IS THE MARKET OPEN NOW?
Of course, as with most “shoes” there’s always another one to drop, and a few minutes later the selling commenced to take us again to the exhaustion lines. Directly below, the 2 trades of the day per the algorithm with the market price below the daily calculated horizontal white line.
Now, isn’t it amazing that with nothing going on, the market literally “dead in the water”, no volume to speak of, and we’re sitting around the 1337 level, somebody decided to just sell 10,000+ futures contracts at the market; even a second grader could tell you doing something like this is not in your best interest in getting a decent fill. Exit question: what if the seller didn’t care about price? Which begs the next question: what kind of customer doesn’t care about price? Short answer: one that can hit the “CNTRL-P” button for margin and losses and only looks to 1) enrich the bullion banks & dealer community with front running news so they can already be short and buy on the way down so as not to be accused of causing the move lower and be labeled a “manipulator”, and 2) absolutely crucify retail sell stops and hurt customers that trade this market expecting a liquid market. “Hey rube, how dare you short our policies and thus be long gold and try and make money off of our stupidity?”
All of this, I think, was prompted in large part by the recent FED minutes showing many of the voting members wanting a discount rate hike last meeting; they fell one vote short of that. And with so many traders & investors long gold before even the Brexit vote, it’s a “slam dunk” a few million people peeked at the daily chart and thought, “Yup, that 1330 level is a great place for my “protective” [protective? Really? Protect you from what?] sell stop on my long position.”
Now, we look to the psychological level of 1300 – 1307 area, and if that goes, we could see a pretty sharp move down to the 1275 level rather quickly; I could see this happening if 1) ChairSatan Yellen’s Jackson Hole speech to be given Friday is “hawkish” on rates, and second if the FED pulls the trigger at the September FED meeting. Before that, though, we get the NFP on Friday, Sep. 2, and we all know what total bullshit this number can bring to trading.
Right now, what the market needs to see before it can rally in the New York session, is an Asian & early European sell off, followed quickly by a move lower as New York opens, followed by a rally that then takes out the days high and expands the range. Market rallies almost always start as short covering first, and then when there isn’t any selling to speak of to take it lower, market momentum changes and the buyers show up; until we see this kind of scenario, any early rally in New York in gold will be met with selling.
Have a great day everybody!
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