High velocity trading

BRENT got more liquidity and more hedge funds trade in BRENT. So that's purely for those reasons.

This is an important news headline regarding GOLD

A Gold Rush Wanes as Hedge Funds Sell

For the better part of the last two years, some of the world’s biggest hedge funds have been piling into gold, betting the precious metal would provide an effective hedge against inflation or be a safer place to park cash as equity markets around the world stumbled.

But to the surprise of many investors, when equity markets across the globe tumbled once again on Thursday, gold moved sharply lower as well.

Gold futures for September delivery fell $66.30, or 3.7 percent, to $1,739.20 an ounce in New York. It was quite a turnabout for the metal, which has been soaring in recent months amid the turbulent stock markets.

Hedge funds, which have been ratcheting down their positions in gold futures since early August, were quickly named as the culprits in the latest sell-off.

Some traders said that hedge funds were beginning to unwind, or close out, what has been a very popular and profitable trade for the last 18 months as they bet the dollar would fall and that gold would rise. In the last month alone, the euro has fallen nearly 4 percent against the dollar amid worries about the European debt crisis.

The sell-off in gold was part of a broader move in the markets that had investors shifting away from perceived riskier assets, like commodities, and into the dollar in reaction to the Federal Reserve’s announcement on Wednesday of its new stimulus program.

In addition, the Fed said that there were “significant downside risks” to the United States economy, which sent several commodities, including crude oil and copper, tumbling on Thursday on fears of a global slowdown in demand.

Other market participants said hedge funds were selling their positions in gold to raise cash to meet increased capital demands for their borrowings from Wall Street banks as the assets they have put up as collateral, like other commodities or stocks, have declined sharply in value.

“On the one hand you have a lot of strength in the U.S. dollar, historically gold and the dollar do trade inversely,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “The hedge funds are long gold and they need to raise cash and it looks like they are definitely selling some gold.”

Others say some hedge funds may be selling to meet redemption requests from investors who have been spooked by the recent market volatility and fear a repeat of the problems of late 2008.

“A lot of investors are waking up to the realization that something is off. We’ve seen Goldman Sachs close its flagship fund, legendary hedge funds are down sharply, and I suspect we’re going to see significant withdrawals from some hedge funds this year,” said Michael A. Gayed, the chief investment strategist of the investment advisory firm Pension Partners.

“The tendency for individual hedge funds or anybody is to sell winners before they sell losers. What’s been one of the few winners this year? It’s been gold,” Mr. Gayed added.

Still, some are not yet ready to call the end of the gold rush. Even with the pullback, gold remains one of the most profitable investments this year with a gain of 22 percent.

Some strategists have even predicted that gold will reach a record of above $2,300, which it hit during the early 1980s when adjusted for inflation and translated into current dollars. Likewise, the world’s largest exchange-traded gold fund, the SPDR Gold Shares, fell 2.6 percent on Thursday, but remains up 22 percent for the year.

Gold, whether through futures contracts or via exchange-traded funds, has been a popular investment among some of the world’s largest hedge funds. One of the best known “gold bugs” is John A. Paulson, whose firm, Paulson & Company, is the biggest shareholder in the SPDR Gold Shares ETF. But many other hedge funds have embraced the metal as well.

After peaking in early August, hedge funds have been reducing their exposure in the gold futures market, according to Mary Ann Bartels, the head of United States technical analysis for Bank of America Merrill Lynch.

“A lot of speculators were very long in July,” Ms. Bartels said. “But they’ve been taking it down ever since.”

http://img841.imageshack.us/img841/6...h423092011.png

H4 Gold telling the same story. If 1634 breaks we will reach 1550 then.

Hi RuffRyders.

I have a question i cant find the answer on the internet.

On the front page of FF, we can see "Liquidity is 5% › Avg"

What is that and do you consider this in your trading ?

No not really, I don't think you can use it for trading. This means that more players are right now in the market, which can result in more volatility.

SOLD XAU USD NOW

Best idea now to wait for break below 1650. If you like 1647 is a good level to short sell GOLD.

1647 is a good entry point for short gold, how you get this entry price ?

More important is the target. target is 1668 - 30 = 1638 now.

You don't need to see S/R. There are natural S/R levels on gold. Some are weak some are strong. The 1647 is a weak level = meaning that price will slide though this level easily. 1653 is September S1 level = strong support level. I'm short selling here small lot on my own risk with a very tight stop.

I recommend to short sell, once the S1 level is cleared. 1647 is 6 dollars below S1 and is a good level to short sell, once PA breaks S1 @ 1653.

Hopefully this makes sense.

sorry post was meant for other thread.

ok guys 1600-1620 is up next on GOLD. Crazy markets for sure!

http://img202.imageshack.us/img202/1...3092011pt2.png

Updated BRENT chart. Next up 94-96.

anybody took that trade? I closed out already for a more than decent profit!

ok guys rolling up the week for myself, it's time to enjoy better things in life, I'm out for the Friday night dinner. See you soon!

Well...i had to go away from my desk and i dont open trade when i cant babysit them! lol

But...that was a nice call and im mad i missed it!

Enjoy your dinner and enjoy your week end!

Cheers!

last chart to consider, before I get out. it's W1 EUR JPY.

http://img51.imageshack.us/img51/553...ly14092011.png

I think EJ is on the way to 90, currently it's 103. Yes, it's 1300 pips from now on, however the PA looks like it wants to go that way!

hy ruffryders

in Gold i started with 1685 short,and the brent trade is go down at 1.388.

Have a nice weekend

Guys, here's the requested template, which I'm using myself.

just put tpl into templates of your MT4 and ex4 into indicators folder.

b-clock is candle timer
shi channel - is a shi channel - very flexible, check it out
floor pivots weekly - best weekly pivot indicator that I know of
pivot 4 custom timeframe - can display weekly, monthly, mid pivots, etc.
I use this to display monthly pivots.

Hope this helps, if not let me know!

http://img231.imageshack.us/img231/8...d124092011.png

On GOLD I maintain my view. Strong bearish Friday close, meaning we have not reached the bottom just yet. Not a good time to go LONG. Only short sell rallies. Once 1550-1600 is reached looking for price action to go sideways and attempt to build higher lows setup to even consider going LONG.