“because the world is nuts”
Welcome to the “Because the World is Nuts!” newsletter Number 9!
Good day Traders and Investors,
Finally back in fashion!
Day traders and home based active investors are finally well positioned! What used to be seen as “the best business in the world” but has suffered for at least a decade due to declining volatility and the increasing trend to “passive” investing is suddenly the best, and only way to trade!!
There is a Zerohedge article out today talking about the problems of large firms trying to transact in this iliquid environment, they quoted one Los Angeles-based portfolio manager of government securities, he said he feels like he’s always on the job.
“It sort of makes the week one long day instead of a series of separate days,” he said. “I have the work station set up here at home and I’m wandering past, checking on the market and having conversations with colleagues about 16 hours a day.”
Hahah!! Welcome to my world mate! This is how it is, we are all “day traders” now.
The relatively easy times of just buying fixed income, or putting clients into the same passive ETFs every month and then going out for lunch or a game of golf, those days are over!
After struggling for years with ever declining vol, smaller daily ranges, looking at the news calendar to see when there might be something that will cause volume, having to trade Asia one day, London the next, then having to wait until FOMC Wednesday, or NFP Friday to hope there will be a move…but still monitoring the charts almost 24 hours a day just to find a scalp…when eurusd might do a 20/30 pip range day…watching. calculating, trading more and more exotic crosses to make a buck…those times are over! And long may it last. I guess the depths of low FX volatility was when I saw the Financial Twitterari trading ZARJPY and retailers making trades in TRYILS.
Making a % return in a month that used to made in a week has been tough on the psyche, and it seemed that the only place with any “action” was in being an individual stock picker, and even there one had to look for news as a driver to find momentum, Reminds me of trading Australian mining stocks late 2007…funny how “cycles” repeat isn’t it! Thats why we at 6edges have the Market Cycles Research team and Cyclist on our side.
I know that in the low volatility environment, Hedge Funds and prop firms would, could, and did just increase their trade size based around their VAR, Value At Risk formulas. But they have unlimited deep pockets. Sometimes in recent years after days of nothing, there might be a sudden range expansion, and if you went into the markets with 10 times usual size and got caught the wrong way in a range expansion, it would take the rest of the month just to get back that drawdown. Plus Hedge Funds have a salary, Risk Managers, Analysts, Researchers, automated scripts, HFT tools, automated trading systems running in addition to ones own activity. They have IT support, CoLocated Servers, a higher level connected professional network…and I will say it again, deep pockets…
As Daytraders and self directed active investors, we have to be all of those things, and life has been very tough for a long time, so I love it when I see that guy with all of the above advantages complaining about 16 hour days and he has only just started!!!
I have always tried to look at the bigger picture, to look globally, in business and life, not just in trading, “je suis internationaliste” is a phrase I loved when first hearing it in my Business French language course many years ago. Looking Globally has been important to me even as the world has been shutting down over the past 18 months, as I have been highlighting on the MCR blog. I used to think “Globalist” was a good thing, but nowadays it has a controversial connotation, so maybe “Internationalist” is better. On the blog we have traders from 12 different countries. We attempt to swap information about trends, events, and activity in each place to try and see “whats coming”, to see what the next play might be, where is the next risk coming from.
It helps to understand “why” something is happening, or might happen before it occurs, so that when we have an event, when we hear a news announcement, we can trade accordingly, not be fearful or surprised by it, we know in advance how to position.
Even when it comes to market events such as Quad Witching if we know its coming we can prepare for it and position for a 2 or 3 day play, so that the event runs into our profit taking orders, rather than getting caught in and buffeted by the wake of options players at that key time.
