up in USDJPY is like frosting on the proverbial cupcake.

Ok, so I’m treating EURJPY like a stock index … great, what does that mean exactly? First off, it means all of the cyclical indicators via the complex math I use are patterned off of Gann’s ‘Square of Nine’ that I use for the DAX30 in the version 4 algorithm. Simply using the “Kumo Cloud” in the Ichimoku indicator gives me the math code I need and therefore don’t have to “reinvent the wheel”. The values that are found in the “Quick Guide” are all Cardinal Cross numbers on the 90⁰ ‘Square of Nine’, layered in succession on top of each other, and are the values for the “Kumo Cloud”.

Today’s trading is nothing more than “wait for tomorrow’s” NFP report; there isn’t a thing going on anywhere [except EURJPY] in the stock indices that warrants any trading at all. Very early today, after watching and observing the first low, then trip to the high, then new low, then almost a new high in the DAX30 and decided, “well, I need the FWD like I need a hole in my head, and said ‘no mas’ to Mr. Market”, I decided it would be beneficial for most of you to see a day’s analysis of EURJPY. Directly below is the M5 of EURJPY for about an 8 hour period, during its busiest time of the day. Directly below that chart is a table of the values superimposed onto the chart for analysis purposes in a Microsoft Excel spreadsheet [in the spreadsheet, CC is “Cardinal Cross” (red lines) on the ‘Square of Nine’, and DC is the “Diagonal Cross” (blue lines) on the ‘Square of Nine’]. And directly below that is Gann’s ‘Square of Nine’ with the black circled squares the values of the times of the moves [# of M5 periods closest to the center], and the outer black circled squares the prices of the moves.

If you haven’t noticed, all of the black circles are either on or cluster very close to either the CC or DC red and blue lines, respectively, on the ‘Square of Nine’ … these cell numbers were considered by Gann to be the most important in determining both times and prices of swing highs and lows in a market, and you can see from today just how damn accurate they are. The mistake, though, that people make is in trying to “project” the ‘Square of Nine’ into the future by trying to say, “well, the last 2 M5 number of time periods between the high and low were 17 and 34, therefore the next one will be 34 also” … wrong … why can’t it be any cell number on the CC and/or DC?

Its value is looking back to prove to you cycles are at work in a dynamic environment influenced by probability theory; therefore, by utilizing the “Kumo Cloud” cuz it has the math I want, I can create the conditions necessary for a dynamic probability model that moves with the market; add in the SDEV lines for exhaustion in the “bell curve” of normal distribution for all conditions[more on this for the M5 below], and you got the version 4 algo. If you go back up to the chart, you’ll notice all the highs came when the “Cloud” was sandy brown [rising], and all the lows came when the “Cloud” was aqua [falling]; this is exactly what you should expect, and the “Cloud” will be its “DEEPEST” at these extremes … so, when you see the “Cloud” in real time get bigger and bigger, and then you get a spike that corresponds very closely with a CC or DC cell number in terms of time for the move, you tell me what you’re gonna do?

For conservative traders, you can initiate positions utilizing the “Kumo Cloud” breakouts via the M5 with an “envelopes” deviations field of 0.19; since August 1, there have been 9 SDEV line hits, with each time the market backing off from the high or low when hit. For more aggressive traders, use the M1 “Kumo Cloud” and an “envelopes” deviation field of 0.13. In both instances, whether M1 or M5, use tight stops and try and let the winners run … in any event, use spikes up to liquidate longs, and spikes down to liquidate shorts, and don’t worry what happens next … simply wait for the next “Kumo Cloud Cycle” to show up.

It is important to remember that both M1 & M5 “Kumo Clouds” operate on the Ichimoku 4,15,34 parameter settings [90⁰ degree stock cycle]. It is 90⁰ where cycles have their most tension [a/k/a support and resistance in trading], therefore when the “Cloud” is breached on either side, it’s usually good for some kind of move … it may only be good for 5 PIPS, but it can also be good for 50+ PIPS … the point is, you will find yourself “UP” on the trade, and can then decide on a scalp or hold it while it runs in your profit direction. This is what is known as a “free trade” … you hold all the cards. So, EURJPY is officially in the mix, and the SP500 is out.

