Thursday, April 12, 2012


                                     It’s The Way Gold Trades

Melt up melt down it doesn’t really make any difference; same crap different day. I said yesterday I thought we were just in the eye of a hurricane.

“Batten down the hatches mate!”

Welcome to centrally planned trading; the only thing we don’t know after today is the price level from which Weimar Ben, the boys at the JPM prop desk, and the dealers privy to the inside info are plotting the next waterfall. Because tomorrow is Friday, don’t look for anything but position squaring into the weekend.

But come next week, all the sell stops that have been set today from long positions, will get taken to the woodshed amongst the wailing and gnashing of teeth. I’m guessing the high number from which selling commences to be something just short of maybe $1695, but hey, they don’t email me and ask for my opinion (yet).

“I know, I know, the charts look good right now. But they will make their own charts and make you think we are headed to zero; you’ll sell and that’s that.” I got recent history on my side.

To any normal observer, you could take the daily chart, show them the $29 daily range today and they would say, “Wow, must have been a lot of action today – you know up, down, all over the place huh?”

“Errr, not exactly.”

Ebb has left “Green Acres” and hasn’t been seen since 2011; Flow is in charge. The dealers cover and then back away; the public piles in along with some [chumps] hedge funds; the dealers sell along with the Fed [yes Dilbert they are in the market]; momentum dies away and the market drifts lower; selling ensues and your sell stop gets hit. Rinse and repeat forever dude; it’s the new paradigm.

Fact is the majority of the day’s range happened in 45 – 50 minutes; the rest is just noise and a few stops. The recently updated and revised algorithm missed getting long at the bottom today by about a buck fifty; close but no cigar. Sometimes you miss some. I still made a little, but not what I wanted because I didn’t get in where I really wanted to.

But the point I want to make is that you are either there when it moves or you ain’t; you aren’t going to get the opportunity to get good fills and pick your spots. It’s either elevator up and the doors just closed with you 5 feet away, or it’s a rowboat over the waterfall and the next 200 feet down are going to be interesting; this is what we are faced with in today’s marketplace.

So, don’t expect Ebb to help you; fear that Flow might kill you.

Have a good day everyone.


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