OFFICIAL MOTTO OF XAUUSD
Where do I start with this POS Friday? What we are seeing is a complete breakdown of markets across asset classes, as “rate hike” fever grips the globe from Germany to Japan and then hits the U.S. this morning with rumors all over the place in the face of more grim economic statistics. “Ummm, nope, no rate hikes … hang on a sec there pal … wait, what?... how can Fed Funds futures be rallying for a rate hike? … Ummm, yup, rate hikes are on the table again … Ummm, wait a sec… What the hell am I doing?”
And so, at midday, that pretty much sums up the trading day as gold gets bounced around like a ping pong ball at a Chinese party; up, crashing down, and then spiking to the upper exhaustion lines on … wait for it … absolutely nothing but hot air and panic before moving lower again; all in the confines of about a $4 - $5 move.
Coming into this morning the range was small at $6 and change, and it didn’t look like any market was up to anything; but then “rate hike” fever started hitting the stock indices and the $4 “up/down roller coaster” ride was on in gold. For my part I didn’t do any trades today for the simple reason the range was just too damn small; hell, even a move of $1.50 and you’re only a couple dollars away from a high/low for the day. Sure, there were some algo trades you could have made for a very small profit, but I can handle the consequences of missing them for a bigger range.
But, I think gold is in real trouble up here in the 1330’s, at least up and until the FED and Kuroda & the boys at the BOJ get done with their madness in about 2 weeks time; while we may tread water up here, the action in the marketplace has me concerned.
There is no question in my mind that the manipulators [FED & BIS] and their bullion bank accomplices are making a “line in the sand” at the 1355 – 1370 price area, and the action of the last 3 days really confirms it. Coming back from Labor Day Holiday, this past Tuesday saw gold have an almost $30 range for the day, with the close only a couple of bucks off the high closing right around 1350. Since then, it’s been straight downhill, and today we find ourselves well below the important 50% retracement level that should have held.
Not only has it not held, even the Asian perma bulls aren’t buying the last 3 days! Directly below, the trouble brewing on the HR1.
I bring this up, not because I am some kind of gold guru, but simply to point out that if we get below the 1310 – 1315 area next week or the week after going into the BOJ & FED meetings, you have to be very, very careful about being long with a stop below the market; the potential is very real for one of the manipulators to drop $5 - $10 billion in gold notional [10,000 – 20,000 futures contracts] and blockbuster this shit lower anywhere from $10 - $30 in a couple of seconds. And guess what? Any sell stop you got is going to be filled at the bottom, and what you thought was going to be a $3 loss tops, becomes a $25 hole in your head from the shotgun blast, thank you very much manipulators.
I see this as a very real possibility, for the simple reason next time down into the 1310 – 1315 area, a lot of traders will be in BTFD mode with tight stops to “protect” them. If this comes about, it won’t be an easy ride down into this area, but once there, it could get ugly really quick; a lot quicker than most of you realize.
What we have seen these last 3 days is nothing short of a “bullion wall” of selling from bullion banks & dealers; you would think there would be some kind of test of the 1353 high set on Tuesday; but instead, only the most very modest of rallies have come about in Asia, home of the almost always “buy gold all the time” mindset, and those got sold rather quickly in Europe even before we opened here in the U.S. In other words, commercial selling has “smothered” the living shit out of gold this week. Why?
I seriously think the FED is going to raise rates on September 21, and the BOJ is going to “talk back” some of their easing; both will have immediate and negative trade ramifications for gold, and I think the bullion banks know it and have been told this is the case.
It only makes sense when taken in the construct of the fact that the bullion banks & dealers need to be the buyers of the $10 - $30 waterfall in prices from the manipulators market sell order; they can’t be seen as sellers, only buyers, because when the “fingers” get pointed from the clueless regulators the banks & dealers will say, “hey, not us, we were buying not selling.” But the key is, they have to get short a shipload of gold first, and they have done that this week in spades.
In addition, the FED has painted themselves into a real corner with loss of credibility; they very much feel the “slings & arrows” of those who “pooh poohed” their idiotic rate hike “dot plots” in early 2016 [Remember those? There were supposed to be 4- 5 rate hikes this year.]. They are being led by a clueless Grandma, who I think is about to “shock & awe” the stock market with rate hikes, and at least for the short term, gold right along with it.
The new crude oil algorithm manual and mq4 files will be up on the website sometime tonight; as always, if you have questions/comments drop me a note at firstname.lastname@example.org and I’ll get back with you ASAP.
Have a great weekend everybody!
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