This afternoon, President Trump announced he’ll have “big news” for the country from tonight’s speech in West Virginia; only God knows what this means, and from that point on, trading in everything has pretty much stopped “deader” in its tracks from before. So, we’ll see tonight … tomorrow of course the NFP numbers from the Department of Unicorns & Fairy Tales, to give us the jobs numbers, and a host of other manipulated data that is totally worthless.

I didn’t do any trades today for the PAMM, simply because there were no trades to do … officially, the DAX30 had 3 trades to make, 2 would have been a toss-up for up/down, and the third would have had a small profit if you acted quickly before the opposite spike kicked in; I wanted no part of this clusterfark. And of course, the Dow30 is a complete  joke … there’s no buying, no selling, no movement of any substance since the open, and I doubt anything will change to the close. So, we simply wait for the fireworks tomorrow at 08:30 A.M. in New York for the fun and games to start in earnest. Onward & Upward!

PAMM Spreadsheet directly below.

And then I said, “let’s go to the beach and get some exercise!”

Time for the beach … the dog and I are out the door … until tomorrow.

Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

TRADING IN THE VALLEY OF DEATH

“Group photo of all the happy EURUSD & Stock Index traders!”

In the U.S. stock indices, it’s “vapors” and the outright blatant manipulation by the government via the “Plunge Protection Team” [PPT]; they come in, they back away, they hand each side [mostly shorts though] their collective donkey’s in a sling, and then walk away happy with the damage they created. In the European indices, especially the DAX30, it’s bank and large hedge funds running stops [both directions], and simply a game where the “Golden Rule” applies; what’s the “Golden Rule” Skippy? He who has the gold makes all the rules.

And so, what we are left with doesn’t make any sense to the average person who wanders in with a couple of bucks and wants to take his/her shot at the stock indices; how many times have I said this, that 1) education and life experience will betray you and lead to losses, and that “doubling up” or worse “tripling up” losing positions and then freezing like a deer in headlights is utterly foolish, 2) listening to the “news” and/or following reports on CNBC and then following consensus, will more often than not, lead you to the poor house, 3) “fun-dur-mentals” don’t mean Mr. Jack Squat and never have … ever, 4) don’t let profits in a trade turn into a loss no matter what you think, and finally and most importantly, 5) it’s the “setup” stupid and nothing more than that counts.

Add to this, the absolute need for an adequate risk/reward profile, and a battle plan that addresses SHTF, not if … but when it does, cuz at some point in anybody’s career, “The Reaper” comes for your donkey, and he ain’t lookin’ for anybody else but you on that day … so, be prepared for it.

I’ve been hearing an awful lot lately [via email & phone], from traders I’ve known for years and decades, who should know better but don’t, and think just because they’ve been around a market or group of markets for a while, that they deserve some kind of special treatment from the market and somehow should be immune from the things that can go wrong quickly … I’m hearing horror stories all over the place, of just how deadly and treacherous markets from gold to FX to stock indices have become, and what do I think is the solution for their collective problems.

As I’ve said many times, first understand your market and what is driving it, then evaluate your trading method to see if it needs changing, and finally the need to be totally honest in your approach to trading. For sure, lying to yourself and blaming bullshit moves and stop runs for heavy losses isn’t the markets fault, but your own for not recognizing the danger before you took the position.