We, The Hex’s, have been trading for a long time, but always want to learn more, to improve and to adapt as the environment constantly changes. We read a book “The Play Book” by Mike Bellafiore of SMB Capital, and subsequently signed up for the Trading DNA course. This is by far the best single investment in our trading business to date. Being given insights into how to “think” differently about trading strategies, how to define ones setups, and being directed to write down the strategies and setups rather than winging it, helps enormously. It helps communication between me and Billie too, at critical times in the market. Having defined setups that we can both relate to, study, and understand makes our “trading team” stronger and more efficient, and all that was pivotal in making last week the best trading week we have had for a long time, not in $ terms, but more importantly, as Mike and Steve at SMB teach, we had our best week of “process implementation” for a long time.
Get the “process” right and the $ success will follow.
Back to that Zerohedge article, poor Jim Reid from Deutsche Bank complaining about not getting his daily exercise by commuting…and piling on the calories…Welcome to our world mate! We have to be disciplined to exercise, to eat well, to sleep when we can, to manage our lives. This at times might seem very unsociable, we don’t drink, well hardly, because it impairs our performance, it disrupts sleep. We have to be very careful not to catch a cold, or flu, honestly we have noticed over the years that every time I go into a supermarket I was coming down with a bug..so now only Billie goes in the shops, I never ever do, since years. Billie has used antibacterial wipes on the shopping trolley, for a couple of years now to avoid infection. This is how we had to live to stay “in the game”, or maybe I should say “Trading In The Zone” to quote the late Mark Douglas, seeing as I already mentioned one key trading book author in this letter. We have to be like athletes.
Jim Reid goes on to talk about the technical difficulties he had with his phone line/connection…jeez…you try staying connected travelling and living across different countries without getting tied into lengthy internet contracts. One place we owned, the Spanish phone company never even got around to connecting a line to the building, it was 9 years old when we sold it and still didnt have a line!
So, when you see and hear and experience all the troubles in the world right now, all the virus related turmoil, just try to find a positive, we are finally on a more level playing field.
Looking ahead, the absolute key life blood that keeps markets open and flowing, that keeps supply chains going, electricity and water and all the essentials to life, oh must not forget internet service providers, is credit….that is why the Fed, and Bank of England and the SNB, BOJ, RBA, etc…are making interest rate cuts and facilitating USD Swaps, and why Governments are giving grants, and tax payment holidays, etc…its all because of the credit system, trying to stop people and businesses from walking away, from defaulting on their loans. This is why the US Dollar is so strong, as stocks drop, people have to sell, and that creates dollar demand, people get margin calls, people sell gold to pay them, it all creates dollar demand. Yes people in Australia for example also have to sell, but the size of the entire Aussie market is/was about A$1.9 trillion, the market cap of Apple alone is around USD $1.3 trillion, so that demand for Australian dollars is insignificant compared to the US dollar demand. Then there is the view from Martin Armstrong who will post a quote from:
“Europe has directed bullion dealers not to sell to individuals. You will probably see next week a proposal floated that asks Europeans to turn in their gold and convert it to digital under the claim this is patriotic. There are growing fears in Europe that they will cancel the paper currency and force everyone to go digital. This is why there have been runs on banks in the USA for cash dollars in New York, not for fear that the bank will fail, but a panic to get out of Euros.”
In 2008, the final kicker that knocked markets down was lack of confidence between banks. They became unwilling to lend to each other as the old adage of “return of your money being more important than return on your money” kicked in. Confidence crashed, stocks followed immediately. That’s why the financial powers that be are trying to keep the gear oil flowing through the economic engine & provided they can achieve that, things can keep going, markets can stay open, and confidence can return, the US dollar can relax from its heights and we can have a great 2 way market again, a traders market full of activity and opportunity, not a passive investors paradise…
Trade safe, keep it tight, stay active, there’s even more opportunity out there now.
Remember, you need 6edges.net “Because the World is Nuts!”
Cheers for now,
|Welcome to the “Because the World is Nuts!” newsletter Number 8!|
Good day Traders and Investors,
We have Volatility! Not exactly for good reasons, but in this extreme volatile environment risk management is paramount. Yes its possible to make large gains, but its even easier to lose everything. The priority must be on preserving capital, reduce size, trade at the extremes, and only press hard when absolutely sure of your risk.
