Update 1:10 pm ET - The Train has left the station.
When this system is right, it dares you to be disciplined. Unless gold pulls back a bit, this trade will not materialize. It is, however a reason to be sanguine about next week’s activity. The trade may be missed, but the confirmation of our longer term buys will just have to do.
We’ve already reached our target.. and that isn’t good for our (short term) wallets.
A Second Bite at the Apple
“Of course there is always a reason for fluctuations, but the tape does not concern itself with the why or wherefore. It doesn’t go into explanations. I didn’t ask the tape why when I was fourteen, and I don’t ask it today at forty…”- Jesse Livermore
Gold should be brought home over the weekend if you dare.
After being shaken out of our long yesterday on an hourly signal, the Yellow King decided to start higher. Today we will be buying Gold on or near the close as a more potent Daily VBS signal will hit up if spot is above $1285 on the closing bell.
Note, we are already long and looking to add physical with a $1700 target as described here.
This post is on short term swing trading. Specifically the time horizon is 3 days. These signals can be used to just get long without protections if you like. We don't do that already having a core long position.
Keeping it simple:
Day 0 - Friday
- Entry - Today near the close if spot is above $1285. The further Gold is above $1285 the less volumes will be bought to re-balance risk and reward
- Target- Assuming a $1287 entry, target price would be near $1295 in 3 days.
- Risk - Stop loss is a settlement under $1283 or a print of $1276. Stop loss remains live on Sunday night's open for at least part of the position
- Time Out - After 3 days, regardless of price, position is to be exited
Entry determines price target. Stop loss is $1283. Risk Reward tolerances are subjective. We use 1.5::1.0 or 2.0::1.0
Day 1 through Day 3 - Monday open to Wednesday close
- Risk- stop loss may be trailed higher based on "Day 0" Bollinger Band upper price level
- Target- Profits may be completely booked at $1295 or the majority is booked with a trailing stop on a tail position.
- Flexibility- Price target may move lower if other indicators begin to show rollover.
That's it. No story, no hype. No GOLD IS HIGHER ON POSSIBLE CANCER CURE or other nonsense. Just Risk Reward
The public is last to know the "why" something happens, and the press generally forces reasons on you with linking words like AS and WHILE. To wit:
-
Gold goes up AS penguins freeze
-
Gold Goes down WHILE Trump Plays Golf
Constantly implying correlation as causation when no- one knows. They are lying if they say they know why. And we are complicit when we read MSM articles and cherry pick things that reinforce our own bias. They do not know anything
Livermore again:
The reason for what a certain stock does today, may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now-not tomorrow.
The reason can wait. But you must act instantly or be left. Time and again I have seen this happen…
Reasons can wait
“You’ll remember that Hollow Tube went down three points the other day while the rest of the market rallied sharply. On the following Monday you saw that the directors passed the dividend. That was the reason…”
Good luck
VBL
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