Today, in the DAX30 I’ve seen some people literally go “kaput” … I’ve seen this before in the Dow30 and SP500, when people would convince themselves that they are right and the market is wrong and stay short until the money dried up. “Sigma” events [standard deviations] happen; it’s why they call them probabilities NOT guarantees, and you must face them and draw a “line in the sand” somewhere that simply gives you a “paper cut” and not something that takes both your legs off and leaves you for dead. Sadly, people don’t want to face reality, they much rather instead want to be stubborn and foolish in the face of oblivion. It’s only afterward, that you get the phone call and are asked, “why did I do this? … please tell me … what I was thinking”? And my reply is always the same; “you weren’t thinking, and I told you before this would happen to you, cuz in our talks before today, you laughed off the chance of ever getting caught in something and thought I was nuts … remember? Who’s nuts now”?

I said in a previous blog post how hedge funds and CTA’s [commodity trading advisors] in general are having the toughest time in 30 years; not since the great crash of ’87, have such a large group of “professionals” been “whacked” as hard as they have been this year and last; there’s are a multitude of reasons, but a lot of them have not recognized and changed their style of trading to take into account central bank manipulation.

In European markets, like the stock indices, you have to be aware of the stop runs, 50% levels in the marketplace, and effects FX might have on the index; and in an environment where there are no rules, you absolutely cannot let any position go against you where “prayer” suddenly becomes part of the trading strategy … cuz there’s one thing at play here like no other, and that is the ability of those with the most money and winning positions to “stick it” to those on the other side for MAX pain … and they do it with glee. You simply must play using your rules and not be a part of this.

Coming into the year, I was as optimistic as the rest of the professional trader community … what’s not to like? … you got President Trump coming in, and markets looked to be volatile, and most hoped for better trading conditions because of it. What markets got was more PPT and the worst collapse in volatility I have ever seen in markets since I don’t know when. It didn’t take me long to figure out that trading anything FX was a disaster, and that stock indices were the only place to be. Granted, it’s taken me a couple of months to “tweek” my algorithm to adjust to central banks in the U.S. market in the Dow30, and to adapt the algorithm to a suddenly resurgent DAX30 market in Europe [Germany], but trading is “back on track” and making money [too be sure, not as much as I’d like, but getting there], the algorithm in version 4 as “good as it gets” in pinpointing optimal trading opportunities, and volatility is picking up in the stock indices. So,, as far as I’m concerned, things look good going forward.

That doesn’t help much to those who decided to play “trader idiot” and refused to take a small loss at the beginning, instead getting “pig headed” and decide that the market is just simply wrong. NEWS FLASH; “The market is never wrong; you on the other hand”? And no matter how many times you tell people this, over all the years I’ve traded, some choose not to listen … well, the Pudding Business is hiring, so good luck; hope you follow directions there better than you did in trading.

Turning to today’s market … forget the Dow30, it’s “deadsville” … the killer today [so far] is the DAX30, where the “flying wedge of death” [FWD] has appeared once again before a killer move lower [start at high, make 2 new lows, go back to the high, and then plunge quickly over 100 points to fresh lows for the day … and then sit & play nice] … so far today, we’ve had one signal from the algorithm, and while I took it and got long, I never felt comfortable in it, and liquidated it a little while later … the setups were all wrong; the move to the 2 lows were wrong, and the move up to the high didn’t set up well either … meanwhile, everything is inside of a very tight range for the day, meaning that it doesn’t take much movement either way to start setting off “alarm bells” within the big money crowd that something is/was wrong. And if you ever want to see how “big money” trades, when they get “antsy & nervous” and start pushing buttons, look for the panic created almost everywhere. And so far today, it doesn’t matter if there was news or not, when they start changing their mind, look the hell out.

I came into the day somewhat bullish, but the utter refusal of EURUSD to back off the 1.18500 level and “correct” below 1.18000, gives no real reason for the DAX30 to sustain a rally, other than buy stops and fresh retail longs. Other than that, why? The quick rally up to the very early morning high [didn’t make a new high but came close] backed off so rapidly, the rate of the decline told me that the move up probably exhausted itself. Even if I had gotten a signal to buy, I don’t think I would have taken it. And of course, from there it was straight down to cascading lows, where I am most definitely NOT selling into a falling market … the probabilities for profit just plain suck if you do that.

