And I don’t mean anything to do with Cuenca de Pamplona!
Being U.S. Thanksgiving today I’ve got time to recap the trauma felt yesterday by any small Gold trader who got slammed across the stop running event we all witnessed. I was NOT long Gold because about a half year ago I coined the term for a new indicator I call the Gerome Powell Slammer so I stay flat on Fed. reporting days
A few hours before the release of F.O.M.C. minutes from their November meeting all hell broke loose in the Gold Futures market.
The trauma for me was restricted to memories when trading any open outcry New York Futures pit. Frequent stop running became the rule and NOT the exception. It was a bitch to become the victim of those days. I quit New York before the end of the 80’s. It was just too much. Plus I had to take delivery of a Coffee contract when I got really stupid one time… and the memories are still fresh, all these many years later!
Even with open outcry, the floor could chew you up and spit you out in a New York minute. Very expensive with NO recourse even when my real – life broker would phone the floor.
I’ll save you the details on the F.O.M.C. ‘minutes’ but suffice it to say it appears the Fed may become less hawkish (aggressive) with their rate hikes on the horizon. All of this is conjecture and only adds uncertainty to any trader’s brain.
What’s NOT conjecture was the intra-day volatility I’m showing with this chart, set to the 15 minute time frame. The 15 minute could be broken down further because most of the action occurred with a 5 minute window. Take a long hard look at that bar. Or maybe not, if you were long and got killed. It’s important to note this flushing occurred 3 hours ahead of the release of the report. The extreme range is from a low of 1715 to the high of 1740. Note the open and close are almost equal. That’s stop running baby in the first degree. Why you ask? Because they CAN!
I don’t like the mental place these thoughts put me in. I don’t like to blame ‘market manipulation’ ripping through stops but that’s what the algo’s are capable of creating now days. That’s computers trading at its worst. Those programs knocked out all the long stop loss orders sitting under support, allowing strong hands to enter the market much lower and drive the price all the way up to 1755.
Everybody retail trader is itching to get long after the obvious triple bottom formed from late September, through October and now November. What an opportunity to pluck everybody’s turkey well before the report release and Thanksgiving break.