February 11th...the crunch

This morning is turning out to be a great learning experience for me...which means that I lost money so far...it's about 1030h as I type this and I am just going to sit out the rest of the major move in gold.

The first thing that I learned is to not be so bullheaded.

I saw the opening price above the R1 pivot point, this is more likely to indicate an up morning if not a full day of uptrending. The first target should be the R2 and if that is breached then R3. One of these trades, if gotten in early enough, can be followed up all the way with out worrying about exiting on a bit of weakness as the profit is pretty solid, just exit once a pp has been breached on the downside.

The green arrows were my two trades entered as long positions in HGD for the expected pullback in HGU. The Red arrows are the trades that should have happened, the first was soon enough that I was not sure I wanted to try to get in and the 200sma (circled green line) would have been the target. The next two, I was already in HGD and did not get out prior to the very beginning of the move up. The third and last I was just to fearful that the price was peaking and I was getting in where the price was going to head down...two losses tends to make me a bit gunshy. I won't bother figuring out how much I missed out on, it does not matter. What matters is that I learned a bit more than I knew when I started this morning...pay attention to the first price when it gaps over or under certain ranges, get out quicker if it looks like the move is not going to materialize in my favour.

So, why did I try to enter a bear trade under R1?
I don't know.
Why did I let it run when I knew it was more likely to reverse and continue to head up?
I don't know.
Why did I try the exact same move at the R2 and let it run past my "know I'm wrong" point?
I don't know.

Actually I do know. I like to play the downside of a price move so I have a little bias switch in my head that I have a hard time flipping to play the long game. So I saw what could have been perfect setups for the bear play if the price was going to be somewhat range bound or downtrending.

I also hesitate to buy in a momentum move once it has already started. I like to see a pullback to a resistance point to get in. Sadly this keeps me out of a lot of fast moving and big trades. In both of the above mentioned trades had I just sold my HGD position at that point where my gut said "wrong move, get out" I would have been in a better position to have bought HGU to capture the huge rally just before the momentum took over.

So, the hindsight view tells me what I should have done, and that I should have seen it and, if not getting long on HGU at least not getting caught playing HGD.

The price is beyond any of my pivot points right now so my best bet is to wait until lunchtime and check in again. At that point the 200sma will be "caught up" and may indicate what the afternoon may bring. The price may have rounded over as well and perhaps there will be some downside plays to be had.

Jeff.