REMOVING THE CURTAIN FROM OZ

                  Keep Your Daughter Away From The Metals Dealer

“We’re off to see the Wizard, the wonderful Wizard of Oz, because because because because [pause and take a deeeeeep breath] for all the wonderful things he does, la la de de la la ……”

The only thing that would make today perfect poetic justice would be if George Orwell wrote “The Wizard of Oz”. While most people think the movie was just a kiddy flick starring Judy Garland, actually it was meant to be a scathing indictment of The Fed, FDR, and the confiscation of gold by Big Brother in the 1930”s. [Go ahead, think about that for a minute.]

So today, while Europe’s elites rejoice because they are spinning a successful Spanish 10 year note auction, the European bond market has ripped the curtain off its hinges and told Europe what they really think.

Not to be outdone and wanting very much to be a part of the action, the Central Bank Gold Cartel [with the altruistic help of the front-running JPM prop desk to be sure] were out in force early today selling the gold market down into the low 1630”s. When they backed off, all it took was 55 minutes for the real market to send gold prices $17 higher into a new high.

While I have a certain amount of “Schadenfruede” in seeing them get their butts handed to them, the thing to remember is that they don’t care about profits and/or losses. They aren’t traders, they are manipulators. If they can get you to lose money, or stop you out of a position, they win.

But that doesn’t mean they go away; it’s too late for that and they have gone “all in”. If you buy the upside breakouts, they are going to win.

When you pull the curtain back and see where market reality is, you can take advantage of their arrogance, their methods, and ultimately their sheer stupidity of the history of gold.

Meanwhile, in Socialist Amerika…….

                             Patronizing The Kool-Aid Drinkers

In the last 48 hours Chalky’s minions have made much ado about Mitt Romney’s dog Seamus, who he allowed to ride on the top of the family car in a kennel cage. Chalky’s operatives have been trying [unsuccessfully] to paint Mitt as a dog abuser.

But finding out that Chalky actually ate dog as a kid by his own admission has kind of turned things around.

In the spirit of “fairness”, I present the following:

                                          Please Just Pet Me

Have a good day everyone.

-vegas

NOT EVERY POOL IS THE SAME

                                  Playing With A Metals Dealer

No way to sugar coat today’s action in gold; it just plain stunk the joint up.

Our friend, the FWD [Flying Wedge of Death], came knocking today and in the process made life miserable for many traders. I made money today, but that's not my point. I don’t want to be redundant in my posts, so no sense repeating all the problems the gold market is experiencing from a trade standpoint.

Round up the usual suspects for stop hunting, slippage, and $5 - $10 moves in 10 – 15 minutes. Rinse & repeat; go the other way with a vengeance.

“Oh wait, never mind – excuse me while I take it $5 lower in the next 2 minutes. Sorry about your stop; my daughter needs ballet lessons it is unfortunate.”

Not much else to say except Meanwhile In Washington:

                                      The Empty Suit Speaks

Have a good day everyone.

-vegas

INNOCENCE FOREVER

                                   Cute & Fuzzy Metals Dealers

Is it any wonder I hate NFP [Non Farm Payroll] Fridays? Why, what can possibly go wrong in a shortened trading day going into a weekend? I mean, those cute & fuzzy dealers will just do everything for you to make trading a pleasant experience don’t-cha-know.

“Excuse me sir? Yea, you don’t know me but I’m a metals dealer, and I just dropped by before NFP to see if you’d like some chocolate chip cookies I baked this morning?”

“Super, take all you want!”

As always, the “fun” begins a few minutes before the report hits at 7:30 AM [Chicago time] every first Friday of the month.

But first, a subliminal message from MR. MARKET !!

                                     Follow This Advice Please

Who says we can’t put in a $20 / oz. range in 15 minutes?

Oh, but wait, the “fun” is just beginning. On the rebound rally from the low, in case you wanted to sell, the MetaTrader 4 trading platform goes down for about 200 seconds. When it comes back up the rally is over and we are $4 / oz. lower from the relief rally high.

“Silly rabbit, selling rallies in a freefall market is for dealers, not for retail traders. By the way, how are those cookies?”

Now for “fun” Part Deux; “Hey, anybody up for a gap inducing stop hunt?”

“Hey man, we’re really sorry about that stop you had at 1742 and got filled at 1736; market forces don’t-cha-know. Hey, how are those cookies?”

Of course, the machines don’t magically go down on the rally from the bottom at 1732.

So, as you recover from the self-inflicted wounds of a NFP Friday, ask yourself why you even let that “innocent” guy in the door and took some of his cookies.

Have a great weekend everyone! [Go Patriots.] Catch my comments on today’s PAMM trading [posted every day between 2 PM – 4 PM Chicago time] at my PAMM website; http://vegaspamm.blogspot.com

-vegas

THE DEALERS THEY ARE A HURTING

                                Let’s Shed Tears For The Dealers

How can you tell trading in gold has become so bad that even the dealers are losing money?

“Please everyone; hang on a sec while I wipe a tear from the side of my eye. OK, I’m better now.”

