So, I said in my last post that I would provide you with 3 examples in recent times when you could make high probability successful trades simply by operating 'in the moment', knowing what's happening in the real world with no need for charts (which would have only served to distract you or caused you to miss the opportunity).
I'll actually give you 4 compelling trades in recent history.
1) The obvious one is Brexit. Not sure what the charts were implying at the time; I'm sure some would have said we were in a downtrend, others would have said gold was rising, depending on your point of view. In any case the views were immaterial and unhelpful.
What was material was the vote count. Many on this site were able to follow the voting in real time and make the appropriate trades. Notice it is events in the real world moving the market. I'll also note here that because we can move our money around with relative ease compared to the big market players there was plenty of time to make the necessary trades.
2) The September Rate hike that didn't happen. Once more, not sure what the charts were suggesting. We did know there was a heap of pressure on the Fed to raise rates, bond markets had begun to price in a rate hike and many high profile bankers and fund managers were expecting it to happen. A couple of days before the Fed's decision, Lael Brainard, a voting member of the Fed delivers an unscheduled speech in which she talks of the many downside risks to the economy, gives a heap of reasons for rates to stay lower for longer and not one reason to raise. The Fed once again postponed which was positive for gold.
3) The Assange speech which was supposed to destroy Clinton which didn't play out.
If you watched even a couple of minutes of Fox news in the US you would have realised just how big a deal this Assange speech had become. Trump was falling way behind in the polls, the election was becoming a non-event and Trump supporters were literally having celebratory get-togethers in anticipation of the wikileaks information that would put Trump in the Whitehouse. I listened to the speech live, he pretty much said he had nothing and was misquoted in reference to his supposed dislike of Clinton. I posted what he said on this forum. I think it took close to two hours for the information to leak through the media and gold was $60 down by the end of the night.
4) Some obvious plays one week out from the election. With US equities near all-time highs, assisted more by historically low interest rates than by earnings growth; with volatility unusually low; with interest rates most likely to rise in Dec and bond yields already rising; with the most divisive election in modern times drawing to its final act... Is it any wonder we had the events of last week. Equities down (why would you buy now?), Gold supported (Uncertainty), VIX up.
You didn't need a chart to know they were all good trades a week out.
A side note: I highly recommend all of you trade less often, but go more aggressive on your trades when you can make a compelling case (if the case is supported by your particular and personal interpretation of the charts then all the better).
I'll give you some things to look out for in the near future that most likely will be tradeable:
* With polling very close in quite a few states look out for requests for votes to be recounted. This is a timely and heated process which will create a lot of tensions and uncertainty and, maybe, protests and violence. Should be positive for Gold.
* With an interest rate hike all but priced in for December, look for anything that will cause the Fed to delay. We already have one reason in the market selloff. Let's see what happens in next few weeks. If rate hikes are delayed it will be very positive for Gold, good for bonds (lower yields) and will help equities to stabilise.
* The GBP has rebounded because a couple of people have challenged the legitimacy of the Brexit vote. Parliament must now vote in favour of Brexit to trigger the process. Part of me wants to see what ensues if Parliament knocks back the will of the people. Simply put, it's not going to happen. Short the British pound the day the Parliament decides.
I'll just finish by saying the near-term downside for Gold is not disastrous. If Hillary wins, there will still be turmoil because Trump and his supporters will challenge and protest. If Fed hikes, it's widely accepted that rates cannot rise quickly, i.e. they will remain accommodative.
I believe the upside is far better. $1400 probably in play if Trump wins and Fed delays hikes.
Maybe $1500???
Exciting times.
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