Showing posts with label Order. Show all posts
Showing posts with label Order. Show all posts

Monday, November 27, 2017

“Rule By Brute Force”: The End of the Age of Benevolence

This article was originally published by Francis Marion at The Burning Platform


benevolence


The history of democracy, Marxism and feminism is the history of the snake, which, being hungry for more, stalks its own tail and consumes itself. 


Some evenings I sit on the sofa in the family room with my teenage daughter and watch a TV program with her. I leave the choice of the show to her, it matters little to me, and when she finds something she likes she sits next to me, puts her head on my shoulder, and snuggles up for the hour it takes to watch whatever it is she’s chosen.


It’s our time.


Occasionally we’ll sneak in another twenty or thirty minutes to the objection of her mother but I like my time with her so I put up with the raised eyebrows and the, “She’s got school tomorrow,” scoldings. It’s important to me that she knows I love her, that I want to spend time with her and that she feels safe when she is with me. Someday, when she is a grown woman I want her to find a man that will take care of her and protect her like I do. I expect no less from a suitor and neither should she.


There will be women who read this who will object to my stance. They will say, “She doesn’t need a man to feel safe or validated or content,” but I would disagree. When she gets older she’ll need a good man, not just any man, and that’s as true today as much as it was ten years, twenty years, fifty years, one hundred years and even one thousand years ago. And it will become even more so as time goes on.


Indeed, we have reached peak denial in our civilization and whether we like it or not reality is about to make a come back.


The freedom that we have enjoyed in the west and the modern democracies that have sprung forth from our evolving and enlightened philosophies over the past few hundred years are not a given. Granted, they are preferable outcomes given our natural state but politically speaking they are an anomaly in the history of mankind and not the norm.


As such, democracy and the systems, social structures and institutions that have grown up around them are grossly misunderstood by the vast majority of the western world. Most of the people living in the west today have been raised to believe that democracy is a moral system of governance and that it is our gift to the rest of mankind. But democracy is not an inherently moral system nor is it a guarantor of linear, progressive political growth.


At its root democracy is quite simple. It is the exercise of political power by the majority over the minority. It is the power to choose in matters of politics. This, of course, begs the question: to choose what?


Since choices in general (and political ones are no exception) can be either good or bad, in this case, both for the individual and the body politic, then it follows that democracy is neither. It is nothing more than a tool for decision making where the majority holds the power to make decisions that affect everyone, either for better or for worse. Democracy is, therefore, a reflection of the character of the people who exercise it.


Additionally, democracy is also the use of soft force. That is, the minority bends to the will of the majority on political matters and the apparatus of the state is responsible for carrying out its demands. The minority consents, willingly or unwillingly not because violence is present but because, by the state’s presence, it is implied.


More importantly, though, democracy is a luxury that is preceded by benevolence but does not necessarily guarantee its continuance or creation if forgotten.


Societies in a state of internal turmoil, or where competing factions vie for political power, often through the use of overt physical violence, will forgo democracy because the primary component for its exercise, order, is absent.


Democracy in the western world has always followed ‘order’. ‘Order’ is a byproduct of force and, like democracy varies in severity on the scale of good and bad, its moral leanings by and large being dependent on the type of people who impose it from the top down. It can be fatherly and benevolent or it can be violent and oppressive. It is never universally both.


Thus democracy usually occurs where ‘order’ has been established and the apparatus of the state is at least somewhat benevolent.


In a political world ruled by strength, order and benevolence are precursors to suffrage. Without either suffrage would not exist, choices would be limited and brute strength would still be the order of the day.


Whether feminists are willing to admit it or not, brute, physical strength is at the root of all political power, thus feminism came into being because those who held that strength chose to exercise benevolence and reason over strength and subjugation. Their suffrage was dependent first and foremost on the benevolence of those who held political power. And like it or not, those who held political power at the time it was introduced were men.


