Happy Equities Send Gold Below $900

Gold fell below $900 as equity traders took their happy pills. However, even a return of risk appetite was unable to boost Sterling.

On a day of mixed fortunes my biggest frustration was in missing the gym, so as to ’stay in touch with the market’, and then staying pretty much out of touch. I checked my 21-day moving averages, and my ADX trend indicator, but the only trades on the radar were equity shorts, and I didn’t fancy that. I tried a couple of early trades, selling GBP/USD, then buying EUR/GBP, but what I made on one I lost on the other.

This theme was repeated later on, winning on a long FTSE (^FTSE) bet, making some drinking money on a long gold bet and losing on a long GBP/USD bet. Phew!

I’ve dabbled with long FTSE trades two or three times over the past few days, but ran a tight stop against a strong trend and consequently was stopped out for small gains. I left it late today, but paid 3619 for a touchy-feely £1 long bet. At the time of writing I’m still in there, with my stop at 3659 to make sure of a small gain. Just at the moment the index is toying with resistance at last week’s high of 3690:

The market is way overbought on the intra-day charts, but I guess this is more about the pain trade, squeezing those bears, at the moment.

My gold trade was as half-hearted as the attempted rally from the $900 support level. I’ve traded short gold positions a few times recently, just nicking the odd Dollar here and there. But when the price fell to $900 I bought £2 at $900.3, looking for a reaction bounce. Pah! The price bounced as far at $904 (it might even have tickled $905 when I wasn’t watching), but there was no conviction to it, so with equities flying I sold out at $903 for enough for a round of drinks.

Gold continued to fall, dropping back below $900 and is currently wallowing around $894. I’m going to wait and see if the price closes below $900 tonight; if it does I’ll look for the price to target $880-890, and if that fails to hold, the 200-day moving average at $857.

The less pretty trade was a long bet on GBP/USD, placed at the wrong time. Although Sterling had been improving throughout the morning, I held off as there was no trend and the price was still below the pivot point. But as GBP/USD pushed ahead, through its pivot point and the $1.39 big figure, I used a pullback to buy a £1 bet at $1.3889. I was happy to run this one with a wide stop as I expected Sterling to benefit from a return of confidence to the markets. But somehow that hasn’t worked and although I’ve kept the trade open I need to remind myself of a similar situation in EUR/GBP last Friday!

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