And now here at the cash close, the DAX30 finally gets a “sell” signal from the algorithm … no thanks, cuz the cash market is 4 minutes from closing, and the day’s range 130 points … where’s it gonna go Skippy? So, time to move over to the Dow30 and see if that market can generate anything besides a gigantic headache.

Here in the afternoon, the Dow30 continues trading as if its mirroring “oat spreads” … no wait, oat spreads are more volatile. The “driver” today is simple: EURUSD, and it’s breaking out of its multi-year slumber and making some real noise in practically every market. It most definitely affects the DAX30 … nothing is affecting the Dow30 except the PPT, which is in the market practically every day, so it’s biz as usual for the manipulators. And judging by this afternoon’s comatose trading action, with almost no movement at all, the manipulators got things well in hand. Nothing to do but sit.

One trade only today in the DAX30, a scalp for literally pennies profit, as I was just happy to get out … when it’s not working, I don’t want to hang around and find out what happens next, as this market has a tendency lately to refuse to go in any direction for more than a couple of hours before somebody turns the lights out and the market reverses quickly. The last 10 trading days has been nothing short of reversals, FWD’s, and doji’s on the daily chart … I dunno if that’s due to indecision on the part of portfolio managers who see a rising Euro hurting profits of German companies, or the fact that it is the summer vacation season in Germany, and nobody there cares a hoot about the “German Dow30”. But again, I’ll say this for the umpteenth millionth time … “it’s about the SETUP of the trade and nothing else”!

One thing I wanted to add today, which will be in the version 4 Algorithm Manual when completed, and that isn’t in the “Quick Guide” over in the “Download Links” … simply cuz I had to draw the line somewhere and if I included everything that is important it wouldn’t be the “Quick Guide” but the manual itself … is the second trading rule for initiating a trade: “Trades can be initiated long/short from a “BREAKOUT” of price on the M5 “Kumo Cloud” … protective stops [I’m wondering if this is an oxymoron?] either placed with the order or used as a mental exit point should be no farther than the other side of the 5 minute “Kumo Cloud” … try and “hang on” for the pony ride if you can and avoid the temptation of scalping this trade … if it’s not going to work, you got about a 95%+  probability that you’ll know it within approximately 10-15 minutes. Once in it and you have profits, lock those profits in with mental stops if the market corrects past a certain point where you aren’t willing to give up any more gain. The earlier in the trading day you put this on, the more you want to see a bigger gain; use large spikes in the direction of your profit or the M1 SDEV exhaustion lines to liquidate”.

One other item before I call it a day; finally, after about 3 – 4 years of literally being in the proverbial wilderness, one specific FX cross … EURJPY … has come awake with the resurgence of the Euro [EURUSD], and along with the world’s favorite “asset class” [USDJPY], is again spreading its influence on stock indices, especially the DAX30. From March of this year forward to today, directly below the correlation between the two. First chart is the DAX30 and the second chart immediately following is EURJPY.

I’ve marked on both charts the corresponding dates of highs and lows; should it be a surprise that the DAX30 & EURJPY “inversely correlate” rather strongly? I don’t think so, and while it isn’t a “tick-for-tick” correlation [very few are], it is something to watch. At the moment, I’m about ready to drop the SP500 from my “watch & trading” list, simply cuz 1) it is so manipulated it’s ridiculous, 2) it never moves during the New York day, and 3) the spread is way too high for its movement. I haven’t made a final decision, but I’m giving strong consideration of making EURJPY the “Anti” DAX30 … since one usually goes the opposite way of the other, treating it as a “quasi stock index” is something I’m considering seriously. And why not, it’s got one of the thinnest spreads going, with approximate $2.40 RT commissions per 100,000, which makes that cost almost forgettable, it has approximately the same level of intraday volatility as the DAX30, and it’s got all the liquidity and volume you’d want in any stock index. Anyway, a consideration for now on my part, as I’m getting sick and tired of watching the U.S. indices do absolutely nothing during the day but sit and waste our time. So, we’ll see … I’ve got to run some numbers and figure out some things, but I’m giving it serious consideration. Onward and Upward!

