We have entered the market:
Position: Long Apr Gold
Entry: 1603
Stop Loss: 1582
With gold oversold in the extreme and bouncing off support at 1600, we have decided to take a long position.
We would caution that this is an aggressive move and against the prevailing trend, however, those who want to join us can do so at their own risk!
G20 and USA holiday (President’s day)
The G20 is meeting this weekend. Regardless of what they tell you it’s obviously going to be about CURRENCY WARS. If they go to a currency war things can sure get nasty. That is not what they want to do. SO THEY WILL PUT TOGHETER THE BEST FACE. Government leaders and CEO’s of big companies didn’t get to the top of the heap by telling the truth. In fact that’s not their job. Their job is to instill CONFIDENCE. And that’s what they will do. They are fully ready to lie just like the boss you have at work (most bosses, not all).
I’ve zoomed out the hourly chart so you can see the channel in its fullest. There are three major points on the chart. The 1620-1630 area---the 1590-1600 area and the 1540-1565 area are the three points of most important support. We are at one of the very important areas right now. It is an area that I’m saying could very well provide a temporary low and a good bounce. BUT IT IS ALSO AN AREA THAT COULD PROVIDE A RARE GAP DOWN in price when things open up on Sunday night.
Buying in the 1620-1630 area certainly can be a low from which a rally can develop to 1660. As we move into Friday it comes down to one big thing in the short term and that is the G20 meeting this weekend. The question is do I want to be long this weekend with them deciding on global monetary policy and everything else that goes along with it?
IN OTHER WORDS IS IT WORTH THE RISK?
The odds favor that we will see a low and a bounce but they are only odds and not absolutes. The thought of buying at this level is tempting. Not only that it stands a good chance of providing at least a temporary low and a good bounce. We could hit 1620-1629 today and get a good bounce up and close above 1640.
The other side of the coin is this. Don’t think for a moment that those who control this market don’t know about these price levels because they do. They know that TRADERS and everyone else who looks at charts are all watching this area. That means they know that there’s going to be those who will try and buy this area. Thus they have two choices. They can let this area be support and allow for a bounce into next week and then make their decision. OR THEY CAN TAKE IT DOWN deep enough on an intraday basis to stop out the ones trying to pick the bottom so that they will have to cover their position on a stop loss. Once they have done that they will mark the price back up and fast back to 1640 and that will keep the players on the sidelines waiting to buy the pullback. China will be back open on Sunday night and the buying could come in.
If just about everyone waits then they will make it the bottom and make the chart look pretty as a double bottom. But if everyone tries to pick this low they will push it down far enough and make them let go of their position. The other option they have is to not crack the market on Friday. They could wait until Sunday night and gap this thing down and have it open at just above 1600 and let the stop loss orders take care of the rest.
Another of their favorites is to let price support at 1620-1630 and let people get on and then have it close right near this area by the end of Friday setting up the market for whatever they decide for when it re-opens and the G20 have made their statements on what the new plan is to stop the economic world from imploding. They will say what they have to in order to try and bring confidence into the realm. GAP down prices don’t happen often but the most likely place they do happen is at inflection points. TO MAKE MATTERS MORE IN THEIR CONTROL GUESS WHAT? THE US MARKETS ARE CLOSED ON MONDAY FOR A HOLIDAY. That means they have full control and there will be hardly any liquidity. IT IS NO COINCIDENCE that these things are set up in this manner.
What is the biggest reason why everyone ends up losing their money in trading? IT IS BECAUSE THEY ALWAYS FOCUS ON THE POTENTIAL GAIN and NEVER THE POTENTIAL LOSS. I have not had many trades because frankly I have been bullish gold and in retrospect I don’t like to short a bull market. But at least I can say I haven’t lost my shirt trying to fight this bear trend and we have remained for the most part bearish thru almost all of this downtrend.
Sometimes having someone who advises you and SAVES YOUR ACCOUNT from massive loss is better than someone who has you just in every second that a low seems to be in place only to have it turn back down. Once the account money is gone its game over. That is why so few survive. They are always in the market because the action is so addicting and we have all been PROGRAMMED TO THINK gold is going to 10,000 dollars because of the global situation. While it may be going to 10,000 it doesn’t mean you won’t get wiped out along the way.
Before the big run up to 875 in 1980 gold had a 50% CORRECTION and lost ½ its value. If we add just a zero to the 1976 gold price then the correction went from 2000 to 1000 and then to 8750. Where are we today? Well the top was 1922 just 78 dollars from 2000. While history doesn’t have to repeat it sure has a way of coming close lots of times. If gold is going to 10,000 don’t think they the control boys are going to try at LEAST ONCE TO SHAKE off those who are on board. If we get a repeat of 1976 then gold is going to go from 1922 and lose ½ its value and then turn around and move up 8 fold.
While I am not making that prediction, 2013 stands to be the most likely year if there is to be a major correction.
But let’s get back to right now. IS IT WORTH THE RISK TO STAND IN FRONT OF THE G20 MEETING AND RISK MONDAY MARKETS BEING CLOSED IN ORDER TO HOLD A HIGHLY LEVERAGED POSITION IN GOLD WHEN YOU CAN’T TRADE IT OR IS IT BETTER TO WAIT UNTIL TUESDAY and if you have to buy it at a higher price at least you can get in or out?
Even if you are in Europe the low liquidity means that GAP DOWN moves in seconds like they can initiate is possible.
There is a reverse also to this. Let’s say the news is BULLISH and you’re in the USA. That means that gold will rally without you and by time the market opens up on Tuesday the price could be 50 dollars higher. As much as that would really suck it’s not as bad as having to get out 50 dollars lower on TUESDAY if it goes the other way.
I CAN ASSURE YOU OF ONE THING. MOST ADVISORS WHO ARE TELLING YOU TO BUY HERE DON’T PUBLISH THEIR TRADES and track record of advice and results. What they do is the one time out of 20 that they pick the bottom they go on and on about it. The funny part is the market makes them heroes.
Have you ever noticed how your hear how many times someone keeps picking the top and the bottoms of markets and has been right for 13 years about gold but as soon as you subscribe the magic (and your account) is gone?
Trading and making money is not easy and it’s such an addictive thing that it is very easy for money to vanish much faster than it’s made. Most of the time there’s only a handful of trades that make the difference in a whole year. The other part is when to STAY OUT AND WORRY ABOUT LOSSES and not gains.
Remember the big run up this summer from 1626 to 1800? Guess what? We are back to 1625.
Do I think we are going to get a bounce from 1620-1630? YES. But they are odds and not absolutes.
What I can’t do for my own account is stand in front of the G20 and hold a position this weekend and have the markets closed on Monday to top it off.
Therefore I am telling you that there is a chance of 1620-1630 being a potential bottom point. Now, it could be 1618 or 1615 but it’s an area to consider if you must trade and you must try and pick the low.
But be aware that the market can test 1600 and 1570.
The fact is that we are in a downtrend so trying to pick the low at a critical zone such as this one where the acceleration can be big is dangerous. It’s that simple. It’s dangerous.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
