Broker hiccup? (NOT!)

I tried to close my IAU position this morning but I keep getting a "More shares requested than in current position" message. I even tried reducing the order, setting a stop order, limit order.... no avail.

As much as this is frustrating I am not terribly concerned about it... yet. Gold jumped a bit between my attempt and now, almost $8, and the fund jumped from $13.71 to 13.79.... about 8 cents. Yes, there is a reasonably close correlation in short term moves on this one.

I would like to set a stop and just trail it manually, I'll have to wait for the broker to get back to me... or I can call the order desk if I feel a strong desire to have this dealt with quicker.

UPDATE:
I called the trade desk and had it pointed out to me that I had an outstanding stop order in place and therefore could not add another order on the same shares (DUHHH!). I have been trading with and without stops for a while no so I just forgot that I had one in place. Once I had placed a couple of failed attempts and had them rejected then looked at the order status I failed to notice the original order nested in the bottom. Classic newbie mistake.

Anyhow, the price climbed back up near it's high for the week at $13.85, I closed it out at $13.77 so I don't need to sit on it for the weekend. With the Middle East shenanigans it may very well gap one way or the other by Monday and I would rather not deal with that... so an overall 3.11% gain on a short term gold rally trade.

I look at the entry and exit based on the gold futures contracts and drool... a little. $6,000 in profits. Now I am not trading those so the point in moot but what is interesting is that there was a bit of a disconnect between the percentage increase between the ETF and the futures. Prior to this week they were tracking with the ETF a little ahead but this week the ETF has been a full 1% lagging. A shame as I was likely to be closing the trade this week it would have been nice to have been able to post an extra point on the return.

Jeff.

Gold proxy

I was away from my computer for the entire trading day and of course gold did the move that was to have been the setup to get into the trade. As a result I took the trade smaller than planned a little past the entry.

I used IAU as a proxy for gold futures or CFDs. It is cheap, under $15, so I can buy enough to let me feel comfortable with the smaller break-even move.

I did have trouble figuring out the correlation to the pricec of gold and decide to let the relative price action dictate the final entry. I may take an additional position tomorrow if there is a small pullback.

Off to bed for now, it's been a long day.

Jeff

Gold... short for the pull back.

I am not a gold bug by any stretch of the imagination. I know I used to do some day trading off of the gold indices some time back, and had fun with that, but I would take the long and short with equal ease.

Today I closed a gold short that I entered and managed by using a newsletter service that I started earlier in the month.

This is not a typical hyped newsletter or trading service. It's inexpensive, informative, membership is small and is based on personal trades made by the newsletter author. The only reason I am doing this is I have followed this fellow for some time now and have seen his ideas play out well. Also I was on his mailing list when it came time for him to actually monetize his ideas. Based on his fee and number of readers he is not doing this for the money.

That is the good side, the not so good side is that he bases his trades on futures contracts, CFDs (Contracts For Difference... which I have to research more to really understand), FX and commodities. These are all less familiar to me than typical stocks and options.... but that is half the fun.

The last trade was a short gold play to take advantage of the counter trend move as gold pulls back (my style of trade in the first place). He based the trade on CFDs that are worth $10 for every $1 (research needed here). Not only do I not have access to these I doubt that my broker has them anyway and there are restrictions that do not allow US citizens to even trade these... not that I am American but it just makes them likely harder to get into.

In order to be able to trade in my current arena I need to convert everything over to ETFs... which was easy enough as I just plotted the Gold March contract prices (highs and lows over 6 months) compared to the corresponding ETF highs and lows (DGZ for short and IAU for long), calculated the current price correlation and the current ratios, plugged in the target entry, exit and stops and VOILA! ETF conversion.

My entry was bang on and my exit was 5 cents lower than the exit target... but that is due to me not being able to trade ETFs afterhours as futures and CFDs are, so I took a 5 cent loss of potential to ensure a pre-market exit. It turns out I could have nailed the target, but that is the nature of trading.

DGZ entry at $15.73 jan 18th (short Gold ETF)
DGZ exit at $16.30 jan 28th (today)
3.6% gain in 10 days. a 100 share trade pays for the annual membership to the newsletter. Nice start.

I played it small in order to be able to not be concerned about how much I had in the trade and to ensure that I could take part in other trades that may come up. We had a S&P500 trade that I lost a few pennies on but it was opened and closed as a daytrade and I had to wait until the next day to close mine out... obviously a hinderence being restricted to typical stock trading hours.

Jeff.

Gold, some comments

All I see about gold...going back a few days... was how $1200 was just s launching pad and it is going higher. Very few were looking at the real picture though, the technical side of the equation.

No matter how you cut it gold was overbought...which just means that it is on the topside of it's trend channel. I pulled up chart after chart for gold indices, gold companies and they all look identical.

Keep in mind that I was not really watching gold anymore so the only real reason I did not see the drop was I was not looking for it.

Here is a chart...CBOE gold index, not the price of gold. Why anyone would have expected it to go any higher after the latest run-up is beyond me.


The 80 and 40 day linear regressions and the trendline are indicating the same thing....there is no break in the trend yet, just a typical linear regression. There is still approximately 4% of the peak price in room left before the price is at risk of breaking the trend and actually heading down. The current trend has been in place since the end of 2008 and each of the minor corrections back to near the trend line have all been normal.

While it might be a good day to buy gold I'm not jumping in. Other fish to fry right now.

I find it odd to talk about charts as if the technical stuff actually determines what is going to happen next. Can it predict the next move? Not really, but it gives a trader something to work with as a starting point. Seeing as trends are repetitive it certainly can indicate a high probability next move...as long as it is not this late in the game in a trend.

Jeff.