THE GREAT BANZAI TRADING TREASURE HUNT

                                           A Game Of Inche

No matter how much math you use, the time spent on development, the number of Ph.D’s on your payroll, the criteria you use; any algorithm [and by default the rules you impose] will at some point go surfing through the Banzai Pipeline. It’s a game of micro inches.

I thought I had laid out completely my “game plan” in prior blogs, but as has been shown by my staff to me yesterday, I didn’t.

We first mark the weekly open [Monday] with a horizontal line that is good for the week. From that price we add/subtract $5. So, if the open is 1300, we have 1295 and 1305. If the market is in this zone we liquidate all open positions, and do not initiate any new positions.

At the start of the week, new positions are initiated when the market makes a new cross of the yellow/plum line past $6 on either side of the open price. The reason I choose this value is to give a buffer from the $5 value.

Once we get into the week, new positions are taken when the weekly range expands or when the appropriate buy/sell signal is given via the yellow/plum line cross. Up and until Asia proves to me that there is something there to watch and trade, I do not follow the market during the Asian session. In addition, the first half of the European session in gold is usually quiet, awaiting the open in New York.

Yesterday, the gold signals crossed [sell signal] right around 1383 from the 1388 open. I didn’t take the signal because it wasn’t a clean signal for me. The next sell signal came late in the day about 35 minutes from the close; too late to really do anything.

Whenever there is an algorithm involved, there will always be “grey moments” [The Ghost In The Machine] no matter where you draw the proverbial line in the sand. If you choose $5, there will be days when it breaks from $4.96; choose $6 and there will be times when it breaks from $5.90. This is one of the big reasons I have always refused to endorse an Expert Advisor [EA] for trading. And these issues aren’t only limited to price; they are just as valid in regards to time.

                                        Not A Trading Model

So, for those of you who think I’m just sitting here relaxing in the sand while the market trades, what I’m doing is simply following the algorithm as best I can. Have patience, we will get our opportunities.

One more thing I want to comment on today.

Over at Zero Hedge [ www.zerohedge.com ] we finally have confirmation that the BLS [Bureau of Lies & Statistics] made up NFP numbers in October 2012 for President Chalky Gobbels. These people are despicable.

What’s it going to take to make the Amerikan Sheeple see the “handwriting on the wall”? What does it take to make you see that your wealth is under attack and for you to get the hell out of “Dodge City” and protect yourself from these robbers and thieves? The decline and fall of the U.S. right in front of your eyes; proof every single day.

Have a great day everyone.

-vegas

P.S.

Since Sunday night, I’ve gotten a blizzard of emails in the last 48 hours. I’m going through them one at a time and if you have written me I will get to your email ASAP.

FUBAR TRADING REDUX

                    You & Mrs. Market; Can We Just All Get Along?

Not content with getting hit in the back of the head with a frying pan once, many of you aspiring traders came back for more on NFP Friday. How many lumps in the head can your account take before it is unconscious?

With yesterdays tone set, the insanity of the monthly BLS [Bureau of Lies & Statistics] report on Non-Farm Payrolls continues to make once-a-month-Friday markets more like a craps table than someplace to do business. The entire investment community knows this report is a complete fabrication and scam, and means absolutely nothing; yet they pretend the number is sooooooooo important that Western Civilization hangs in the balance. The fact is that “politicalization” has infected every branch of government; there is no truth, only spin; and as every single government apparatchik knows, nothing can be reported that makes President Chalky Goebbels look bad.

                      So, How Does This Work Out 9 Times In 10?

What we get after the spike action from Thursday and today is an intraday market that is basically adrift; nobody really wanting to do anything and a quite a few accounts that literally can’t because they got whacked pretty good.

The temptation is strong to jump in and participate. Imagine a gigantic pit where 400+ people are on top of each other, screaming, spitting, cursing; the electricity in the air is something I can only tell you about but can’t explain because the intensity is unexplainable; only those who have felt it and seen it know what I really mean.

Yet, I stand there in the amidst of this seemingly bored out of my mind; wondering which early train I’m going to catch to get out of there.

I’m not in there to make friends, impress 20 year-old clerks, pretend I’m a big shot, get my picture taken by the press, impress the folks in the gallery by jumping up and down, or do anything else that takes away from my only objective; make money. Some days you just have to man up and realize the algo can’t help you on that day and leave.

We have seen 2 days in as row where this has been the case, and sitting with my staff for some of this action would be worth an admission ticket in some university psychology departments. I can see and feel the angst among them, and it takes me back to my early days of trading, where missing anything drew a frown upon my face.

