Friday, March 11, 2011
Gold This Morning: It Would Be Nice if it All Made Sense --Jon
Another night of very active trade and around 0430 this morning I was shocked, shocked to see June Gold suddenly flogged like a red-headed step-child just as we achieved an overnight high of $1419.30. This concerted selling sent us down the proverbial rabbit hole for ~$14 bucks. One of these days we are going to come out the other side and truly punish these trading pariah since they seem to operate without reproach from sham or complicit regulators. So that's why we keep ourselves hedged and never, never forget rule #1 that our commodity positions are not investments, but speculations which require a strategy. Rule #2...Always have a strategy. Let's go the facts...GSR elevated slightly to ~41.00; let's call that a positive and well within the the liquidity range. RSI at the lows this morning flirted with ~50.00...we aren't oversold, but close. Open interest on Wednesday was up ~5,000 contracts and we'll see in the COT report later today who is having more than a snack on the buy side. Option vols picked up yesterday either a nod to volatility or just maybe some directional buyers seduced by the cheap leverage. Today: Deal with the facts and let's see if those who played with the chumps yesterday decide to square their positions before the weekend.