..........Day Trading Long On Monday Is Very Risky
Given the 2% follow through monthly cycle sell signal on 12-9, the likely monthly downcycle or at best a monthly upcycle rolling over dramatically, and the bearish NEM Lead Indicator on Friday 12-16 at -0.24%, plus the fact that XAU Implied Volatility portends some weakness on Monday, day trading long on Monday is very risky. There will potentially be a sharp rise on Monday which would be the parabolic part of the monthly downcycle's Elliot Wave B short term upcycle that began late last Wednesday. That sharp rise could consist of a gap up at the open and a relatively brief spike move. The indicators suggest that's a likely scenario.
XAU Implied Volatility fell -3.73% to 31.250 on Friday 12-16 from 32.460 on 12-15 versus a +1.26% rise in the XAU on 12-16, which is a sharp (2-2.99%) 2.47% rise in complacency (-3.73% + +1.26% = -2.47%. The XAU wall of worry shrank by -2.47%, therefore complacency rose by +2.47%) that portends weakness/a downtrend during part of Monday 12-19's session.
XAU Implied Volatility fell -3.73% to 31.250 on Friday 12-16 from 32.460 on 12-15 versus a +1.26% rise in the XAU on 12-16, which is a sharp (2-2.99%) 2.47% rise in complacency (-3.73% + +1.26% = -2.47%. The XAU wall of worry shrank by -2.47%, therefore complacency rose by +2.47%) that portends weakness/a downtrend during part of Monday 12-19's session.
posted by Joe Ferrazzano at
9:25 AM
5 Comments:
Hi,
Amazing how news like this accompanies cycle changes -
(Tokyo Commodities Exchange Release 12/12/05)
At the Precious Metals Market Management Committee held on December 12, 2005, the decisions were made to impose Extraordinary Margins for existing and newly established positions in the gold market on December 14 for all the contract months.
http://www.tocom.or.jp/news/2005/20051212_02.html
This was a massive increase in margin requirements, and comes on the heels of the Crimex, er, COMEX changes.
By
Jeff, at 10:57 PM
Jeff,
A monthly cycle sell signal already occurred the session before on Friday 12-9 for HUI, NEM, and the XAU, so the monthly cycle had already begun to roll over on 12-9, and, gold lags gold stocks.
News is almost always a very short term blip. I pay little if any attention to news like that, especially after a monthly cycle sell signal, because risk skyrockets for longs. Ciao
By
Joe Ferrazzano, at 3:25 PM
But this news has a longer term impact, in that it limits the positions that can be taken by making each position cost more. It won't change trends, but it still is interesting to me that they always manage to do things like this at the beginning or end of cycles, as though the timing is strategic.
The downcycle for the leading indicators began, and this was released the very next trading day. My point was that there may be a lot more validity to your work than people think if the timing is not a coincidence, but instead they also noted a trend change and timed the release to coincide with it.
By
Jeff, at 5:30 PM
Jeff,
But remember that COMEX raised their margins a few weeks ago and gold/silver shrugged it off and exploded. I wouldn't give Japan's TOCOM that much credit. On 12-12 it was pretty obvious that a blowoff spike was in progress. To me this discussion is a mute point because it has no bearing on how I time gold/silver stocks or the metals for that matter. CIao
By
Joe Ferrazzano, at 10:53 PM
I'm not sure just because the effort failed that it wasn't an attempt. But point taken as to the little impact.
By
Jeff, at 6:35 PM
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