As time progressed, at least in the West, democracy, and universal suffrage gave way to both physical and intellectual freedom for women. In the West during the twentieth century, its political structure (and the intellectual values it embodied) and the industrial revolution it spawned ushered in a new era for women, giving them choices they had not previously had, by and large, since the beginning of recorded history.


Women were finally free to choose between family, career or both. Rather than playing the role of the weaker, subservient sex women found their place beside men in society as intellectual equals. Physical strength was no longer a factor in the social structure of our civilization. An intellectual meritocracy came to be valued over a system based simply on brute force. This structure was the product of order created from benevolent strength.


But the rise of Marxism and feminism, particularly the rise of third-wave feminism has put ‘order’ at risk.


Without order, an intellectual meritocracy will once again become subservient to strength. It’s a hard pill for women and progressive liberals in general to swallow but it’s a fact.


Marxism and modern feminism work continuously towards a perfect world but ignore reality in the process. They forget an important lesson, born true repeatedly throughout history:


There is no utopia.


The best we can hope for in any civilization is for a society to be built and based on fundamental individual rights and freedoms. If we refuse this then we return to what we were before. This means rule by brute force which means the end of political and legal equality for women and the death of democracy itself.


The irony in the dilemma which the West now faces is that our demise, the continual erosion of a democratic, intellectual meritocracy, is by and large spurred on by the very people that our system was created to protect.


Feminists, both female and male, cry daily for more of the same poison which infects us. More illegal and unscreened immigration. More tolerance of philosophies which are intolerant themselves. More invitations for an enemy created by a corrupt and immoral government to ignore our borders and live among us.


More cries for moral nihilism, the repression of speech (one of the cornerstones of their own suffrage) and the denial of fundamental biological reality.


More cries for the denial of basic math and the continuance of government-sponsored bread and circuses. More of everything which our civilization cannot sustain. More of everything which rots us from the core.


Subsequently, modern feminists decry the men of their own civilization as misogynists, racists, and intolerant while forgetting it was their own men who recognized that a society built on equal political rights for all was preferable to a society built on spoils taken by the strong. They forget that it was the men they live among who valued justice over greed and force so much that they shed the old ways and took their place beside their women instead of in front of them. They do all of this while cheering on the invasion of their own countries by foreign men who view them as nothing more than chattel property. In doing so they have unwittingly invited the destruction of their own freedom.


While I sit next to my daughter I wonder what the future will hold for her. I have no desire to see her disenfranchised but the reality is that many of her own kind have chosen a future where reason has been rejected and instead, traded for thirty pieces of silver and whatever makes them feel good. Unfortunately, a world without reason is a world without order which is a world without choice. A world without choice is a world of brute force. And that’s a man’s world.


Ironic.


Benevolence and democracy should have ushered in an era of truth and reason but instead, they ushered in an era of denial and wishful thinking. Thus, democracy’s beginning will also be its end. What came from force will return to it.


For those of you paying attention and who can see the contradictions and the resultant decay, pray. Pray that what comes afterward will once again be benevolent.

Friday, August 11, 2017

Saxo Hikes Inverse VIX ETF Margins To 40%

Last Saturday, we reported that with VIX at 9, Interactive Brokers surprised many when announced it would raise volatility margins anticipating a VIX shock. This is what the brokerage said:





VIX has established new all-time lows over the course of the past month. The price dynamics of that product are such that it can have very large relative price increases over a very short period of time base on news and other market factors. In recognition of the special risk of sudden, large increases in market volatility, that is inherent in Volatility Products such as VIX, Interactive Brokers will put into place greater margin requirements for Volatility Products after expiration processing on Saturday, 19 August.



IB was also surprisingly clear in what it anticipated





IB"s margin policy will be to consider market outcome scenarios under which VIX might rise to a price of 18 (even when it is currently priced much lower) and under which the other Volatility Products could rise to proportionately similar degrees.