“You mean in spite of the fact that ranges are tight, volatility low, and prices spike and drop dollars/oz. at the drop of a hat?”

YUP.

Take a close look at the spread between “bid” and “offer” in the spot market and what you will see is a market “being made” not at $0.25 - $0.35 but at $0.60 - $1.00.

This will tell you 3 major things:

1)      The dealers are getting “picked off” by the bigger players in size and can’t recover the cost of providing the necessary liquidity so they have to take any measure they can to continue to make money. Therefore more space in the spread,

2)      There isn’t enough volatility in the market to make up for getting “picked off”. What we are seeing is price action within tight daily ranges, with moves coming quickly between the high and low, but not breaking out to expand the range so they can make money on exposed positions, and finally

3)      You’re retail and won’t notice.

                                          Listen Up Dealers

“If any of you dealers out there who read my posts care to send me your whining details at vegasxau@ymail.com I will send the obligatory roses and a cheese log roll [at my expense of course] to your prop trading desks to help ease the pain.”

For the rest of the world, just realize the money “games” these vultures play when trading. As I have said repeatedly, the single most important element of trading that will make you money is “volatility”.

And when the dealers get like this, it reminds me of chop-chop floor trading amongst “locals” [exchange floor traders] who would stick a sharp knife in their own mother’s back to make $10. Noise levels increase, tempers go north quickly, fights break out, and commercials and dealers sit and are LMAO while enjoying the show.

Trading day details later today at PAMM website: http://vegaspamm.blogspot.com

Have a good day everyone.

-vegas

TRADERS GET CHICKS !!

                                    Really? Even Me?

 MADE YOU LOOK, MADE YOU LOOK, AND AGAIN,  MADE. YOU. LOOK..

Well dear friends, it is once again Friday.Time for a little introspection into what you shouldn’t have done during the week.

As BFSG Algorithm traders already know, I preach about NOT putting stops where dealers, banks, and large hedge funds act like general surgeons operating on you without anesthesia. Big money loves to stop hunt your order.

Metals Dealer Badge of Honor: Check For The Decal On The Front Door

About an hour and a half after the Asian open, gold pooped its pants and dropped about $20 in just a few minutes. Having cleared out all the retail sell stops, dealers very quickly bid the market higher. If you got stopped out, and wanted to re-establish your long position, you had to pay up, and pay up quickly to get back in. A classic gold  market stop hunt.

Let’s take a peek at the charts to see what I mean.

                               XAUUSD 1 minute candlestick

The large red candlestick spike down is where the action took place, and as you can see between the red horizontal lines, the market dropped $ 8 in the 1 minute candlestick. In actuality, it took about 2 seconds. If you had your stop anywhere between 1753 and 1750, your stop got filled at 1744.

Thank you very much and please come again.

To get a better perspective from a time standpoint, here is the 15 minute candlestick. As you can see in the highlighted area, the market was in a very tight range before they took it lower.

                                XAUUSD 15 Minute Candlestick

Exposure to stop hunting is one of the biggest dangers when trading gold. You need to be very careful in placing your stops so your account isn’t “hunted”. If you buy/sell correctly, your entry point won’t need anything more than a $3 - $5 area for your protective stop-loss.

                                           This Is Important

Position entry is the most important determining factor in making a trade. If you get in badly [price], your stop will reflect this and your stop level will, by necessity, be farther away than it should be. If it gets hit, you will lose more money than necessary.

If you aren’t getting good entry points, then maybe it’s time you discovered “The Vegas BFSG Algorithm’. It’s free; what are you waiting for?

Friday’s Action & Weekly Wrap-Up

As I stated yesterday, the algorithm moved into sell mode. Therefore, today we were looking for rallies to sell when the algorithm gave the go-ahead. There were a couple of trades after the Asian open, and the net result was about a $2 - $3 / oz. profit. Once again, not a great day, but it beats losing.

Once the market started rocketing higher, all shorts had been previously covered and there was no other sell signal the rest of the day. Here are the week’s approximate results:

            Monday           + $ 30 /oz.,

            Tuesday           + $  7 /oz.,

            Wednesday      + $ 11 /oz.,

            Thursday          + $ 36 /oz., and

            Friday              + $  2 /oz.

            Total Week      + $ 86 /oz.

                     Don't Worry: Market Will Be Open Next Week

Don’t get mad that you missed it. I just want you to realize though, that if you had an approximate account balance of 10K, 5 days ago, and were trading a 1 lot [100 oz.], which is the proper leverage, you made about $8,600 for the week. FOR THE WEEK !! 86% FOR THE WEEK.

When’s the last time you made 86% in a week? Yeah, that’s what I thought. If I was you I’d be upset too.

Did we miss a nice move on the upside on Friday? Yeah, so what? It’s an opportunity cost, not a capital loss. Don’t forget the difference between the two. Remember, the primary purpose of the algorithm is to KEEP YOU OUT OF TROUBLE. After that, it makes you money.

Time to wind down and enjoy the weekend. HAVE FUN EVERYONE!!

 -vegas