Cyclist said sometime ago “Stay short equities and long gold”. You only have to check the prices now to see just how right that statement was!
As US stock indices became more and more over extended, the whiplash back to some kind of mean has been swift and violent and extreme, and even the volatility in Gold has been difficult to deal with unless you are buying and holding from much lower, from the lows that Cyclist was adding at some months ago.
The Market Cycles research blog has been active, with many good interactions and information exchanges, keeping us all aware of the major themes and winds blowing through markets globally.
In the Trading Room, Hex has been providing his weekly Cable Report for FX traders and that provides some important levels to watch for and trade each week, Jay has shared some of his Options trades, and hopefully one day he will provide some instruction on how to interpret those amazing lines and curves on his charts! QuasiDB Dave shares his sentiment index information which adds to the colour and information flow, and you should check out his site and dynamic spreadsheet.
Cyclist has posted some great calls, here are a couple of examples below.
Health is a very important topic right now and something we should all be more aware of, and Cyclist has provided us with some very timely information regarding this.
I cannot finish this newsletter without mentioning my Wife, and Trading Partner/advisor/boss, Billie.
A one-time Chocaholic, she has now been totally sugar free for 100 days! No carbs, no sugar, totally Paleo or Keto, or whatever they call it..I wish I could be that good…
Thank you as always to all contributing members for making this a great place to have to support ones trading and investing activity, and maybe its becoming a health advisory center too!
Cheers for now,
Welcome to the “Because the World is Nuts!” newsletter Number 7!
Good day Traders and Investors,
I have started this newsletter several times, and each time I began, world events moved so rapidly that it was out of date by the time I finished it, sometimes in the same morning!
You do not need me to rewrite the news, although some would say we need just that to find out what is really going on, and for that reason we have the Market Cycles Private Blog, but suffice to say the world really has gone nuts.
It is clear that if any problem, or potential problem appears on the horizon, the only response is to throw more money at it. Money by any means, just throw it out there, stop a market correction, and make inflation happen.
So far they are only succeeding at preventing a market correction, what that means for the future I do not want to suggest here for risk of sounding even more nuts than current situations and events.
Without a doubt, the Corona virus has thrown a spanner in the works of cyclical calculations. The only thing that is tracking the current markets well is sentiment, and that is really the buzz word now, everybody is looking at it. Stocks traders and FX traders, crude oil traders, all are united in this, just as they all became united in looking at how low the VIX volatility was, remember that?
In this environment it is good to know what cycle we are in. Usually “events” push markets in line with the cycles, and sometimes, rather like now, some markets are being skewed. Its a time to ask Cyclist what he is doing, as markets have always reverted back to what the cycles suggest, just sometimes they can skew a long way and we need to trade against the major cycle to catch the minors, or patiently sit out, all depends on how active or passively you trade.
Cyclist publishes his yearly outlook during January and February for stocks, dollar, FX, Gold and Bonds, available to all members. All his posts and activity are archived for members to refer back to as some long term forecasts can take a while to develop, and of course the point is to make money and protect your funds, not just to win or lose in the war of predictions as so many seem to focus on.
Join us now to secure this resource for the next 7/8ths of trading year ahead!
Welcome to the “Because the World is Nuts!” newsletter Number 6!
2019 was a year where traders and investors in the US stock market did very well by doing absolutely nothing! Buy and Hold, passive investing proved to be a winning strategy. But that doesnt mean it was easy. To maximise the year, to navigate the swings, sit tight through the low volatility and to ignore the many calls for big crashes and expectations of black swans was a job for the mentally tough and strongly systemised traders. Those that could ignore what “should” happen, what “usually” happens, and instead deal with is actually happening right here and now, did very well, and fortunately some of our members have those skills and made some excellent trade calls.
Kudos has to go to Moon, FM, n0marko and Pict, just to name some that stand out. Also should mention VG,Tiago, Tarponking and Sanjay and Hertz with his “frequency” calculations!
