News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Update

After the Precious Metals Deluge

June 4, 2021 - (Gold Market Wire) - We were right to be concerned about the emergence of the profit takers yesterday, early in the European a.m. They tipped their hand, and on the better than expected US jobs news, away we went...to the downside. Perhaps, after the rally we have had, a not totally unexpected outcome, but what is important is where we go with the trading book...now.

We went to the bottom of "the Box" that we outlined yesterday, and right through it. It was a strong sell-off, but we didn't manage to hit the Fibonacci retracement that we were pointing out, which lies at $26.85. That could be our next stopping point. We are now presented with something of a difficult choice. We have to respect the horizontal, which, as per the chart comments below, we need to recover rather quickly. Failure to do so will be sign of weakness, but the 'Fib" level is just underneath, which could be a stopping point, and a potential place to add length.

...we are under the horizontal, this a.m. - not a great sign for the bulls.

Today's New York opening is going to be a big one, so be ready. The comment in the chart above is self-evident. If we don't recover, we are going to have to target the 'Fib' as a potential (only potential) place to add length. Our first buy yesterday is under water by just under 40 cents and will be cut immediately. Loss limitation is the name of the game. Our substantial length, the 2/3 remaining from the main $26.50 buy and the small length just under are still carried...but we're not liking the market right now. We're still in the money, however.

So - our first course of action will be to take another 1/3 of the $26.50 long position off here and book the profit, to scale the whole thing down. Then, we need to see if we can regain the horizontal. Yes, we can hear the shouts of cowardice crossing the airwaves, but trading is not about bravery, but riding trends and cutting losses when they occur and also taking profit. Core positions are held, regardless, until we see the bull market end. We don;t see that at all, right now - and so are focussed solely on trading.

Lightly long, scaled down, and nimble, with an eye on the New York opening. If we get a recovery into the close, on a Friday, this may encourage us to re-establish some length. But we want to see how the day rolls out. We still have news to come out on non-Farm payrolls...which is really going to be the decider. We could reverse right back up if the number for May comes in weak. The 'look' is for a build of 664k jobs. If we come in weaker, we may regain some of yesterday's losses. Of course, the reverse is also true. We don't really value the news driven cycle as a trading event, like so many do. It's too much like rolling dice. So, we scale down and wait. If people wish to play 'nimble fingers' on their mouse, alongside the release - that is up to them.

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