September comes in with a roar! Hear that lion as he takes a bit out of the USD, sending it breaking down below the support line! Watch him grin wickedly as gold hammers up and through (for a short time anyway) the psychological overhead-anvil of $1000 USD!
What a day. What. A. Day.
It's like I've been saying all along. The US dollar was going to crash this week, and gold was going to end up trading at some price and velocity only a PHD physicist could put into practical terms.
Or wait. I didn't say that did I. Actually, come to think of it, that seems to be the exact opposite of what I said. I seem to recall.... yes! The stuff that I said was "absolute drivel"! Of course the USD is going to crash immediately and of course gold is going to skyrocket in dollar terms accordingly.
So. Let's take a look at the charts then. What story do these lovable snapshots of time-action-based data tell us?
Wow that is one hell of a beautiful looking trend!
What about the USD?
Ahh, there's our dead friend. The worthless greenback FRN (That's federal reserve note, for all you non-gold-bug types out there who haven't seen the term before.)
Well. If I was chasing a trend trade right now I think that it would be impossible to hold myself back. I can literally feel my trigger finger itching to pick up some GLD shares and squash the USD like a pesky fly.
Wow, what a feeling! Exhilerating! I took a little look around the net today and came across a great many articles extolling these developments.
But, despite the rush I'm feeling, I suddenly get a small voice in the back of my head, whispering something. What's that?
Careful. Be very careful.
Ahh yes. That still small voice making its way through the rush of feeling you get with even the thought of putting a huge pile of your hard earned chips in the pot.
And I remember. I am not trying to chase a trend. This is not the time for chasing trends. These trends are old, stale - too long have they been praised. The trader in me, the cooler side of me, is facing what the crowd is walking away from. And there seems to be fewer and fewer pointing in my direction.
No, dear readers, I said a few days ago that there was "room to run" in these shenanigans. There are still more people to be pulled in by Mr. Market (who I must say is very a very alluring bull-costume these days). And that's the funny thing about Mr. Market - he tends to bring you just past that point where you doubt what the countless hours trading, those hard lessons of taking his beating and learning from them, have taught you.
It's never easy being a contrarian. It's never easy when you are one of the few and everyone seems to be on the right side of the trade.
But that's what makes it pay so well in the end.
I intend no pun here, dear readers, but that is what makes those lessons so worth their weight in gold.
Happy trading. We have already seen some big moves in key markets today and I am betting that this is only the beginning.