-- Published: Friday, 1 June 2018 | Print | Disqus
US president Donald Trump every now tweets policy changes first and later informs the press or media. He is Nerd American president who whose tweets and policies treats American friends and foes on the same footing. The intent of the Trump’s policy to “make America great again” is appreciable. But his ways to communicate has made him the punters favorite.
Trade tariffs on steel and aluminum products from European Union, Russia and Australia was supposed to be there in March. Later it was reversed in April. Now Trump says that tariffs will be imposed on steel and aluminum imports from European Union as well.
Last week Trump tweeted that meeting with North Korean leaders in Singapore was called off. A few days later, he back tracked on the same and now there will be a meeting with the North Korean Leaders. Gold prices rose from $1287 to $1303 as soon as news of cancellation of North Korean meeting came. Thereafter gold prices are fell but consolidating in wider $1290-$1310 range. I know a lot of people who went long in gold around $1303 only for the stop losses to be triggered.
Trump also tweeted last week that crude oil prices are abnormally high and that it needs to come down. This tweet resulted in Nymex crude oil price falling to $65.80 from $72.00. Momentum was very bullish for crude oil at the time of the Trump tweet. Massive stop losses were triggered as a result in of Trump’s crude oil tweet.
There are more or less daily examples of Trump tweets causing very high volatility in the markets. As a consultant I like the volatility. But for Trump tweets and his unpredictability global financial markets would have been a boring and dull place to trade as well invest.
Global currency trades are the biggest beneficiary of trump’s tweets and his way of communication. Before Trump average daily high-low gap in euro/usd used to be between fifty pips and sixty pips. Now it is over a hundred pips. Donald Trump has given a new life to currency broking houses and currency traders. But still sudden and knee jerk moves in the US dollar has hit speed breaker on the retail traders profit.
Gold is ever green. Gold has a lot more factors to affect its prices than Trump tweets and Trump’s policy reversal. Gold bulls should bow before Trump as he has ensured that the long term bullish forecast in gold will come in much earlier than most of us expect.
How to make the most of Trump’s tweets and policy about turns?
1) One way is to be a technical trader. Ignore very kind of news. Use trailing stop losses. Low risk traders should never any open positions for tomorrow.
2) Sit on cash. Trade/invest on sharp rise or sharp fall with very high stop losses. High risk taking ability but a calculated one.
3). Never trade the momentum due to Trump tweets. Momentum trading can give you small profits but losses are huge. The reason is that we react very late. For example, I know a client of mine who went long in gold at $1303 after the Trump tweeted cancellation of meeting with Korean leaders. He/she could have gone long at $1296 but a few minutes wait resulted in getting long in gold at around one of the highest price of the day.
4). Anticipate. How do we anticipate? I keep with myself key technical support and resistances in my mind. If prices do not fall below key support and there are no negative news at that point of time I go long with some trailing stop losses. News may or may not affect our trade. Experience tells which news can affect markets and which not.
There are no hard and fast ways to trade and invest. Algorithm trading has changed the way we trade and invest. Block chain technology is the next big disrupter for global investment market. All of us will need to adapt to block chain ways of investing along with other new techniques. Maximum profit will be there when one makes an out of the box investment. Trading and investment are like parallel line. Try not to join them.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto currency, 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
NOTES TO THE ABOVE REPORT
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COMEX FUTURES REPORT
The fall in gold prices reflect traders are sitting on cash. Trump’s conflict over imposition of steel and aluminum tariffs from European Union will very bullish for the long term for gold. Incoming US economic data releases suggest a robust economy with chances of two more interest rate hikes after June one.
HOW TO TRADE TODAY
· Technically gold is neutral zone.
· Crude oil will be news driven.
· Copper and silver will break free from the recent consolidation phase.
· Better to remain on the sidelines till Monday.
COMEX GOLD AUGUST 2018 – current price $1298.20
Bullish over $1303.10 with $1316.70 and $1329.70 as price target
Bearish below $1298.30 with $1291.10 and $1283.20 as price target.
Neutral Zone between: $1298.30-$1303.20
Jobbers aggressive buy over: I am against buying unless gold trades over $1312.20 after the release of US May nonfarm payrolls.
Jobbers aggressive sell below: Sell if gold does not break $1312.20.
· Gold can fall to $1291.10 and $1284.60 as long as it trades below $1306.
· There can be $25 either side move anytime from current price.
· A daily close below $1291 today will spell death knell for gold in the short term.
· Please note that the above view is purely an intraday view.
COMEX SILVER JULY 2018 – current price $1644.50
Bullish over $1652.70 with $1666.80 and $1685.50 as price target
Bearish below $1643.40 with $1629.90-$1616.70 as price target
Neutral Zone between: $1643.40-$1652.70
Jobbers aggressive buy over: Buy at $1642.00 stop loss $1627.10 for $1696
Jobbers sell below: No call
· Silver will break free from $1630-$1670 range and form a new range anytime.
· Sellers will be there only below $1642.
· There can be very sharp two way moves in silver anytime.
NYMEX CRUDE OIL (1ST CONTRACT) - current price $66.94
Bullish over $67.10 with $69.10 and $ $71.10 as price target
Bearish below $66.40 with $65.70 and $64.60 as price target
Trading strategy: Buy at $67.10 stop loss $65.40 for $73.60 (call till tomorrow)
· Crude oil needs to trade over $67 today to rise to $69.60.
· Seller will be there below $67.00.
· Better to remain on the sidelines today.
· A daily close below $66.00 today can result in move towards to $61 next week.
COMEX COPPER JULY 2018 – current price $306.80
Bullish over $307.80 with $312.10 and $313.40 as price target
Bearish below $305.10 with $302.10 and $299.90 as price target
Neutral Zone between: $305.10-$307.80
· Copper will break free from $301-$308-$314 range and form a new range.
· Use a buy on sharp dips strategy as long as copper trades over $299.
HAPPY PROFITABLE TRADING & HAVE A GREAT WEEKEND
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, crypto 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
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UK session starts around 1:00 pm Indian Standard Time (+5:30 GMT) -- after the release of LME daily inventories
US session starts at 6pm pm Indian Standard Time (+5:30 GMT)
PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
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-- Published: Friday, 1 June 2018 | E-Mail | Print | Source: GoldSeek.com
