Confessions Of A Gold Trader

UPDATE 10:05am EST: Good morning rats – Wal-Mart decided to finally give back to the community – ours that is of course as the earnings warning was sufficient to drop us through 907. I have a feeling we’re going to see that sucker again though soon – so stay on your guard.

Just a general observation about why you need to be extra careful picking your entries with Gold. Look at that chop and as you can tell from the rest of the chart, this is not an isolated ocurrance. I have learned this the hard way – the only way to trade Gold is to either daytrade it or take positions based on a long term perspective. Which is why I often wait weeks for just the right spot – the most defensible position – anything in between is pure razorblade chop.

UPDATE 10:54am EST: Guess I was right about us seeing our ‘old friend’, the 907 RL, again very soon. FYI – the NQ is near a its 1242 pivot, so let’s see what happens here.

UPDATE 12:08pm EST: Ugly tape today – chop chop chop. I don’t sense any direction. Would prefer if the bulls would step in and get that consolidation rally over with already, but so far no dice. It’s another swing trading day.

If we finally consolidate to the upside I expect to hit some serious resistance around 916 or 922. Also note how nicely our fibs line up with those retracement levels. Coincidence? I think not!

UPDATE 12:39pm EST: It’s like watching grass growing today. I still think we’re in for a late day rally – this consolidation is looming and I have seen this ‘chop before you pop’ before.

Here’s my favorite Yen/Dow futures correlation chart. Both are swapping punches right now and the stochastics is stuck around 50%. Something’s gotta give but unless it does just wait – let the market come to you.

UPDATE 12:45pm EST: I’m watching my quotetracker futures chart and just saw the index futures move up along with the Yen futures. Very very strange stuff happening right now…

Anyway, unless we breach that 8655 pivot on the YM futures I don’t think we’re going anywhere today. This is my line in the sand right now and I would probably dip into an ES or NQ futures contract if/once we bust through this one.

UPDATE 1:11pm EST: Dow pivot to bulls: ACCESS DENIED! We are now touching the ES 896 S1 pivot. Let’s see if we get a bounce here. Finally we’re moving!