Cyclists stand out call for me personally was on GBPJPY, a relatively big mover in a year of record lowest FX volatility since the end of the Bretton Woods agreement in 1971. This call also aligned with my own views of buying GBP pairs, and Cyclists view assisted me in giving confidence to keep on buying despite the potential fundamental risks during the the political events of the year. Cyclist also made some very timely short calls in SPX which for a short term trader such as myself were very interesting, and for those with a long bias it may have assisted in taking profits and then looking for a time and price to get back in long. Gold, and specific miners stocks, GDX ETF and Crude were also called on.
That is where conversation and “flow” can help so much in forming a traders view. We dont have to agree on everything, this is not a signal service, but being surrounded by such professional & experienced traders views means we can each form our own view based around the important information that flows by, and interpret our charts and systems accordingly as flow and ideas and comments interact with price and chart action.
Thank you to all members that contributed with calls, comments, information and encouragement, both “front of house” and behind the scenes. Please may there be much more of the same during the 2020 session!
Free access for life continues for contributing and founding members, and we are keeping open the “free trial” window for new and non contributing members for now, so please forward this newsletter to any traders and investors that you know who may be interested in benefiting from our community. This information portal will become even more essential as the world goes nuttier!
All the best for a great 2020,
Welcome to the “Because the World is Nuts!” newsletter Number 5!
New highs in the US indices, new lows in Volatility, FX Volatility basically flatlined.
Makes for a very slow and boring way to make a living in this current market environment. They say that good trading should not be exciting…but good FX trading also needs volatility, decent daily ranges of at least 0.75%. A two way market is best too, not just a “drift dive” which might be great if you are a scuba diver but not when trying to get into a trade!
Despite the markets being on the slow side, some members have done very well to ignore any pessimism, and to get long SPX and stay long in a trend following manner, kudos to those guys, I wish I had their patience.
Cyclist is partially back, off and on depending on internet connectivity, so we are still OFFERING FREE ACCESS! And we are actively interested in any new member that wishes to contribute to our trade/chat room, to increase the daily flow and colour provided.
Highlights for the past month in the Trade Room
yes after a substantial pullback we might see a run up to the 3500 with all that QE money coming into the market.
From what I’m gathering the output from the solar panels vary greatly all the time.
The solar industries are not calculating solar minimum coming up in the world . The western nations are already experiencing less output and it is a negative environmentally wise.
The lows in gold are in IMO, after the expected meltup a la 1929 in the main markets ,we could see ,doesn’t have to be, a retest of the lows in the PM stocks at the end of the November month
On the private blog, Hex used a pic of the month showing a Black Swan, and her Cygnets, suggesting there are so many possible market killing, but volatility increasing events breeding out there, so far none of them have grown up to be a threat but soon they will reach their “terrible teens” and that might be when we get some activity! Take care out there!
Current members please forward this email to your friends, foes, people you have lost touch with and need a reason to reconnect, or anyone else that might be interested! Do them a good turn and give them FREE ACCESS!
Wishing you a good month ahead,
Welcome to the “Because the World is Nuts!” newsletter Number 4!
The entire world is exhausted by the news. Every country has its political class in a total mess and without power to govern freely. Maybe that’s a good thing, I really don’t want to get into that because 50% of readers will have an opposing view, and all that matters is what the markets think, and making sure we are on the right side of what they are saying.
The only thing I will say is regarding Brexit in the UK. What will probably happen now is, Boris Johnson will keep on insisting on the 31st October as the Brexit date, right up until as near to midnight as he can. Then he will make a speech, he will appear frustrated and impassioned as he calls on the Brexiteers to not take to the streets a la Barcelona, HK, Lebanon….he will call on the disillusioned to give him a bit more time to deliver Brexit, and call on the people to demonstrate their frustrations, not in the streets but at the ballot box in a General Election.
One other thing I want to say whilst I have your attention and before I fall off my soap box.
FREE ACCESS UNTIL DECEMBER!
