TRADING HAZARD

                             The Little Guy Learns Early In Life

I made a good chunk of the money, which got hijacked yesterday by the gold dealer, back today in a market that can only be described as psychotic. Pick your spot; liquidate on the spike. If you don’t, count the seconds until you are underwater on the trade.

Oh yea, add to this dealer slippage and it becomes a professionals game of hit and run. You have money on both sides that have thrown a lot at this market, and are pushing their financial weight around influencing prices aggressively.

This was the 5^th day in a row gold was basically stuck in a $20 range. We get knee-jerk spikes/drops that take us to the edge of the range and then it’s a very quick reversal to the other side. This is a market that doesn’t have any idea where it wants to go.

And just when you think there is a correlation between gold and whichever other market you watch, BAM! – whoops, sorry, that ain’t gonna work anymore.

Watching crude oil today could have made you wonder if the circus is hiring. Very tight range all day and night with 2 spikes that literally came in 15 minutes each and put in 100% of the day’s range of 156; no test of yesterday’s low [not even close], only knee-jerk buy stop induced trading after hours of nothing. Yuck. And here we are, smack dab in the middle of the approximate 18 day 104 – 108 / bbl range.

I don’t like these trading conditions any more than most of you; last time I can recollect things were like this was in 2005, where it lasted about 3 – 4 months before returning to more normal conditions. Making incremental returns isn’t why I’m in the trading business for over 30 years; but neither is losing 10% or more of my account in 10 minutes.

We simply deal with it; you absolutely can’t force things. In retrospect, this is the market’s way of taking back money you took from it in earlier periods of trading. We take what the market gives us and trade accordingly.

I may get a paper cut now and then [can you tell I’m still steaming over yesterday’s fills and action?], but for the most part I don’t give money back to the market.

Have a good day everyone.

-vegas

HIJACKED

                                          Me & Gold  - BFF!!

Getting hosed and held hostage by a dealer is no fun, and today was my day. The bullet had my name on it; the only good news is that, dollar wise, it was fairly insignificant. The gold dealer never even kissed me, instead holding my order for a full 2-3 seconds before filling me a good dollar away from where I thought I was going to get filled.

Of course after that it was straight down to my stop a few dollars away, and you have the makings of a nice hijacking. Yes folks, even I get stung by these criminals every now and then. Nothing you can do about it, as there is absolutely no rule of trading that says it can’t go a lot farther against you in a very short period of time.

So, we take the paper cut and move on to tomorrow.

Crude put in its range and I had a few trades here today; lost 2 trades made it almost all back in the next trade off the low of the day. Pretty much a wash in the 3 trades.

Rumors of China being overthrown, Saudi Arabia pumping more oil to ease supply fears, and the news from a large miner that demand of iron ore is easing in China, all factored into today’s trade.

Going forward into tomorrow I’m looking to buy weakness in crude; playing the daily ranges that have been in effect since the end of February. Instability in Iran, supply problems, and the world awash in excess liquidity are all factors in supporting crude.

Only a move below 104 / bbl. would change the overwhelming bullish tone this market is exhibiting. While gold is getting walloped almost on a daily basis, crude has a better fundamental outlook at least over the next 5 – 8 weeks as we head into the peak demand driving season for distillates in oil.

Rumors notwithstanding, I’d rather be long crude on breaks than try and be long gold and be subject to these whipsaws.

Have a good day everyone.

-vegas