Is The Gold Dealer Smiling At Me?
It was a very strange day to say the least. It really all started late yesterday afternoon when JPM announced to the world one of their credit derivatives traders [Bruno Iksil] had lost the firm $2 billion [maybe more, but don’t worry, we got it under control].
Then in the wee hours China and India released really dismal economic numbers and the market went into free fall in seconds.
After about 40 minutes of bottoming and basing the algorithm gave the buy signal in gold. But, we were too close to the low of the day for me to want to be long gold and the market was struggling to hold the very small rally off the low. So, I got long AUDUSD [one of the gold proxy currencies] and watched gold rally $6 in 15 minutes while AUD went up 1 pip. Seeing this I wanted no further part of this trade and liquidated.
I got long gold later in the day after equities started rallying. In what can only be described as getting taken to the woodshed by the gold dealer, slippage on my entry was almost $2 / oz.[yea, that bad]; getting out of the trade cost us another $0.50; and yet, we still made a profit on the trade.
In both instances I hit the buy/sell button at the right time; I wasn’t buying while it was racing up, or selling while it was tumbling down. What happened was the dealer held my order for about 4 seconds, finding the uptick he needs to fill my buy order and then later waiting for the down tick he needs to fill my liquidation order. I have complained about this so many times they don’t even care anymore. And with us leaving in a few days, it isn't like we are a high priority any more.
Here at the end of the day, the currency pairs have relatively tiny daily ranges; AUDUSD 65 pips, EURUSD a paltry 52 pips, and EURJPY only 63 pips. I got into the gold trade because the currency pairs just weren’t moving.
So, while we made a few pennies today, it could have been a lot better had the dealer not held us up. It’s amazing what can happen in gold in 4 seconds.
I received notice today that our new PAMM has been approved. I will be sending everyone details via a help file I have written. If you haven’t done so already, please send me your PAMM investor account number, because I will start sending out the help file to people on Monday. Basically, I wrote the file to help you make the transition to the new PAMM with as little hassle as possible.
Have a good weekend everyone.
-vegas
Updated Daily Cycle Charts
XAUUSD
It looks like we are in day 9 of a down cycle, but the possibility remains there was a very small 3 day up cycle in the middle of this. If that is the case we would be in day 4 of the down cycle. In any event, we are down about $100 / oz. in 9 days, and next week should produce some kind of reversal day to the upside.
AUDUSD
We are clearly in day 10 of a down cycle; usually parallels very closely with gold.
EURJPY
We are in day 12 of a down cycle in this pair.
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