Last Person Leaving Turn Out The Lights

Zzzzzzzzzzzz.

Sums up pretty well today’s trade in gold. Sellers tried a few times to take it lower but couldn’t get any traction. With NFP [Non Farm Payrolls] from the lying BLS [Bureau of labor Statistics] showing little surprise, most traders shrugged their shoulders and said, “What am I doing here”. With Barry Soetero hiding out in Cannes, trying to export to Europe his magic touch to solving the Euro crisis, there weren’t many other headlines that mattered enough to move the market.

Without further ado, today's candlestick chart explains everything.

OK, maybe not, but it certainly felt like it.

Being the investigative trader/blogger that I am, I left the office early to have lunch with former Treasurer and Chief Accountant of MF Global, Inc. I am of course referring to Jethro Bodine. I caught up with him at his favorite restaurant and what follows is my in depth coverage of the MF [appropriately named I think] bankruptcy.

Vegas: “Jethro, nice to see you. Please tell my readers what you know about this mess. Can you tell us what happened?

Jethro: “Sure vegas, we stole the money. Can I get some fries too?”

Well, there you have it.

[Note: Regulators from the SEC, CFTC, as well as uber-exchange CME were invited to this lunch, but all expressed regret that an official investigation is currently under way and commenting would be inappropriate.  That and the fact I wouldn’t buy lunch for them, kinda sealed the deal.]

Today was the kind of day a new, or undisciplined, trader easily could have gotten into trouble. Not the way you think though. It’s price action like today that make it easy to trade by-the-seat-of-your-pants and make money. A dangerous, false sense of security that this is what trading is about. I can assure you it isn’t.

The BSFG algo didn’t produce anything of significance today. About a wash really, depending on how and where you got filled. Might have made or lost a few pennies either way. No matter, days like this are to be survived. They happen, and we deal with them.

Have a great weekend everybody..

 -vegas

Politicians Speak, Gold Moves

Posting a little early today, as the algo made us a wad of moola early on in the day. Why risk giving it back?

 WTF people, what do you want me to say? BSFG Algo played the gold market today like a conductor with the symphony orchestra. Gains were over $25/oz. What the hell are you waiting for? Download and start taking advantage of one of the few genuine offers on trading you will ever get in your life.

Why trade gold?

It is one of the only markets where greed and fear are the main fundamentals. Ok, you can make a case that gold has an industrial and jewelry use, but it is small and doesn’t account for the rapid ups and downs in the marketplace on a daily basis. It is ingrained in most people to be the ultimate store of value. And that my dear amigos is why we trade it.

Asia continues to trade mucho standard deviations of volatility compared to normal. I’m not complaining, but I wish they would save some of this firepower for late Europe and US sessions. Politicians continue to be clowns in the marketplace, with their every action, sending prices all over the place. If you think Barry Soetero is a moron, his counterparts in Europe and Asia duel daily to see if they can outdo “The One”.

As long as gold maintains daily ranges over $30/oz. we will most likely clean up almost every day. So, let them run their collective mouths: it’s good for business.

As a reminder, we don’t buy high and then sell the break, or vice versa. Patience is a virtue when it comes to gold. Somebody, at every given moment when the market is open, is getting their nuts squeezed. A painful reminder of why prices move as they do.

Have a good day everyone,

-vegas

What a Week To Start

                         MF Global, Inc. Compliance Department

After a somewhat extended hiatus, I'm glad to report I'm back [better than ever of course]. The title kind of says it all this week: The largest futures broker in the world, MF Global, Inc., declares bankruptcy, the Euro is about to get "Greeked", and the Fed basically has told the world it has no clue what to do. Other than that, not much going on.

Gold was all over the place today; starting at the lows and rallying to put the high in around 1744 and then on the Fed "minutes" dropping rather quickly to 1719 before retracing almost all of the drop. My BFSG algo picked up most of the first rally out of Asia, so no need to get involved when Weimar Ben took over around 1 PM.

Trading near support/resistance levels continues to be dangerous, as hedge funds and dealers are running the stops on a constant basis; gaps of over $2 can be seen in a second. I continue to preach about not putting your stops in obvious technical situations; you are just asking for a lousy fill.

Overall, gold is pretty well supported and I most definitely prefer to buy on the breaks. So, how do we do that? Best strategy is in the algorithm. Download it now at the link.

More comments tomorrow as I get into this.

     -vegas