I’ve been long Gold since last September, and my trade finally went the way of the dodo Friday.
All trades eventually die, and this was a pretty great one by my standards (most of my winners are 1-2R). I had the trailing stop loss at the monthly lows as per my plan (I bent my rules by swinging for the fences here, but I believe that was justified).
Which brings me to my point. There is ALWAYS a clue that something is rotten in Denmark. In this trade it was a couple of days ago, when community member and pro trader Richard ‘Max’ Walker emailed me about it.
The clue is worth examining.
We had a very high probability long setup a few days ago which was never filled.
This is particularly relevant given that the trigger candle was a hammer candle, which ought to have brought buyers out of the woodwork.
You can now make a decent bearish case as well as a bullish case. Good time to stand aside, in my view.
Other things on my radar for the start of the week. US Dollar is threatening bullish trend change, and since the currency markets have sucked the last few months this might be a chance for them to get in gear again.
The other big news is a confirmed trend change in bonds. 30 year, 10 year, TLT… they are all fucked and far from home.
The CBOE 10 year interest rate market shows it clearest. Successful retest, the market thinks interest rates are going to rise in the future. Reversing a 30 year trend.
Big news indeed.
Enjoy your day
Scott