As we summarized, "In other words, IB is starting to prepare for the day that the VIX doubles from current levels." Less than a week later, Interactive Brokers was proven right when VIX hit 17, nearly hitting its bogey. We also pointed out something else:





Of course, since volatility is the "fulcrum security" of today"s reflexive market nature - does a surge in the VIX send stocks lower, or does a market crash lead to a VIX surge? - the very fact that vol-linked leverage is about to be aggressively cut first by one, then by many more if not all exchanges, as we head into the critical for volatility fall period, these warnings could create a self-fulfilling prophecy whereby the margin increases are the very catalyst that leads to a surge in volatility. Whether that is what happens over the next two weeks remains to be seen.



It was "just seen", because after yesterday"s near historic spike in vol, as we expected others are starting to do precisely what Interactive Brokers did first, and on Friday morning Saxo announced it too would hike its minimum margin rate on both Korean stocks, for obvious reasons, and on Inverse VIX ETFs, sending them to 40%, in the process forcing clients to put up substantial margin or else be forced to close out of short-vol trades.


Here is Saxo:





Due to the growing tension between North Korea and the USA, we are increasing FX and CFD margin rates on Wednesday 16 August 2017, at 08:00 GMT, to reduce your risk against the potential high volatility, rapid price movements or market gaps that may occur in case of further political escalation.





And some parting "advice" from Saxo:





How does this impact your trading?


If you have open positions in any of the affected markets, please ensure that you monitor their positions carefully and maintain sufficient funds in your account to meet the increased margin requirements during this period of turmoil. We would like to recommend to keep the following in mind, especially when trading during periods of potential market volatility:


  • Consider placing relevant resting orders in advance. Market liquidity may vary substantially, and trade/quote requests may be unavailable at times as existing resting orders and new market orders are filled as priority

  • Market orders are not guaranteed to be filled at any specific price – they will be filled “at best” according to available market price when processed

  • Stop Loss orders are converted to Market orders once triggered, so are not guaranteed to be filled at your stop order level – gaps in available liquidity can result in significant slippage on Stop orders

  • Using Stop Limit type orders (rather than Stop Market) can be very beneficial as they allow the client to specify the worst acceptable immediate fill rate after triggering, and they will rest in the order book if not able to be filled immediately

  • Buying options (i.e. puts to protect long positions and calls to protect short positions) could be a hedging vehicle suitable for market uncertainty since they offer protection at the fixed Strike price, rather than Stop orders where fills on gapped prices can occur

Friday, July 28, 2017

Gold at $1268, Now What?- Analysis

IF-THEN: Short Term Action


via Moor Analytics


 About: Moor Analytics publishes 2 reports daily for Gold, Crude Oil, and Natural Gas. Each report analyzes market activity that day and in context of the bigger picture. His Energy work is especially important for spread and seasonality traders. We are subscribers, and have Michael on our speed dial for quotes and comments on big moves and points of inflection like we feel the market is entering today. Here is what he shared today with us, as we got stopped into our Gold position of long above $1259. Our comments in italics


(Excerpt)


  1. IF Gold stays above  $1261, THEN look for a run to 1270 and THEN 1283

  2. IF Gold goes back below $1261 THEN prepare for a bear leg to start as longs begin to liquidate that could drive Gold down to $1254 which is a buy level. But below $1249 is a level to get short

Note: We are taking  #2 above very seriously. Our personal approach is, as you will see below, biased longs who let profits run.


Every number is a level to decide. One could short at $1270 and reverse above it. A long could take some profits at 1270.. and so on. One must decide loss tolerances and slippage according to their own bankroll and execution style. Every number that is support, becomes resistance once pierced. Numbers in Aug futures today


SKG Position: VBS short term trade Right NOW



 Live Interactive Chart HERE


  1. Long above $1259 (filled at $1260) looking for $10.00 in 2 days = $1270 target

  2. Stop-loss at $1257 - making the risk reward 3 to 1 per our VBS system

  3. Do not take the trade home if settles Out of the money. So if settles under our buy level but not stopped out, we exit. This is a device we implemented  and improved upon specifically  to protect against thinly traded overnight spoofers who would most certainly stop us out

  4. If target reached sell half of position and trail the stop up to $1265 on the rest with the next target as $1283

N.B.- One thing that is apparent in this approach, often times the VBS will call that last frothy run higher and then the violent reversal lower. It worked very well as option longs hedging gamma. But that was because we knew if the rally continued, we"d have more futures to sell.


