WELCOME TO FED PIE HOLE DAY!

 

“How the financial MSM reacts to FED bullshit!”  

“Oh, won’t it be glorious”! … six [6] FED Pie Holes spewing forth bullshit 

today, so high you’ll need hip boots and a very large shovel to keep from 

drowning in the “Everything Is F-ing Awesome Baby!” pile … of course, the 

financial MSM over at shitboxes like CNBC & Bloomberg, will burn the 

airwaves assuring you to buy “MOAR” stocks cuz shut up … the purpose of 

this frenzy of faculty lounge Twits foisted on the public, is of course not to 

inform, but to assure you they know what they are doing … the fact that for 

about 116 years they’ve gotten every fucking thing wrong 100% of the time 

should not concern you … “why focus on facts when you got hopium”?

And so, like every other day, markets are relatively quiet awaiting 

instructions from the “smartest people in the room”, so HFT algos know 

which way to burn people … as I said yesterday, markets only move now on 

POL & Apparatchik bullshit … every “Hoover Dam” day it’s somebody or a 

group no-nothings holding court to direct markets for policy purposes 

… literally nothing else matters.

Overnight saw me put on a GBPJPY “overlapping” Call Spread position for 

signals subscribers, with very limited downside risk, where max theoretical 

risk was 29 PIPS, and real world risk was about 15 PIPS … it is one of my 

very favorite strategies for volatile markets, and GBPJPY is at the head of 

that list, and is an excellent strategy for either 1) low or medium volatility, 

and 2) falling volatility from high historical levels … however, having said 

that, it can also be used successfully in highly volatile market conditions as 

well, although a “ceiling to floor” and a “floor to ceiling” combination trade is 

better if priced right. But, and this is a very big “but”, the market doesn’t 

always give us decent pricing in this strategy … evidence of that can be 

readily seen in WTI Crude Oil & the stock indices, where pricing has reached 

the utterly ridiculous level.

It’s not my intention today to get into the “nitty gritty” details of the 

overlapping call spreads … much, much more detail in the tutorial coming 

Sunday night on Call Spreads … I don’t wish to be redundant, but let me just 

say, there are 2 very critical components for profitable trades from this 

strategy; 1) pricing, and 2) proper spacing … and you most definitely need 

both … we got that last night in the trade.

There are 5 NADEX markets that are very well suited for the  

“Overlapping Call Spreads” … better than the other 9 markets … in order of 

relative importance; 1) GBPJPY, 2) GBPUSD, 3) EURJPY, 4) DAX 30, 

AND 5) DOW30. The first three [3] especially, will almost always give a  

“pop & drop” during the trading day at some point, no matter the overall 

volatility environment. But, as I said, conditions have to be right or you walk 

away … much more in the upcoming tutorial.

Today’s trade sees me looking for a modest down move in GBPJPY from last 

night’s open … directly below, the trade tickets for the buy/sell sides.

 

click to enlarge All 

When GBPJPY moved lower, I rang the register, albeit a little early cuz their 

was more to the move, but as I explained to signals service subscribers after the 

trade was through, capturing that first move out of the box, early in the Asian 

session, since we were risking about 15 PIPS, it’s critical you ring the register 

at some point … it doesn’t matter if it keeps going … what matters is it doesn’t 

snap back with a vengeance and bite your donkey, which happens more 

frequently than I care to think about … “what makes pairs like GBPJPY so 

dangerous, and at the same time so potentially profitable, isn’t only their ability to 

put in ranges in all kinds of volatility conditions, it’s their ability to seriously 

“pop & drop” at a moments notice … and those moves you take advantage of 

while you can without looking back over your shoulder and playing the “what if” 

game … in a pair like GBPJPY, there is no room for hindsight”!

Well, it didn’t take long and the trade liquidation tickets directly below.

 

[The ticket on the left should be a red sell ... I changed it before I sold.]

Looking at today’s schedule from last night, it makes even more sense given 

ECB minutes in the morning and 6 FED Pie Holes lying during the NY day 

… so, even though I got out early, and I know some subscribers did better 

than me, I’ll book the 60% profit on risk capital and move on.

  

Even with today’s scheduled ECB minutes and FED Pie Holes, already we’re 

starting to see a drastic wind down of VIX, most notably in stocks, as ranges 

collapse from just days ago … “think this is a coincidence? … hardly”.

So, onto tomorrow and the end of the week … not looking for much tomorrow, 

as next week brings plenty of event risk, especially in anything Cable related 

like GBPJPY … I don’t think many people want to bite off risk on a Friday 

and head into next week … we’ll see what happens, but traders are “skittish” 

at the moment, and that should see a relatively quiet Friday session.

And with that, I’m outta here … until tomorrow mi amigos 

… Onward & Upward!!

Have a great day everybody!
 

-vegas

OUR NADEX SIGNALS SERVICE IS UP & RUNNING … DAILY 

WTI CRUDE OIL SIGNALS & “VOLATILITY” STRATEGIES 

IN 20 OTHER MARKETS, INCLUDING COMMODITIES, FX, 

& STOCK INDICES! … “what on earth are you waiting for”?