Yes that’s right. As Cyclist is currently away we are opening up the Trade Room to anyone that wants to look in, join up and contribute to our group of traders and investors.
Tell you friends, tell your Mums, tell your pets. Just enter your email address at http://www.6edges.net and I will add you to Slack and you can have at least a few weeks to see what goes on. Its not a high volume high activity place, but its quality over quantity…come and see…
Cyclists big picture views are currently long physical gold, and long biased GBPJPY as it makes a multi month base, but come and find out his recent views on spot Gold, Silver and Miners before its too late to take action.
For more recent updates, market information and activity join us! Click Below to Sign Up.
SIgn up to receive immediate updates from Cyclist and other expert members of our community via the www.6edges.net live Trading Room
Current members please forward this email to your friends, foes, people you have lost touch with and need a reason to reconnect, fellow Traders and Investors, and anyone else that might be interested!
Do them a good turn and give them FREE ACCESS!
Wishing you a good month ahead,
We made it to the third 6edges.net “Because the World is Nuts!” activity update! September….its only the 24th but it feels like its been about 6 weeks long!Geopolitics have been chaotic, there is no other way to describe it, there is not a single theme. The only thing that unites every major country right now is political uncertainty, and economy wise they are all on the cusp.
One way I had chaos theory explained to me was to imagine two roulette wheels placed side by side. The steel ball is balanced right on the join between them. The ball is in a totally unstable situation, and we have no idea what will happen, all we know is, the ball cannot stay where it is much longer….
Its Because the World is Nuts that people join our site. Cyclist is way ahead of Global cycles, geopolitics, and how events can affect the markets you trade.
Just wanted to talk a little about our service. Its not a place for high volume trade signals, or idle chat for the sake of saying something. If the markets are quiet , we are quiet. Some members use our private blogger site to share longer posts about their thoughts on the markets & this month US debt has been topical, and probably will be again at some point in the future!
Cyclists views have not changed. Long physical gold, short spot gold from $1550, flat on GDX and long biased GBPJPY as it makes a multi month base.
Below are a few recent comments from members in trade room.
Futures soaring right now
All indices up 1%
Massive short squeeze imo. Everyone and their mother was bearish.Broke out of 2950 resistance and Darvas box
Linda Raschke says put/call ratio told her to get long on the 4th and there is “more gas in the tank”, Similar to FMs idea.
Hertz shared a proprietary chart on miner AUY This Gann cycle is one of his simplest methods.
Tarponking buying Bitcoin
Started scaling in gbtc at the close.
For more recent updates, market information and activity join us!
SIgn up to receive immediate updates from Cyclist and other expert members of our community via the 6edges.net live Trading Room
Welcome to the second 6edges.net “Because the World is Nuts!” activity update!
Even “Walls of Money” crumble against “Cycles”
So, August is finally over…seemed like a very long month…too damn hot, markets were crazy, geopolitics totally mental, and did I say too damn hot?
Had a couple of very interesting phone calls last month. One with somebody from an engineering firm in the UK and another from a house building firm, also UK.
The first told me in no uncertain terms, “we are headed for a terrible recession, and some say we are already in it”
They cited the automotive industry, brexit, consumer debt. The German slowdown into recession is also a big factor.
The most surprising thing was to be told that outside all supermarkets now are Food Banks, with shopping lists telling people what they need you to buy for them…this is a very affluent area where for example, they recently opened a Waitrose…that will mean more to British readers but basically its an upper crust supermarket, like a deli but bigger maybe.
The second told me they are selling up. Its a listed firm which is basically a decent family business that became successful due to clever financial engineering in a booming government sponsored housing market and they are selling out to, a much larger listed firm. The reason is that their main activity has become “build to rent”, building housing for housing corporations, local councils, and they bargain hard on price and so its a not very profitable niche, but the only one left right now as building small private estates on spec is no longer a viable business in the UK, due to many factors such as high land prices, property taxes, personal indebtedness, and of course a topping out housing market.
