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Thursday, September 1, 2016

HOPIUM FOR DOPES

GET YOUR TRADING TRUTH RIGHT HERE!



Ok, so let me get this straight; every economic indicator released the last few trading days has seen numbers that make economists nervous [unexpectedly of course] about the economy; if it were a Repub regime, they would be screaming all over CNBC about a recession, but since it’s “The One”, President Empty Suit, they let it pass. And in all of this, I’m somehow supposed to believe the “fairy tale” NFP report tomorrow shows an expanding, growing economy, good enough to justify a rate hike in 3 weeks?
Because, what gold has been telling us since J-Hole, and comments by Fisher et al, is that rate hikes are coming, and you’ve seen gold get monkey hammered from the 1340’s pretty much straight down to 1302 and change this morning; throw in the fact that one of the world’s largest shippers [Hanjin] has just declared bankruptcy, and what we are truly seeing is a world wide mess economically. And with all that, I’m supposed to believe some dumb-ass FED Pie Hole with “dot plots” showing me the upward glide path for rate hikes going forward into 2018? Seriously, did you vote for Obama and just can’t get rid of the “hopium” you are hooked on?
And just as a side note; “Christ, it’s about time the stock market woke the hell up and started going lower, regardless the “Plunge Protection Teams”, because the world is very much going to hell very quickly!”
Which, brings me to today; coming in, I’m asking myself if the bullion banks & dealers got enough resolve to push gold below 1300 and take out some serious sell stops from everybody long since Brexit; if they do, what does that leave for tomorrow? If the fairy tale number tomorrow is “strong”, wouldn’t you want [as the most desirable scenario if you are a dealer of bullion bank] to see a gap lower by $15 - $30 per Oz. and be able to fill all the saps retail stops on the bottom? If you take that “ammo” away today, what’s left for the NFP release?
So, I’m ready to react to whatever they decide to do, and for a while it looked like 1300 would eventually get taken out; but funny things happen in a probabilistic world don’t they? First up, gold moves higher in Asia and then drifts lower in Europe, so coming in we are a lot closer to the lows than the highs, which if you remember, I’m telling you most of the time the U.S. session “unwinds” and goes the opposite direction. Second, the market gets blind-sided with the horrible ISM numbers at 10:00 New York time [49.4, a contracting economy, with new orders plunging] and gold “melts up” $5 in seconds.
Up to this point I haven’t done anything because there isn’t anything to do; move down to 1302 sees about a $9 range, not enough for me to buy that mini-waterfall at the time; from the double bottom low, we get a short covering blitz taking us up to the exhaustion lines before running out of steam and settling back towards 1306 – 1307. At this point, the market is sitting right on the daily white horizontal line, thus making me very suspicious of buying when the plum slope line turns up very near yellow.
And as I sit here I’m thinking, “Ok, this is probably it for the day, but I’ll wait for the ISM numbers at 10, and after that see whatever reaction there is, and if there isn’t much going on I’ll hit the beach about Noon and wait it out until tomorrow’s NFP number.” When I saw the number, and the resulting $5 spike, I’m now on “beach hold” because what I’m now looking for is a move lower so that plum comes close to yellow and the slope changes; this time we are well above the daily white horizontal line, and probability wise, if I can get the trade I want, I don’t see how they can move this stuff lower into my stop before I take a profit. Below is the trade.





So, again today, like I said yesterday, look at how well the exhaustion lines predict in real time short term tops and bottoms; say whatever you want, you can’t argue their effectiveness for trading purposes.
The KEY TO EFFECTIVELY TRADING GOLD IS DISCIPLINE & PATIENCE; if you don’t have it, you won’t do very well. Because of the very erratic nature of the trade, the manipulation by the bullion banks at the behest of the FED & BIS, the spread, and finally pricing by the dealers, you have got to be buying on the way down [at the turn] and most definitely selling on the way up [forget whatever happens afterwards] if you want good fills and profitable trades.
Seriously folks, I don’t care if I’m right about my opinions on price; I could care less if they make me look like an idiot. The only thing that matters is profit, and the algorithm will give me that pretty much every single day. “Hey, it’s still not Noon yet! Time for the beach! Tomorrow is “stupidity day”; follow the rules, make the appropriate trade[s], and leave with profits. Until tomorrow …
Have a great day everybody!
-vegas

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