Last week our short position
in gold was behaving very nicely, to the extent that we had taken off half the
position on the well established principle that we had gained a profit of more than 2% of equity on the trade. The precious metal seemed to be cruising past the
support level that was established back at the start of the month, and we were
feeling that perhaps taking off half was a little premature.
But a principle is a principle.
Then, at around midday on the 24th, gold went suddenly into reverse. The market had apparently decided thatUkraine
was coming to the fore again after a report of violence between two of the
warring factions on the ground. The Yen was similarly affected. So significant
was the reversal in gold that our entire position was closed by the Mandelbrot
routine when price reached the Break-Even level on the balance on the following
day. We are now monitoring the situation with a view with a re-entry to the
downside when the criteria for this have been re-established, according to the
requirements of the Mandelbrot algorithm.
Then, at around midday on the 24th, gold went suddenly into reverse. The market had apparently decided that
…but events only become issues when traders get to
their desks
What is of major interest is
the timing of the move. While there were intimations, albeit well within the
normal background price movement of any commodity, that something was afoot
form an hour previously, the big move up did not take place until 13:30 GMT,
which is 08:30 in New York ,
or precisely the time at which traders in that city’s institutions and hedge
funds reach their desks of a morning.
Ukrainian separatists and
their opponents are hardly waiting for the opening of trading in NY to begin
their operations. The incident that would have been the catalyst for this move
had to have taken place quite some time previously. However, the effects on the
global markets must wait, seemingly, for the orderly appearance of the movers
and shakers in order to be made manifest. Interesting indeed.
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