-- Posted Monday, 19 April 2010 | | Source: GoldSeek.com
By: Gene Arensberg
HOUSTON – The trading scars we all bear are reminders that the technical aspects of trading are very important to a short-term position trader. Survivors of the trading battlefield are the ones who learn not to fight the market. When the market isn’t doing what you expect, then it’s time to get cautious … to get defensive … until the “market comes to its senses” or until we do.
Those of you who took a driver’s ed course in the early 1970s may remember a 16-mm movie we youngsters at the time were compelled to watch. You may remember a somber-faced announcer at the beginning of the movie, looking straight at the audience. Speaking in an authoritative baritone, the announcer got everyone’s attention right at the beginning. “Look around you,” he said. “Some of the people in this classroom are not going to be with us ten years from now. They won’t be with us because they are here!”
With that the scene cuts to a very large cemetery with a burial ceremony in progress. The focus begins with a crowd of mourners obviously in shock as a young victim of an auto accident is laid sorrowfully to eternal rest. As the camera slowly panned-right, across a forest of tombstones, the announcer went into his message about how safe driving was all about defensive driving. About not getting cocky, or being reckless and most of all, watching out constantly for – and getting away from - those who are dangerous.
Now, nearly forty years later, it is difficult to remember everything in that scary movie, but one sentence from it is forever etched into many memories:
Announcer: “That graveyard is full of people who thought they had the right-of-way.”
How true is that in driving and in a whole host of life’s experiences? One can be dead right about something fundamentally, but just plain dead if not careful to avoid those who are reckless or intent on ignoring the fundamentals.
Are we cautious? Yes, absolutely - most of the time. Are we sometimes too quick to run to the sidelines? Yes, we veteran traders do that sometimes.
Just below is the short-term gold graph with this weekend’s annotations.
To answer a couple of email questions, yes, we are moving our trading stops up on the SEC v Goldman news (see the graph above) and no, we would not have moved them up from the $1105 region had that news not surfaced on Friday.
We fully expect gold to bounce back sharply on Sunday night (tonight) in Asia and to catch a quick short-covering bid here in the U.S. Monday, but what if we are wrong? What about our hard-won profits since our February re-entry into the gold market?
The short side of the gold battlefield (whom the U.S. regulators have given an edge via virtually unlimited exemptions to futures position and accountability limits), often probes the price lower in order to trip trailing and trading sell stops. Who can blame them for doing that? If the government gives you an edge, shame on you if you don’t take advantage of it, right? What good is a CFTC-sponsored trading advantage if one doesn’t use it from time to time?
The above is an excerpt of web log update of GotGoldReport.com. To continue reading please click on this link. And thank you for doing so.
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The above contains opinion and commentary of the author. Each person should study the issues carefully and, as always, make their own informed decisions. Disclosure: The author and/or his family currently holds a long position in SPDR Gold Shares, net long iShares Silver Trust, long the following “Vulture Bargain Hunter Stocks” mentioned in this report or within the last year: Timberline Resources (TLR), Paragon Minerals (PGR.V), Forum Uranium (FDC.V), Odyssey Resources (ODX.V), Terraco Gold (TEN.V), Hathor Uranium (HAT.V), Gold Port Resources (GPO.V), Bravo Venture (BVG.V), Millrock Resources (MRO.V), Atna Resources (ATN.T), Riverstone Resources (RVS.V), Premium Exploration (PEM.V), Constantine Metal Resources (CEM.V), Canadian Shield Resources (EXP.V), Rye Patch Minerals (new) and currently holds various (approximately 15) other long and occasionally short positions in mining and exploration companies. The author receives no compensation from any company mentioned in this report. To contact Gene use LLCCMAN (at) AOL (dotcom).
-- Posted Monday, 19 April 2010 | Digg This Article
| Source: GoldSeek.com
