The only reason LP banks don’t screw you on Christmas Day is because the markets are closed; any other day … well … you’re fair game. Which brings me to gold, and more specifically why you shouldn’t be in “Holiday” markets to begin with, unless you have some kind of death wish.
So, what does getting screwed look like? Well, if a picture is worth a thousand words, the following is a pretty good definition.
And you know, things were going along so slowly, hardly anybody noticed that at the Asian close, somebody most likely noticed a very large buy stop above the market … and who can blame [besides me] the fund manager? After all, gold has been down 7 weeks in a row, the longest losing streak since 2004, and if you’re short maybe you are feeling a little uncomfortable staying short … who knows what he/she is thinking. However, LP banks being LP banks, and bullion dealers being bullion dealers, somebody knew there were buy stops above the market, and at what level. So, what better time to “explode things” than right at the close of a totally non-descript Asian session.
“Here’s your buy stop fill at the top … Happy Holidays! Please come again!”
A three minute “slam job” followed by seven minutes back down, and we’ve been lower ever since … yes, a nice fair and liquid market right? As I have been saying for weeks, the absence of a large retail spec presence is hurting the gold market … and don’t forget, plenty of hedge funds and hedge fund managers are butt hurt as well [“Crispin Odey, please call your office”]; and when bullion banks “smell blood” they go after stops with a vengeance. Just make sure it isn’t your blood.
Another market day, where USDJPY didn’t escape from its 40 PIP trading threshold until well into the New York session; something that tells me to leave it alone in Holiday mode; ditto for gold since last night’s fund manager slaughter. Time for the beach … until tomorrow …
Have a great day everybody!
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