"...risk management is not another component... it is THE component of trading! Everyone goes broke because their trading size is wrong... Any fool can take a profit. It takes a lot of character, discipline and commitment to take losses and continue going – and that is the only way one can succeed. The lasting trader will always reduce trading size in order to continue trading and come back."
Chinese Stocks Tumble In Close Of Trading "Causing Panic", US GDP To Be Revised Higher On Seasonal AdjustmentsSubmitted by Tyler Durden on 07/30/2015 06:54 -0400
We start off the overnight wrap up with the usual place, China, where in a mirror image of Wednesday's action, stocks once again started off uneventful, then gradually rose in the afternoon session and meandered near unchanged territory until the last half hour, when out of the blue they tumbled to close near the day's low, some 2.2% below yesterday's closing level. What caused it? One possible catalyst came from Reuters which reported that that Chinese banks were investigating their exposure to the stock market via wealth management products and loans backed by stock as collateral.
Having detailed yesterday the manipulation in the precious metals markets that implies the bear market in bullion is an artificial creation, we thought the following 'rational' chart effort at 'valuing' gold may provide some frame of reference for the level of riggedness occurring...
The bear market in bullion is an artificial creation. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply.
The dollar's pause may be short-lived. Divergence still the key driver.
As Nanex once again shows, having captured the exact "spoofing" moment, the action was all on the ask side, with a "spoofer" first representing a large sell order, and sending gold lower after 2:41pm, which remains on the order book, but which promptly vanishes once the actual price of gold crossed into the spoofer's "ask" following a subsequent ramp at 4:51pm.
China will be a net buyer, and a net importer of physical gold for years to come. In and of itself that won’t necessarily cause a sharp rally in gold prices anytime soon, but gold acquisition from the Chinese state and her citizens, as well as emerging market central banks the world over will continue to provide support for the physical gold market. Those that have sold gold in the past few days (and there have been plenty in the ETF and futures markets) as a result of the “disappointing” number out of China may have just caused the capitulation event that typically marks the bottom of any bear market.
Fast forward to this morning when in yet another Reuters piece, we "find" that the narrative has shifted once more and that now, "traders from Hong Kong to New York are pointing the finger at others for being behind the move while struggling to unmask the mystery sellers." In other words: the "hunt" for the great gold "bear raid leader" has begun.
How A Pork Bellies Trader And Milton Friedman Created "The Greatest Trading Casino In World History"Submitted by Tyler Durden on 07/21/2015 16:30 -0400
"I held in my hand the Holy Grail for the Chicago Mercantile Exchange. The most influential economic mind of the twentieth century provided the CME with the intellectual foundation upon which to build its financial superstructure."
Since yesterday there has been another of wave of negative, misleading and almost triumphalist commentary on gold most of which studiously ignores the clear evidence of manipulation of the price on Sunday night.
"Now that the spell is broken, we expect that many holders may want to sell to the forced buyers in the market. In addition, although difficult to assess accurately, due to a lack of data, we estimate that around 1/5 of the free float is still carried on margin. The high margin cost means that selling pressure is high as long as investors do not expect the market to go up significantly.we expect the market to experience another leg down, possibly within months."
Last Night's Gold Slam So Furious It Halted The Market Not Once But Twice, And The Funniest "Explanation" YetSubmitted by Tyler Durden on 07/20/2015 15:35 -0400
Yesterday, just before the Chinese market opened, precious metals but mostly gold, flash crashed in milliseconds with a violent urgency never before seen. We documented the unprecedented event last night, but for those who missed it, the following chart from Nanex clearly lays out just how sudden the "out of nowhere" selling was, which led to not one but two 20-second halts in the gold futures market spaced out precisely 30 seconds apart as a result of a Velocity Logic (or lack thereof) event.
In what looked like another successful bid to manipulate the gold market lower, there was massive selling of gold futures contracts - some 700,000 ounces worth of gold futures in mere seconds. The equivalent of one-fifth of a whole day’s trade in a normal session, was sold in a concentrated manner in less than two minutes - pushing prices lower again.
The dollar made new multi-year highs against the dollar-bloc and is bid against most major and em currncies. Why?