Fast Up & Fast Down
I had one trade today that produced a small profit. Slippage is still an issue in the marketplace on fills and there isn’t anything I, or anybody else, can do about it. Position squaring ahead of tomorrow’s European events has influenced the market today.
From minute to minute, gold is becoming like the infamous Dr. Jekyll. No price level is safe, and once the momentum of a move, no matter how short in duration, is over you can expect fireworks in the other direction.
What looks good one minute looks terrible the next; price is moving rapidly in an environment where traditional technical indicators, that give traders a sense as to direction, are utterly useless.
The main reason I revised the algorithm is due to this phenomenon; buying breakouts or relying on momentum isn’t going to work when large traders [legitimate or manipulators] are on the “hunt” and look to influence prices in the short term. Today’s range [as I write] of $16 seemed a lot bigger due to the very fast ups and downs throughout the U.S. session.
What’s amazing is that in the last few weeks Asia and Europe have gone AWOL from trading. Extremely small ranges have become common as we enter the U.S. session, thus giving no hint of what is to come when trading starts to get active around 7:20 A.M Chicago time.
Part of the reason today seemed choppy and somewhat muted is the fact that tomorrow is a big day for Europe. France and Spain are auctioning worthless 10 year Government notes tomorrow in what is perceived by the market as very important for investor confidence.
Spain especially is facing a debt crisis that the Euro can ill afford to go awry now that Greece is off the front page. A bad auction [higher interest rates] from both and the “risk off” crowd will be out to sell every asset class in sight [including gold]. Expect the Central Planners to do everything possible to make it appear these auctions are successful. After all, the Ponzi must live.
Have a good day everyone.
-vegas
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