Here is the most ironic thing about trading; those that focus on winning suffer the biggest losses and those that focus on losing almost never do. Even after 30+ years of trading, the market has no idea who I am, and if I do something stupid [like ignore the algorithm] it will punish me as if I am a newbie tripling up on a losing trade. How do you think that’s going to work out?

The one thing you newer traders have to understand and have tattooed on the inside of your eyelids, is that discipline matters. If you don’t have it and can’t keep it, then it’s only a matter of time before the “pudding business” awaits your return.

I don’t have office buildings filled with math Ph.D’s and algorithm code that has 20 million lines. We can never compete with Vampire Squid and JPM; either in terms of market access or unlimited amounts of free Fed money. They got it and we don’t.

My algorithm doesn’t compete with them; it seeks to take advantage of their peculiar market situation when they shove the market one way or the other and create the volatility needed to do 2 very important things; 1) fleece the muppets, and 2) enrich themselves.  

Unfortunately for us this week, pretty much most of the range in price for the week happened in 3 five [5] minute candlesticks. Not much to do except be thankful the algorithm stresses NOT getting whacked as a priority. Believe me, there are plenty of accounts who wished they had taken a vacation this week instead of showing up to hand out money.

Have a great day everyone.

-vegas

NFP UGLY

                                    Hey, Let’s Trade Some Gold

In an economy only Chalky Soetero could love, even the BLS [Bureau of Lies & Statistics] couldn’t make up enough births, new business start ups, and people dropping out of the workforce to give the needed spin on today’s job numbers.

But hey, running the economy into the ground is hard work when you have fundraisers scheduled day in and day out. You have any idea how hard it is to party with the Hollywood types all week and then have to come home to MOOOOOchelle and be lectured about eating broccoli instead of cheeseburgers?

Back in the real world, gold took off today on hopes Weimar Ben has enough bad data in his quiver to justify full throttle hyper inflation full speed ahead into QE3 [and then QE4, QE5, ad infinitum nauseum] later this month at the scheduled Fed June meeting. 

So, just another $70+ range day. Ho hum.

My only hope for those that are long gold is that they get their collective wishes, because if Uncle Ben disappoints, well … I don’t want to go there because there might be kids around reading this and I don’t want to scare them. But at least for today, it looks like gold has bottomed for a while, and the $25 gap up on the NFP news filled some shorts at prices that left some stuff in their shorts [if ya know what I mean].

Not to be outdone, with record short spec positions in EURUSD, first let’s open the hatch door down, freeze the quote and order tickets for 30 seconds, then light the fuse to take us up almost 170 pips. That dealers intentionally freeze the order boxes even once in your lifetime should be cause enough to have them all taken out back of the woodshed and shot; not in the head because that would be quick. No, everywhere else.

Meanwhile …. In news you can really use.

                                    Which Adults Are Peeing?

It’s gonna get warm this weekend, and in the interest of making sure my readers are well informed and safe, you need to know that according to a recent poll conducted by the “Water Quality & Health Council”, fully 20% of adults admit to peeing in public pools.

“So, who’s up for hiking in the mountains?”

And because it’s gonna get hot out there this summer, remember: Amerika is known for its ingenuity.

Have a good weekend everyone.

-vegas

CHOOM COUNTRY, CHOOM MARKETS

                                Official Presidential Limousine

Our Narcissist-in-Chief spent the better part of his youth using/abusing drugs and alcohol. I’m sure he still has a clear mind. After all, if you intentionally wanted to economically destroy Amerika what would you do any different than he has done?

It looks like the gold market too is in some kind of drug induced state. Take today for instance; where else can you get 4 $5 rallies, a $7 rally, 2 $5 breaks, and to top it off a $20 break, all within 2 hours? And, the day has barely started! Obviously, some people need to clear their collective heads.

Maybe it’s from spending too much time in the Preezy Limo trying to suck in “bud smoke” off the roof. I dunno, just askin’, because what we are seeing in gold is pure unadulterated account destruction going on at the retail level. Open interest is dropping for a reason; nobody can handle these wicked spikes/drops that come out of nowhere multiple times during the U.S. session.

As if you needed to be reminded, gold has always had a reputation for stop hunts and dealer games. Throw in slippage on fills and you have cooked up a recipe for disaster. You really want to risk your account for a trade?

