Gold Update

 

 

 

Trader Scott’s Market Blog

October 9, 2016

 

 

 

 

There have been numerous stories over the weekend deciphering/guessing what happened to gold last week. What a complete waste of time, energy, and focus. Another in a long list of reasons why so many struggle in markets. I’m in markets/my goal is to (hopefully) make profits as often as possible. Focusing on all of the ancillary nonsense has zero positive influence on me meeting my goal. Those of you who have been reading this blog for awhile know that (in the big picture) I am mainly focused on the overall TREND of the market. And also (if there has been no major ENDING ACTION of the overall TREND) where/when are the higher PROBABILITY/lower RISK entry points into the market in sync with the bigger TREND. That’s a mouthful, so basically it means for example in gold currently, I believe the major trend is up, and we have seen no major ending action.So I want to identify those good (sometimes great) entry points in harmony with the UPTREND. Meaning I want to identify the better/best places to enter buy orders.

On Patrick and Sharon’s show on Friday, Open Phones Friday, (scroll down that page to listen) I called in to give a quick market update and also to give an update about buying gold into the 11:30ish AM sell stop run courtesy of the strong hands and “manipulators”. Let me explain the thought process. I have been posting this chart of gold for several months. It’s the same chart (cleaned up a bit) which I use. I kept repeating that the $1252 support area (actually, for me it’s always going to be below the support area to lower the RISK even more) is the first decent area to enter longer term purchases (and shorter term trades) – below $1200 is a much better spot to enter for longer term. But below $1252 was a good probability entry point. And I believed there were a lot of sell stops below $1252, so when I saw the stops being triggered, I entered some buy orders – long term “nibbling” physical and also an ETF trade. And I talked about it a few minutes later on the show, late in the second hour.

So for an investment, I’m not trying to “pick a bottom” so to speak, I’m trying to identify the good/better entry points (low/lower RISK and high/higher PROBABILITIES) into the market and combined with being in sync with the overall TREND.(Very short term trading is mainly about SUPPORT and RESISTANCE points.) And I’ve mentioned this area in gold many times as a good area to potentially enter buy orders. So my suggestion has been this – if you have little/no gold, then use the $1252 area as a place to buy, but keep some funds available, because there is a much better area marked on the chart around $1200 (preferably below $1191). I do believe there will be a retest of the December 2015 lows, but at a much higher low. But if you have a lot of gold already, just nibble at $1252, and wait for below $1200 and a better time frame later in Q4 to deploy funds. So on Friday, I took my own advice and “nibbled” on physical gold and I also did a short term trade of an ETF into the sell stops. (For a more detailed view of the mechanics of the running of the sell stops, and the technical situation over the last few days, here is an annotated 5 minute chart.) As for gold currently, that was a good short term ending action, but there was a lot of volume and I do believe the $1243 lows will be re-tested.
So to wrap up, I am not trying to “pick bottoms”, so to speak. I’m trying to identify (ahead of time) the better/best entry points into a market in sync with the overall trend. That’s how I can be prepared and can anticipate/act (not react) if a good opportunity arises.
I don’t believe that we have yet seen the lows in gold from the reaction off of the July high. But all I have control over is when/if I enter and exit a market. And I want to enter at what I perceive to be the better/best places. Below $1191 and later in Q4 is an even better place/time to enter, but in a bull market we often wait for the more “ideal” entry points which never appear. If a better opportunity arises, I hope to deploy more funds.

 

 

About

img_0074bwcrsmTrader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.

 

 

 

 



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'Trader Scott’s Market Blog – Gold Update – October 9, 2016' have 4 comments

  1. October 9, 2016 @ 7:17 pm Randal Magnuson

    Thanks for the informative post and the link to video which helps to understand ending action. Keep up the good work. Randal

    Reply

  2. October 12, 2016 @ 10:11 am GOLD MANIPULATION | Junior Gold Report - Featured News Articles

    […] the potential for it to occur and also by learning when it might occur. This is discussed in a recent post and I provide a very short term chart showing the mechanisms at work last week – as the strong […]

    Reply


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