THE MELT UP

                                          Liftoff In 5…4…3…

Well, thank you “Weimar Ben” for striking the gold match yesterday and getting us [hopefully] out of the low volatility environment we have been finding ourselves in for the first few weeks of the new year.

Nothing like a nice $60 rally in afternoon New York trading to get the party-hardy Asian traders back from the eternal celebration. Now, if we can only get the Europeans to follow suit: well, I can dream can't I?

Yesterday’s explosive move after the Fed minutes [which by the way were released early] quickly took the algorithm from “sell mode” in to “buy mode”. We got our first buy signal at 12:15 AM [Chicago time] at 1710.79. Stop was initially placed at 1707.70.

After spending a few candlesticks holding steady, the market moved up to a high of 1714.64 [bid] before backing off. After moving above 1714, I raised my protective stop higher to 1712.29. I therefore had a “free trade” going in the early stages of trading.

With the explosive move in gold the day before, I knew at some point today some profit taking would be inevitable, and I wanted to insure at the very minimum I would take $1.50 out of the market.

With the very next candlestick, the market started “leaking water” and my stop got taken out. Gain on the trade was $1.50 / oz.

Now I have a decision to make. Do I go back in later on another buy signal [if we get one] or do I stand pat with my $1.50?

It’s an easy decision. I accept the grind that is trading most days. I know “The Power of $1.50”, and I do not want to give back anything to Mr. Market after this big move in the last 24 hours.

I simply don’t care if gold is at 1710, 3310, or 310 an oz.; what I care about is "buying 1 and selling 2” so to speak. I don’t care about “missing something” in terms of price action: exactly what am I missing? I don’t care about price action, I care about making money for the day! I know from experience NOT to get caught up in buying or selling frenzies that distract me from my goal: the systematic accumulation of cash in ever greater quantities each and every day.

Did the algorithm deliver?

“Yes, it did.”

“Now it’s time to do my job and walk! Like I said, an easy decision.”

Have a good day everyone.

-vegas