Meanwhile ….. over in fantasy land Europe, the Pol’s still pretend and play around like a solution to the continents problems are at hand. What they are missing is simply this: it’s not a liquidity problem it’s a solvency problem. Greece is gonna cost Europe a trillion Euros; in a country with roughly 11 million people, even if they were better workers than the Germans, there is no way that amount of money owed by 11 million people evahhhhhhhh gets paid back. Extend and pretend all you want, it ain’t gonna happen. Eat the losses and let’s get on with it.

But sadly, that these Pol’s would allow people for generations to suffer so that greedy bankers who made bets can recoup their collective bond losses at the public’s expense is nothing short of criminal. And until this changes, nothing is going to save Europe.

Tomorrow is NFP Friday; my favorite time of the month. Based on data received lately, I don’t know how the liars at BLS [Bureau of Lies and Statistics] can spin there way to a rosy number. In the “choom equity market” though, remember that bad news is good news because Weimar Ben stands at the ready for more QE. Nothing makes the prop desk traders over at Vampire Squid drool more than the thought of more money for the stock market.

Because as everyone knows, you are too stupid to know how bad things really are if only your stock portfolio is up and showing a 0.001 % gain. Nothing else matters, and with this new found sense of financial delight, you will happily [and blindly] go out and spend money and vote for Chalky Soetero in November. See how good things can be if only you would let them be good?

Back in the real world, away from Chalky Soetero and his “Choom gang”, things are a lot more clear; the jobs situation is worse, the inflation situation [especially food] is worse, Europe is in the process of going over a cliff, and of course FaceBook stock is 30% [or more] lower than a week ago.

So, put on that Bob Marley album, sit back and relax; I’m sure things are gonna work out.

Have a good day everyone.

-vegas

SEND IN THE CLOWNS

                                Politicians Speak Markets Plunge

Schaeuble: “Being a member of EU is a voluntary decision”.

German Finance Minister Checklist:

Step 1: Ok, first tell mistress to sell EURUSD at 17:00 [check],

Step 2: Tell mistress to cover EURUSD after the drop and before she goes shopping [check].

Step 3: Go find a TV camera and say something stupid [move the market lower] [check],

Step 4: End interview and go meet mistress with Dominique Strauss Kahn [check].

Sounds like an awfully productive day. Use the cover of a U.S. NFP report as cover so you can deflect blame for the move. And who says these guys are stupid?

Meanwhile ……….. at the U.S. BLS [Bureau of Lies & Statistics]

                                         Chief Statistician BLS

More lies, damned lies and then statistics out of the U.S. today that sent gold and other financial markets on a double reversal move guaranteed to allow you to pursue those 2012 tax loss strategies you have been thinking about.

Add to that the du jour “loose lips sink ships” talk from Europe, the Central Planners lurking about, and you have markets that are approaching mental breakdown.

This chart [courtesy of zerohedge.com] pretty much sums up Amerika today:

It’s easy to lower the unemployment rate when the number of workers in the economy plunges compared to the number of jobs lost. Duhhhhhhhhh.

I weep for the future.

And, as all this plays out gold sits precariously right at support in the 1620 – 1630 range. I don’t like the action right now in gold; maybe I’m wrong, but my guts tell me gold is about one inch away from getting clobbered to the downside. We’ll see next week, but with the break in oil and the dollar rallying, it’s going to be tough to get this stuff back over 1680.

Have a good weekend everyone.

-vegas

DON’T EVEN THINK ABOUT IT

                                            Sure, C’mon In

Yea, we’re open – not really – but if you’re dumb enough savvy enough to place those orders, we will surely fill ‘em.

Most markets are closed today for Good Friday, but some are open for 45 minutes, and some are open with $4.00 - $6.00 spreads [read XAUUSD].

I think I read somewhere where Jesus drove the moneychangers out of the temple – he didn’t invite them in. A $6.00 spread? I’ll bet the spread is tighter in an Outer Mongolia mining town. Oh well, such is life on an NFP Friday that also happens to be a Holiday.

Speaking of which, even Chalky Soetero’s sock puppets over at the BLS [Bureau of Lies and Statistics] couldn’t seasonally adjust there way to a bullish employment report today. By Wall Street standards a total miss at +120K, as the whisper number was above + 200K.

The way gold is acting [although it is hard to tell with 2 people actually trading with the dealer with a $5 + spread], some believe more QE is on the table sooner rather than later. We certainly can’t derive anything from today’s price action and will have to wait until Monday for the full impact. The way stock index futures and currency pairs are reacting [lower], I don’t think gold is out of the woods just yet and another test of 1612 and 1600 is in the cards sometime next week.

Have an enjoyable Holiday weekend everyone.

-vegas