Friday, February 2, 2007

A Few Mid Morning Comments

I was talking to a friend last night about trading and he asked if he could come over and see what happens. I told him it would be boring. Well this morning has been anything but boring. Since most of my attention is focused on trading futures, it has been quite busy here.

Gold futures: I was long and things were looking great.. then bang it hit $655 (April) and sharply pulled back. I was stopped out at $661. What could I do, but go short. I waited until $655 and bagged the drop down to $650... all this in the space of about 2 hours. By way of full disclosure, I continue to accumulate shares of GLD with the profits I make on these futures trades minus the purchase of Rolaids.

Here's one story that's weighing on the gold market today:

The establishment will do anything, I mean anything to keep the price of gold down. Gold is like the cashier at the front of the store who embarrasses the kid at the register for a loud price check over the PA system for condoms or some other item he shouldn't be buying! When gold rises, and it had been up every week so far this year, it signals that monetary authorities are losing control of things.

But let's get this straight right now. IF the IMF does sell 400 tons, it will be quickly absorbed into the market. Sending gold down to April contract $650 represents a great buying opportunity and I can't wait for Sunday night. But there are already doubters about any such sale:

I grabbed about 30 cents of the NYMEX crude gain earlier and jumped out. The energy market has been playing around with the previous day's pivots pretty much all week; so I may actually go short - may, if crude weaknes a bit more.

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