RACING TO NOWHERE

                             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.

WATCHING GRASS GROW

                        Yea, He’s Related To A Stupid Idiot Trader

Forget the fact I screwed up a sell limit order [in MT4] in EURUSD and made it a market order. OK, I go to change the stop [after I’m in the trade] and I make that a market order to liquidate. Some days I couldn’t operate a water fountain at the circus; “oyyyyyyy”.

“Hey vegas, how long you been in the business?”

“Obviously not long enough.”

Aside from the $45 screw up, nothing really happened today in any market. Gold put in a pathetic $16 range [take away the mystery tick high and it was more like $13] and trading was pretty much confined to about a 1 ½ hour window. After that $9 up $8 down, it was zzzzzzzzzzzz into the close. I guess since the Central Planners didn’t come in at 7:20 A.M. to crush it the short covering commenced; when that was over it was straight down and gold gave back pretty much everything it had gained.

AUDUSD had a range today, but 50% of it came in 1 second on an employment report. EURUSD was pretty much dead with only a 56 pip range.

A day to forget. Oh, and a day to reread the MT4 manual for some of us.

As a reminder, if you have a PAMM investor account, email me with your PAMM investor account number so I can send you the help file for the transition to the new brokerage house in the next few days.

Have a good day everyone, and I promise to stay away from sharp knives.

-vegas

TRADING SENSE

                                        Gold Trading Today

I don’t like trading in a casino environment. If I wanted gambling I’d go to Las Vegas; I would definitely have more fun.

Today was one of those days when I was right and lost money. Why? Because gold has gotten to the point where accurately defining risk management is almost impossible. Forget $3 - $5 stops, you will get stopped out all day long with these; maybe forget $10 stops.

Gold [during the U.S. session] is moving so fast, and trades in such a chaotic fashion, that trading it is like playing craps. You are up $2 one second and down $2 three seconds later. It’s pretty much like this the entire U.S. session regardless the daily range. Meanwhile, the usual stop hunts are always a threat and dealer quotes are out in left field with slippage a huge, huge problem.

I’m going to position trade more of the currency pairs as we move forward. I can better accurately define risk in AUDUSD and EURUSD, and get better profitability than gold. Right now, gold is a total trading mess.

Usually, AUDUSD correlates pretty well with gold; not tick for tick, but the broad moves unless you have some specific news on the biz environment out of Australia. Today for example, I bought AUD and made a small profit, whereas if I was in gold I would have gotten stopped out when it dumped $6 from where it was when I bought AUD. I was able to hang in with the currency trade because the currency pair isn’t trading like gold is right now; a lunatic teenage girl.

My point is that risk in gold is getting completely out of control. I’m not risking $10 to make $0.50. I can handle and deal with tenths of a percent loss [which I had today]; and I know what happens to traders that risk 10% or more of capital on a trade [they are gone]; don’t get me wrong, the currency pairs can definitely hurt you if you don’t manage the risk properly, but they don’t go 30 – 50 pips in seconds all day long [up and down] like gold has been doing.

I’m still doing paperwork for our new PAMM. I’m expecting approval sometime early next week. If you haven’t done so yet, and you are in the PAMM, please email me with your PAMM investor account number and I will make sure you get my help file next week that will make the transition easier for you. There is information in the help file you will need when making the transition.

Have a good day everyone.

-vegas

TUG OF WAR

                                       Welcome To Trading

A price debacle in gold today as all support from the 1600 – 1610 area got taken out in minutes. There were some buy signals from the algorithm but I ignored all of them but the last one. I didn’t buy gold; instead I used a currency proxy. Why? Because down here sub 1600 and down $40 on price, if I am wrong and the dealers gap this stuff lower, they are going to take us out back and shoot us on price.

And since we aren’t exactly valued clients anymore [adios US amigos], what leverage do I have arguing for price adjustments from the brokerage house? Yea, exactly: Zip. Zero. Zilch. Nada.

Most of the time, the gold dealers will give you your stop price if it gaps through [unlike futures which definitely don’t because there are no dealers only orders from others] your stop. But they don’t have to; there aren’t any guarantees. And the very last thing I want is to get butchered on a sell stop even though it is probably a low probability. It wasn’t low enough for me today.

That and the fact that I can only imagine what the slippage would have been from the dealer as things were flying all over the place.

Currency proxies don’t work 100% of the time of course, but I noticed early on today that EURUSD and gold were correlating pretty strongly. I made 3 trades today in EURUSD; 2 produced profits and one was a loss, netting out a profit of a few dollars. Granted, it isn’t much, but if I had been trading gold I don’t think I would have been profitable.

I have finalized an agreement with another brokerage house for our new PAMM. I have some paperwork to do and some documents to send, and the new PAMM should be ready by some time next week. I’m in the process of writing a help file for you to make the transition as easy as possible; I’ll be sending it to you when the new PAMM is ready to accept our business.

If you haven’t done so already, and you are a PAMM client, please email me your PAMM investor account number and I will send you the help file when appropriate.

I’m really excited about our new home; the pros definitely outnumber the cons and most importantly slippage will become a thing of the past; that means more money for all of us.

Have a good day everyone.

-vegas

MARKETS PERPLEXED

                                 Pretty Much Sums It Up Today

All the action today was in early Asia, as financial markets reacted to the elections in Greece and France.

Gold opened the day with a $6 5M candlestick [1642 – 1636] and as I write this we have a $10 range for the day. And, if it wasn’t for a very brief stop hunt, the daily range would have been only $8. Throw in wide spreads [what else is new?] and the usual dealer games, and what you get was a boring day not worth trading.

Looking at the currencies, I had expected to see more down side action after the initial low in EURUSD in early Asia. We got short and took profits as the Euro bottomed and turned around. From there [1.2980 area] not much happened the rest of the Asian session.

Trading in the UK [London] was closed today for Holiday; therefore action in the European session was definitely muted. We saw some short covering going into the US session in the Euro, along with a rebound in world equity markets, and this theme continued with no real action other than short bursts.

With all markets open tomorrow, things should get more volatile given the news of the weekend.

So, we ended up with about a 0.2% gain today.

I’m still in the process of doing paperwork for our new PAMM; I’ll have more information later.

Have a good day everyone.

-vegas

DAILY CYCLE CHARTS

Here are the daily cycles as of Friday.

XAUUSD

It looks like we are currently in day 5 of a down cycle. As I stated on Friday, the chart patterns in gold make me very nervous.

EURJPY

With the gap down in the EURUSD from the French and Greek elections over the weekend, and a risk aversion rise in the Yen, this pair has a gap lower opening and is currently in day 8 of a down cycle.









AUDUSD

AUD is currently in day 6 of a down cycle.










Have a good day everyone.

-vegas