No, I should likely go back to sleep, and here’s why:
- European indexes got the scare on the Labor Day liquidity lack. Surprise factor 0, and also a lot of bad fundamental data. Yay! V2X was pushing 50 before it fell down
- US indices followed suit as soon as they opened, but traders were not willing to line up like lemmings around the edge and jump. Orderly markets, once again, full on panic isn’t around.
- Market rallies on… speculation that Obama can do something. Uh… we knew the date of his speech before. We knew he would try to talk it up. If he could have done something that creates strong pressure and moves politics in Washington… wouldn’t it have been good to do it say before a sort-of-deal that S&P said would force it to strip the holy AAA? Remember my insurance discussion, and that there is a lot of dry powder that isn’t being used. (It’s outperforming the indices tho!) Herd mentality warning signs plopping up! Buy insurance when it’s cheap and volatility is around.
So, to round off, I guess I’m giving a few licks to general volatility and gold price action. (What else?) Basically… volatility is back again, it wants sugar with the coffee it just ordered. The euro dipped below US$ 1.40, currencies in general are all over the place based on smaller news or that people are seeing small trends in them and just jumping the gun, commodities are similarly placed and you’re seeing +|3%| daily equity market moves off air, which exacerbate with lacking liquidity and downside news to 5-6% on the downside. You’re telling me you have a clear view in this market? Then you’re likely all cash, because margin is a lot more daring than I’d be willing to accept.
Gold, then? Well, it parked on Monday in the All-time-high times 0.98-0.99 region (1870-1890), which is basically saying that the bulls were confident enough that they wouldn’t allow bears to beat them, but not confident enough that the volume in Europe and Asia would be enough to absorb the sell trades that would be needed to either roll position successfully or allow quick ordered exit. Lo and behold, the market breaks 1912 into 1921, then sees extreme volatility and is now down 5% since then (last time I checked) to a level (1795) that it had previosuly broken out from (18th, 30th of August, 4 hr chart) and now bouncing slightly below the Aug. 11 peak. This could be a hook, where collectively, traders roll over, and we’ll have to wait until tomorrow’s speech by Obama to know clearly. However, note still that we are waaay above the last bottom, and that has strong support with the supported neckline backing it up plus a market move that tore the gold price down by 10% hitting that neckline like a wooden wall – a small dent, a slight yield of support, and a powerful rebound! Watch the hook, these suckers hurt in bear markets, but definitely keep your eyes open for rallies here, or put a microscope on the 1720 level.
