TSE, Global Gold and the London market influence

I noticed something in my review today that really made me think and take a closer look at things.

I knew how the market had been affected by the Eastern and European markets over this week.

I watch the 24 hour gold prices to judge opening prices for indices, ETFs and stocks here.

I have noted how gold varies depending upon which market is open at the time.

These points added to today's observation led me to check something out a little more thoroughly. I expected that today may have had an up day overall following the modest gains started in the Nikkei and followed through in London. I noted how our market was choppy (I lost a bit as a result which is partly what prompted my closer look) then, rather than continuing to rise it started dropping almost as if it drove over a steep embankment moments after 1100h.

So London was not a great influence once closed and we must have been fighting their move up the whole time. I have noted this in related stocks once it is determined that one is fighting the other, one capitulates and they both head in the same direction with great gusto.

Red vertical line is 1100h.

So what the heck happened at 1100h to prompt such a drastic change in the market?

London closed.

I have noted how not having the NYSE open on offset holidays affects the TSE, so why not London?

I checked the last 10 days. Following is a 10 minute chart (just a little cleaner) with the green lines representing the TSE/NYSE open, the red lines represent the London close.

It is plainly obvious that the market takes a shift at 1100h or minutes afterward. Sometimes it is a sudden change in direction, sometimes it is just a correction or a smoothing out of the movement. Only one day out of 10 was the market move unchanged, last Tuesday and I am not sure why, perhaps it was Obama's address day or something as I recall the market not having a favourable response and that would be a large enough North American influence to be able to ignore the European markets.

I recall a professional trader saying once that he always waited until 1030h before even looking at the market for his daytrading. He never mentioned why but I suspect that he was looking for the change in direction at 1100h to make his first lucrative trade entry.

I am going to try just that tomorrow and see what happens, ignore the market altogether and not be fretting over moves missed prior to the tumultuous morning period when we are fighting the influence of another market. That certainly explains a lot.

Jeff.