PAMM Spreadsheet directly below.

Time for the beach … the dog and I are out the door … until tomorrow.

Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!

GROUNDHOG DAY

“Don’t trade angry!”

The alarm goes off … I get up and look out the window … yup, the ocean is still there; yup, the faithful dog is here; of course, the lovely & gracious Mrs. slumbering peacefully, and more “yup”, I turn on the computer and see the Dow30 is up 50 – 100 points on “vapors” yet again … I am trapped inside the same trading day, helpless to escape. And the manipulators continue with the “on again” / “off again” ramping of prices while nobody is around … any bets on what this day is gonna look like almost 100 higher on the New York open in 4 hours? Anybody wanna bet it won’t be a total piece of up/down garbage, with ± 15 points after the first 20 minutes or so, with mindless drifting action that could only be more pleasant if you traded while visiting the DMV for renewal. And that 15 points? Yea,, think 10 if you’re lucky.

In my dreams, all I could see was the recruiter for the circus … begging me to apply, where I could be a groomer for the “bearded lady”, a clown [which by the way, every member of my family says I am eminently qualified and would give a solid recommendation if asked], and/or shovel some unwanted products in the engineering maintenance department [is math required?].

 “Trader? … No man, we ain’t got no room for stinkin’ traders!”

But alas, I wake up in a cold sweat, rejected … cuz apparently, they need someone with higher qualifications to shovel elephant dung than a “trader”. Well, I suddenly realize down at the end of the bed sits “The Ice Cream King”, and he’s givin’ me looks and thoughts … “don’t even think about takin’ that stupid job … I need you here to service my desires in ice cream, bacon, & deli meats … got it”? … And I find myself just sittin’ there, nodding my head in agreement like a total doofus. Then I get up and see the Dow30 and again want to scream … “if a trader screams in an empty trading pit, and nobody is there, can he get a fill”? … I dunno, but I do know this: this manipulative BS is killing the U.S. financial system … you won’t hear people bitch & moan while their 401(k)’s and/or portfolios go ever higher, but when the inevitable crash comes … it will be a wailing & gnashing of teeth, and you can place the blame squarely at the feet of the FED, who by the way will look to blame anybody and everybody else they can.

Meanwhile, the U.S. financial system “melts”; losing trading, clearing, innovation, job talent, and just about everything else to overseas ventures and places; and why not, what’s in the U.S. besides the highest taxes in the world, burdensome regulations, a hostile regulatory environment, and a nuclear toxic federal government where everybody is simply an un-indicted felon for the moment. “Show me a man, and I’ll find some crime”! If things don’t improve soon, within 5 – 10 years, you won’t even recognize the landscape you’ve wandered into and wished you hadn’t.

Turning to today’s trading … if I hear this “strong earnings” BS anymore from the “talking heads”, my head is gonna explode … “how f-ing hard is it to have strong EPS, when you keep buying back your own stock and cutting the float of shares? Unless your company is literally going bankrupt, EPS must grow, despite the shit conditions for employees, and in most cases your revenues and sales figures stink. So, forgive me if I’m not a corporate America cheerleader”. When do U.S. equity markets escape from this trading nightmare of government corruption, malfeasance, and manipulation?

Meanwhile, today the DAX30 has taken on the personality of a teenager on meth … one day you can’t get an uptick to save your life, and the next [today] it’s a 100% complete reversal, where down ticks and corrections are very rare indeed … and “out-of-the-blue”, here goes the DAX30 on a 200 point romp, all the while the EURUSD is in the midst of one of its lowest daily ranges of the last few months, with a 35 PIP range [eventually about 50] “Flying Wedge of Death” [FWD], which apparently stock index traders in Germany and the EU in general think means the Euro run is over, at least for now … really? Why? The last week especially, the DAX30 has been correlating almost tick-for-tick with EURUSD, with every uptick correlating into the DAX30 going down … not today.

