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Alert: Gold Setting Up For A Three Day Bounce (NYSE:GLD) (NYSE:AUY) (NYSE:ABX)

Posted by Aadil on January 25, 2011 at 7:00pm
Gold has been hammered over the last couple weeks, after making all time highs.  The SPDR Gold Trust (NYSE:GLD) has fallen from an all time high of $139.54 to a low today of $129.07.  This fall has been categorized by bearish flag pattern after bearish flag pattern playing out to the downside. It has been classic.  While gold has fallen sharply, it now is entering a level where it may find some solid support. In addition, many gold stocks have fallen to their 200 moving averages on the daily charts. This also tells us there may be a bounce in the short run.  Just to make it clear, this is not a long term bounce, just a bounce over a few days that may start today or tomorrow.

As discussed above, some gold stocks are hammering into major support on the daily charts. Not the charts of Yamana Gold Inc. (NYSE:AUY)  and Barrick Gold Corporation (NYSE:ABX).  Both have fallen dramatically in recent weeks but now sit on the 200 moving averages.  In addition, the fact that gold now sits on solid support, things seem to be in order for a bounce. The GLD has major support at the $129.00 level, hit today.

Gold is a tricky commodity to figure out. It relies on two major factors for its pricing. The first is the easy one, the U.S. Dollar. When the Dollar moves up, gold usually drops. The second factor is bearish sentiment. When investors and traders get extremely bearish on the markets, money runs into gold for safety. This recent drop has been headed by market optimism, rather than a move higher in the U.S Dollar.  To gain more insight, market analysis, swing trades and education, join the Research Center.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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A Healthy Psychological Profile is Needed for Successful Trading

Posted by JamieD on January 17, 2011 at 2:47pm
Excerpted from Van Tharp's Peak Performance Home Study Course

Many mental health professionals define an "uncertain" condition as being stressful. Uncertainty occurs because of too much information or because of too little capacity. The very fact that we cannot deal with available information is stressful.

Available trading information far exceeds one’s capacity for making basic trading decisions, so one can only attend to some of this data. Limited capacity is a major factor in trading success and in understanding stress.

Three factors are essential to successful trading:

1. a healthy psychological profile,

2. the ability to make accurate decisions from a large amount of information, and

3. money management and discipline.

A weakness in any of these areas reduces one’s capacity for processing information, resulting in stress, poor trading decisions, and losses. Losses, in turn, can produce stress, resulting in more losses. Readers who have taken the Investment Psychology Inventory Profile™ may recall that their test results were split into these three major areas.

A Healthy Psychological Profile

A healthy psychological profile might easily encompass all aspects of trading. However, certain psychological characteristics appear distinct from decision making and money management.

Everyone has a different set of past experiences. As a result of those experiences, one develops certain attitudes toward life. These attitudes may be open or restrictive. Open attitudes produce growth, encompass change readily, orient people toward self-improvement, and produce happiness and success. The successful trader, for example, might describe himself as follows:

I enjoy life to the fullest. I am constantly exploring new ideas, visiting new places, experiencing change, and having fun. I try to get everything I can out of life, and I eagerly look forward to each day.

I am in the best of health because I eat proper foods, get plenty of exercise, and sleep well. I am never overly stressed because I do not feel pressure—only challenge.

Although an open attitude is not essential to trading success, most successful traders are quite open. An open attitude will help a trader in the market because it enhances information processing capacity. Although the successful trader still has a limited capacity, his attitudes toward life keep his capacity at the highest possible level.

The losing trader, by contrast, often has a closed attitude toward life. Part of this closed attitude includes a number of defense mechanisms against winning, such as the fear of success or the fear of failure. Any form of defensiveness results in isolation, building protective walls, and resisting change. Consider the following statements that a losing trader might use to describe himself:

I am really unlucky. Every time I try to trade, something goes wrong. I end up losing. Other people make it impossible for little guys like me to be a winner. Perhaps that is why I am so depressed all the time. Money sure has been my downfall.


Trading is very stressful to me, perhaps because I worry about what will happen all the time. But I also worry about what will happen if I get out of the markets. I’ll probably never be able to get ahead in life.

The losing trader has closed himself off from the world. Some information still gets through, but it is all darkly colored by his restrictive attitude. His closed mind severely restricts his capacity for dealing with information, and he feels "stressed."

This is only a brief introduction to this concept. To learn more about the relationship between stress and capacity, and how this relationship affects you as a trader, refer to Chapter V in Volume Two of the Peak Performance Home Study Course for more
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So you want to be a trader?

Posted by Spreadbett on January 15, 2011 at 2:31pm

Quick distraction from exams.... I STRONGLY recommend all those new to this site/trading in general read this article and the article linked within it:

 

http://www.proptraders.net/so-you-want-to-be-a-trader/

 

http://www.articlealley.com/article_44528_63.html

 

Ok it refers to futures prop trading, but the principles are still the same!  Those looking to go into prop trading will find proptraders.net pretty handy too, lots of useful info.

