Thursday, March 8, 2012


                           Trading The NFP; Guess Which Is You?

Tomorrow is NFP day, so fireworks will commence at exactly 7:30 A.M. [Chicago time] when every financial market will go totally schizoid.

Remember, there are lies, damned lies, and statistics.

With Chalky Soetero’s reelection in full metal jacket mode, the fix is in at the BLS. How many more people will they take out of the labor force and how many “seasonal adjustments” with the birth/death model will they add to pretend employment?

Consensus is about 125K added to payrolls, so we will see what happens.

The other event risk of the night is the Greek PSI – what percent of the bondholders are willing to take an 80% haircut on hundreds of billions of dollars in Greek Gov’t debt? Early reports today put it at over 75%; what if it isn’t? Expect some volatility if there is a negative surprise.

Although there have been some really bumpy days in the last couple weeks, I’m starting to see gold trading return to normal mode. The algorithm should be OK to trade from here on out. I think things are close enough to normal.

With today’s trade in gold, in spite of the NFP tomorrow, daily ranges seem to be expanding, and that helps the algorithm. If only the lemmings in Asia would stop buying gold every single session, we could actually get some superior signals to trade.

Of course, having said that, tonight should be no different than every other night and expect gold to test 1710-1715 before they are done. If the NFP is perceived as negative, expect some big gaps down as JPM & HSBC take over.  We’ll see won’t we.

Have a good day everyone.


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