But as I have said repeatedly on the blog posts, stock indices have a way of making you think there is never gonna be another uptick [yesterday] on its waterfall drop below 12100, and today it makes you think there isn’t ever gonna be another down tick on its killer [to the shorts] run higher, taking out buy stops with abandon and filling them 20 – 30 points higher. And in the midst of all this, your feelings on a “yo-yo” rollercoaster.

A couple of really good algorithm signals in the DAX30 today … one thing I wanted to bring up yesterday but forgot … the reason I am now posting DAX30 “Average Daily Range for the Week” and “Average Median” on Sunday night, good for every day of the upcoming week, is that these are the most probable ranges for the upcoming Monday through Friday trading sessions. They are an important guide so you can make intelligent decisions away from the market about how likely a market may move on any given day. For example, if the weekly average is 120 and the Median is 115, that’s close enough that you know there isn’t a big outlier in the data “skewing” the data. So, when you are looking to make an algorithm trade, if the day’s range is 125, you may want a perfect setup, cuz the data says it most likely has no place to go and expand the range for the day. However, if you get the same signal and the day’s range is 65, you can figure on either a loss or good winning trade as the range expands. This is how I use the data, and for every one time you’re wrong and the market blows up 200+ points [like today], there are 20 other trading days where this calculation saved you from doing “stupid shit” and getting disappointed in the fact the day’s range couldn’t expand.

Here in early afternoon, again I don’t have words for the action in the Dow30 & SP500 it is so bad … after what used to be called a “normal opening”, both have died on the vine and are limping along comatose to the rest of the world. Even the slightest tiniest dips are being bought aggressively [10 – 20+ points], making it very difficult to be in the market with everybody else, and then fighting for some kind of decent fill on the way out. I don’t see how this can continue without a very bad ending; one that comes suddenly and without warning and hurts many a trader. As I’ve said on numerous occasions, it’s so bad in the Dow30, that the DAX30 cash market, when it’s closed in Germany [11:30 A.M. in New York], but the CFD’s still trade cuz the stocks trade OTC and/or in New York… it has more activity, larger ranges, and a tighter spread than the Dow30 when it’s open. Truly pathetic, and today is no different.

Early on, the action in the DAX30 was very chaotic … I mean, it was moving rapidly all over the place. With the market correlating closely with the EURUSD in European trading, it didn’t appear there was much of a trend that was going to develop … all previous attempts at a rally yesterday met with very tough conditions and rapid price declines … today, though, somebody got “spooked” and started pushing the buy button in earnest, cuz when we took off, the market never looked back … 2^nd day in a row, where the train left the station quickly and left most behind on the platform. But, 2 trades today in the DAX30, both scalps, as what looked good when the algo signal was given, didn’t look so hot minutes later when I had the chance to liquidate with profit. In hindsight, I should have seen the deteriorating correlation between the EURUSD & the DAX30, and when the Euro rallied and the DAX30 didn’t break, that was the overriding clue to get long and stay long … “it’s the dog … yea, I’m blaming him when I woke up from my circus dream and he’s given me smack … that’s my story and I’m stickin’ to it”!

Here in the last hour until New York closes, I’m trying to figure what the difference would be if it never opened … it’s simply a “protect & defend” operation for the manipulators anyway, so what’s the point? Outside the open, when the Chipmunks got to be fed, there isn’t any trading, any range, any movement … all it does is sit and stare at you on the screen and laugh at you for being here. Better yet, just let government price things … they’re doin’ it now, so what would the difference be if it was out in the open? Onward & Upward!

PAMM spreadsheet directly below.

“Wait … what? …  I’m supposed to get you and your date drinks? … Sure thing Ice Cream King, and Daisy, you are looking marvelous!”

No beach today, as I’m chaperoning the dog and his date above … give him an inch, and he takes a mile …  I’m so outta here … until tomorrow.

Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MANAGED MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!