Despite being hot, I did learn a lot in August. I learnt that I need to listen more. Listen to Cyclist and listen to other members here.
During every day I am in touch with a couple of people…ex floor traders that have been in the FX business for 35 years…and wow they can trade…I have learnt a lot from these guys other recent years. And so when they both tell me, from different inside sources, that their connections tell them that there is a “wall of money” below EURUSD, and on top of DXY, all my math and and thoughts of “cycles” or what Cyclist has said, is just ignored. I looked only at buying the Euro, looking for a surge up on “End of Month Flows” I was short USDCHF too, expecting a risk off collapse that never came. So I turned a good month into a mediocre one, all in that final couple of days.
Looking back through the archive of August, of Cyclist posts, he was consistent in his views and described in real time what he expected, and it all played it as prescribed. From FX to SPX, to the Gold/Silver ratio.
So the key lesson is, trade the technicals, be aware of the fundamentals. Listen to Cyclist, and dont rely on “whispers” to give you a windfall. Even “walls of money” crumble against “Cycles”.
http://www.6edges.net continues to grow and highlight trading opportunities, we have solid market discussions and carefully navigate through todays markets as a supportive, active community. Please consider joining us to receive timely market information.
Here are some recent highlights.
Cyclist 4th August
There is a historic change about to happen what has never happened before with the Negative interest rate universe.This will cause the annihilation of the pension funds and the bankruptcy of nations when interest rates are going up ,if there are any tradable bonds left, in a liquidity crisis.The Fed will not be able to stem the tide.The holders of bonds denominated with a negative coupon will be wiped out. As it has essentially no value.
I think governments are well aware of it ,instead of printing currency they print bonds that will have no value and are forcing pension funds to buy them for “safety” reason, how diabolical can one get.
.The reason Trump wants to see 0 or better yet negative interest rates ,to wipe out the debt,I think the Asians are getting wise from what I hear.The feeling is that the stock markets might hit the Stratosphere what I personally doubt while bondholders are being set up for holding the bag. It is a Mug’s game that will make gold shine or any other commodity asset.
Presently interest rates are going through a black hole while obliterating the principal in the process.
Sanjay August 12th I am again late by 1 day. So far as I can read the astro-charts, no major upside movement is expected in Oil. It is “Sell on Rise” market for Oil. On the other hand, Mars aspecting Jupiter may result in further upside in Gold, Silver and Platinum.
Gold and precious metals are in “Buy on Dips” market and likely to remain so till September
FM August 19th
Definitely not a place to short imo. Lots of volume ratios giving bullish signals last week Wednesday and Friday. Not out of the woods just yet though.
Hex August 26th
Hi @Cyclist I have been asked to ask if that is the reversal in gold, short mode now? Thanks, Hex.
Cyclist August 26th
Hex ,I am only in physical gold .I am standing aside with gold/silver stocks.I did buy physical Platinum.
Several members discussed Bitcoin, brokers and price levels, also how much to hold as a % of a portfolio, very interesting but its too soon to make this information public.
August 30th MA
You were also right about Gold/Silver Ratio thanks again Cyclist!
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19th August 2019
Welcome to the very first 6edges.net “Because the World is Nuts!” activity update!
It’s lively times in the 6edges forums.
Cyclist is increasing his activity as market volatility rises.
Here are some recent highlights.
Cyclist on gold & silver miners
FYI ,I have been exiting gold and silver stocks ,the cycle has topped out
Cyclist on stocks
I think the top will be in, the negative interest rates will eventually bring house of cards down .people will flee the bond market to seek shelter in commodities. It is going to get crazy.
Cyclist on Forex
Hex ,I mentioned to Hammond that GBP will make a major low in August in a multi month cycle against the Yen and the Euro as well.
Questions for Cyclist not yet answered……
Cyclist, it looks like we got close to your target on the Dow today to reshort. Are you still holding off?
There looks like a gap play on corn, limit order, they will wash the stops here I believe and set up a long swing IMHO.
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