Using just futures, It just breaks our heart selling for a profit and having the market continue running without that gamma. So we leave a tail on in the form of a partial position.


Reversal on Stop - Out: What we should be doing per the VBS trade is selling longs at $1257 and getting short there. This is consistent with Moor"s approach... We just can"t  do it yet.. 


Bull and Bear  Macro Trends (excerpt)


via Moor Analytics


all numbers approximate - SKG


  • Ground Zero:  Bear Move from $1911 down in 2011

  • Bull Correction: the rally from $1047 to $1374 in 2015

  • Bear Correction: sell off from $1374 to $1124 in 2016

  • Bull/Bear Corrections since then  are more recent and thus shorter term.

If you have interest in learning about Moor Analytics Reports and seeing a full sample (older) report


Confessions of a Gold Bug: Right But  Poor 


We have been so right on this market and so wrong on trading it  too many times. The adage, "I"d Rather Be Rich Than Right" haunts  us constantly as macro analysts and micro risk managers.  For us, making money is easy. Keeping it is hard. Such is the nature of "parlayers",  and traders that fall in love with their trades.


But we"ve made many good calls and given very good  risk  reward scenarios based on our own momentum volatility indicators here. Our VBS system is constantly given us 3 to 1 risk rewards in may markets. But it is not by nature a directional indicator. And that makes it hard for us to reverse when we are wrong directionally. 


Biased Bulls


The issue with momentum trades like the one we have on now is, when the market penetrates below them, you must be  fearless and get short. That is not our strong suit. We get stopped out, and wait for the next buy level usually due to our macro bias. Meanwhile as we have said here many times, the market itself is biased to be short due to market structure and  manipulation. So what is wrong with us?


Here is why we are biased bulls. We have made large profits on big moves in 1994 Silver, 1997 Silver, 1999 Gold, the Silver  spread squeeze, and various Gold rallies due to events.  And we loved it. The short side manipulators were crushed, the idiotic producers who listened to the banks were crushed, and sometimes our head ot head competitors were crushed. Those were times when we saw a flicker of fear in the eyes of the powers that be. And that is the lesson.


A Hard Learned Lesson


The lesson of this must be learned and relearned every time we put a trade on. At our worst, one time after a 7 figure day in energy one of us turned to a colleague and said  "Now I"m bullet-proof".. That was a Gartman Moment.


Four weeks later every dollar made was lost, and then we went negative. And that was graduation for us.


We book profits now. But one bias lingers. The top down approach using macro analysis to create micro trades is prone to leave the "swing trades" or short trades on the table. 


Pissing Away Profits Waiting for the Buy Signal


As of right now we are trading long above $1259 based on our previous call of that level being a momentum accelerator. This does not mean it must go up. It does however  mean that it will move  quickly away form the area in short order. So we are long with a stop below $1259 


How much money have we left on the table being married to our macro opinions? How many times did we leave profits on the table only to give them back. How many times did we ignore our own analysis? Example: Be long  above $1260 is by its very implication a call to be short BELOW 1260.


This is a  lesson for everyone willing to listen. Those successes have created a bias. And that bias makes it hard for us to play short even when the numbers tell us to be. For us trading Gold flat is almost like being short.


What we are saying is, look at Moor"s Analysis. It is perfect for people with biases. IF we stay above $1260 that is good. But if we go back below THEN don"t be afraid to be short. And the lesson here  is, always have agnostic like Michael in your analysis. This type of work is the psychotherapy for our chronic Bull disease.


Originally posted on marketslant.com