-- Posted Tuesday, 23 October 2012 | | Disqus
Executive Summary
· FOMC meeting tomorrow is the key.
General market conditions
There is position squaring and rebuilding before the FOMC meeting tomorrow. The current fall in commodities is partly due to the same. We expect gold and silver to rise after the Federal Reserve meeting unless there is a very positive view on US growth. Monetary easing measures are already factored in by the markets but traders will be looking forward to hints of more easing. Just remember that this is the last FOMC meet before the US presidential elections.
There should be big moves in gold, silver, copper and crude oil after the FOMC meeting. It will be a one way direction. China, Japan and other emerging nations are taking measures to curb the negative growth sentiment. The effects will be felt after a few months by way to higher growth in these nations. Europe’s slower growth rates will be offset by other nations higher growth rates. We prefer to use the current dip in base metals and further dips in base metals to invest for a period of six months to one year. Buying far dated comex copper call options looks attractive.
A BIT ON TRADING IN MCX – how to reduce losses.
Intra day trading has not been easy on MCX this year. Indian rupee volatility has made it difficult to trade in the MCX. There are times when gold prices rise in comex and it falls in MCX and vice-versa due to the rupee. After the rupee closes in India (after 5:00 pm IST), the non deliverable forward rates (NDF) rates of the rupee affects MCX commodities. Gold, silver, natural gas and crude oil are more vulnerable to rupee price movement in MCX than other metal and energies traded in MCX. When we do not know what’s happening or we are confused just trade in MCX technical. Close all your news wires and informal channels of communication and focus on technical and use trailing stop losses on your trades, I would suggest that if you are sitting on screen then keep in mind the stop loss and exit/book loss at market prices when the desired stop loss is hit. If you are a day trader then close at intra day positions before close. There are traders who carry over the intra day positions for the next day if there is a loss and book profit if there is one. This strategy will give more losses than profit in the long run. I have seen traders rolling over their loss making intra day positions for weeks and later try and average the same position and end huge loss due to margin calls. Had the intra day loss been booked in the same day one could have made profit the next day. Categorize yourself as (A) Day trader or jobber (B) Investor and follow is very rigidly. You will never incur trading losses in the long run.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani
Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.
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NOTES TO THE ABOVE REPORT
PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS REPORT
COMEX GOLD – $15-$17
COMEX SILVER: $25-$30
COMEX COPPER: $3
NYMEX CRUDE OIL: $0.60
SPOT SILVER: $0.25
SPOT GOLD: $15-$17
THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
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-- Posted Tuesday, 23 October 2012 | Digg This Article
| Source: GoldSeek.com