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The rise in U.S. stocks and Treasury yields suggests that the mood in the financial markets has improved but we beg to differ. - Kathy Lien

Posted by Aadil on January 15, 2011 at 11:47am

What the developments today tell us is that there are more risks to the global economic outlook than most of us would prefer. Active efforts by China to tame inflation could lead to slower growth while consumer spending in the U.S. has failed to live up to expectations. The recent increase in price pressures is a problem that most countries around the world are struggling with. China has responded with an RRR hike, the European Central Bank is talking about the possibility of raising interest rates if inflationary pressures are too strong while the U.S. is left standing on the sidelines. If the global economy was performing well, inflation would not be a major problem but central banks could soon find themselves in the tough situation of taming inflation at the expense of growth. The latest U.S. economic reports reflect the ongoing pressures on the U.S. consumer who is highly indebted, out of work and forced to deal with higher prices. Don’t expect next week’s economic reports to make investors feel any better.  Manufacturing data could show additional improvements but the housing market has been one of the weakest parts of the U.S. economy and we do not expect any major upside surprises in next week’s housing data.

 

http://www.fx360.com/

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The Fed, China, and Friday (NYSE:GLD) (NYSE:SCCO) (NYSE:IAU)

Posted by Aadil on January 14, 2011 at 5:27pm
This morning was another day filled with economic news across the globe. Last night the important Shanghai Index sold off by over 1.30 percent as China raised its bank reserve ratio by 0.5 point. This move by the People's Bank of China (Chinese central bank) comes as the country tries to bring down its high inflation rate. India is also facing extremely high inflation as their inflation rate rose to 8.4 percent in December. Other nations such as Thailand have recently raised interest rates in effort to try and further cool off the high inflation levels. 

The rate increases in the Asian markets are certainly one of the major catalyst for the recent sell off in gold, silver, and copper. This morning spot gold is trading lower $22.00 to $1365.00 and ounce. The highly popular SPDR Gold Shares ETF (NYSE:SPY) is trading lower by 0.89 cents to $133.15. This decline in the GLD comes after a sharp decline yesterday afternoon. Southern Copper Corp. (NYSE:SCCO) is also trading lower by just 0.6 cents to $46.31. Copper stocks all declined sharply yesterday afternoon and could be under pressure again today.

The important consumer price index (CPI) was released this morning in the United States. The CPI was 0.5 percent. The core rate was up just 0.1 percent. It is important to realize that the core CPI excludes food and energy. What else is there besides food and energy in the real world? In any case there are food riots going on around the world and this report is telling us differently. It might be time to get a better economic gauge for the economy. In any case the Federal Reserve Bank's $600 billion quantitative easing program could certainly be part of the blame for the rising food prices around the world. Well, as long as our CPI does not get too hot I'm sure they won't even notice or address it.

Next up, today is a Friday. As many of our loyal readers know by now we rarely experience a sharp decline on a Friday. This is usually because the powers that be do not want a bad headline before the weekend. You see, the weekend is when most of the U.S. consumers will spend money. If the Fed's quantitative easing program is going to work for a while it will require the U.S. consumer to spend money. Please realize that consumer spending accounts for 70.0 percent of the gross domestic product (GDP) in the United States. The second reason that we rarely see a sharp Friday decline is so the Asian markets will not panic on Sunday night when they open.  Asia is now financing the European debt markets lately by purchasing debt from countries such as Portugal, and Spain. Its a global economy and the game of hot potato is being played by every major country at this time. As for today look for a flat trading session.
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Bangladeshis clash with police after Dhaka Stock Exchange index was halted after it fell by 660 points,or 9.25%,in less than an hour.Jan10,2011.

Posted by Scrat on January 10, 2011 at 10:17am

Police have used batons and water cannons in clashes with angry investors in the capital of Bangladesh after the country's stock market saw the biggest one-day fall in its 55-year history.

It follows losses of about 6.7% in trading on Sunday.The benchmark index had climbed by 80% in 2010 but has lost more than 27% since early December.

Trading was also halted on the country's other main index, the Chittagong Stock Exchange.

Popular investment:

"There are up to 5,000 investors holding protests on the streets in front of the exchange building. Some of them have been violent," police inspector Azizul Haq told the AFP news agency.

"They have started vandalising government property, which forced us to use batons against them."

The BBC's reporter in Bangladesh, Akbar Hossain, confirmed that the baton charging had taken place and that there were protesters on the streets.

The rising value of the stocks in recent years has attracted about three million small-scale or retail investors in Bangladesh, he added.

Shares have become a popular investment for ordinary people, often providing higher returns than bank deposits and savings.

However, regulators have also taken measures in recent weeks to limit the proportion of deposits that banks can invest into the stock market - after concerns that shares were overvalued.

The move forced big institutional investors to withdraw from the market, triggering panic among individual investors.

"Market insiders say small investors were looking for an exit point from the market through selling their shares," our correspondent said.

Investors and police had also clashed in mid-December following a market slide.

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