Gold and Silver buying opportunity is here

Ever plan to buy gold or silver? After the big drop at the end of last week, the prices had dropped to very attractive levels. My itch for owning physical silver is driving me nuts. Holding a physical silver coin in your hand is indeed very different experience. I just want to have some. Urgh !! It's like a craving, and it might just be a new addiction. It's shiny, shiny shiny.

I was looking at how the prices of gold and silver falling on Friday, and it reminded very much of what had happened in 2008 when the financial crisis exploded in full force. This article does a very good job explaining things. Whether that the drop is caused by hedge funds liquidation drive or a CME margin hike, it doesn't matter, this just created a good entry for buying gold.

How Gold Performs During A Financial Crash

Copper is on the verge of breaking down, perhaps similar to the previous 6 months drop in 2008 to the bottom. With the Euro zone threatening to blow up, this might be the indication that the next 6 months will not be a happy one, unless we are hedged accordingly. And so, this is another piece for copper.

Recession or Pessimism: A Look at Economic Indicators

FX Trade Diary 23 Sept 2011

EURUSD

23 Sept 2011 2337 Hours :

With price moving side ways again, it's time to stay away until some level are formed. There isn't any clear levels to trade, so I am staying out for now.

Trade idea #1 : Long 1.344,  SL 1.341, TP 1.36 and 1.37.
Countertrend retracement trade.

Trade idea #2 : Short 1.359, SL 1.362, TP 1.328
Short to next major demand. Not the best supply level though.

Trade idea #3 : Short 1.3785, SL 1.3815, TP 1.328
Short to next demand from a M15 supply.

FX Trade Diary 21 Sept 2011

New format and more content from today onwards!

I am decided to throw in my trade ideas and also write on my take on macro economics. Trade ideas will come with H1 and H4 charts.

EUR/USD

21/9/2011 1940 Hours :

Market appears to be entering a consolidating period. It may be a good idea to take a long at position at the demand zone at 1.3594-1.361. I will be monitoring the approach of the price into the zone. I am still holding my pending short at supply 1.3785, SL 1.382, TP 1.346.

Basically this is my trade idea for the next day or two. Please do not trade this. This is not 4D.

EURCHF

21/9/2011 1940 Hours :

EURCHF is really a crazy pair after the announcement of the soft peg of the Swissy to the Euro. While the whole world wonders whether the SNB will really stick to their equally crazy statement, market rumors on Wednesday on SNB's intention to move the soft peg to 1.25 sent EURCHF rallying in a dizzying heights in a matter of minutes.

Market comments aside, this pair is not really trade-able but if you feel like taking a small bet, you might want to try the small demand zone at 1.214-1.216. This isn't really an ideal trade due to the massive pinbar sticking into the supply at 1.203, which might invalidate the idea that 1.214-1.216 is a valid demand zone. The rumors mentioned 1.25, but the valid supply zone is really at 1.26-1.266.

21/9/2011 2157 Hours :

This move towards the upside is not going to be sustainable. According to Reuters and Zerohedge, SNB sold 1500 tons of their 2500 tons inventory of gold recently, which is worth approximately 86.4 billion US dollars. The money from the sale is very likely used up in the crazy purchase of worthless Euros from 1.1 to 1.22. It does seem highly plausible that the US$90 billion (or was is in Swiss franc) used in the purchase of Euros was in fact, coming from the sale of the gold, which in turn was likely to be purchased by China and India. That doesn't give SNB much room as their war chest is therefore limited. It is likely that it will not be long before Mr Market continue to short EURCHF and SNB will have to resort to all out printing of the Swissy. Currency wars ahoy!

At near term, given the limit amount of ammo in SNB war chest, they could only spread fear and drive speculators to do their work for them. Perhaps 1.26 is possible but the downside back to parity is starting to look very frightening. If the drop does happen, it will happen in a very short span of time.

I really pity the Swiss people and curse their short sighted SNB. This is really the Brown's bottom version 2.

XAUUSD

21/9/2011 2130 Hours :

I got a couple of friends getting really interested in gold. I took a look at the prices of gold and saw that there is a very strong demand at 1692-1706. This means any hopes of going below 1700 will require nothing short of a gangbang or a economic disaster. Given that economic disaster is scheduled for 2012, the only way gold can move is towards 2000. If it ever hits 1700, do buy some of it.

As one of my friend likes to say, SELL HOUSE AND BUY! (Your neighbour's house too)

USD/CAD

21/9/2011 2311 Hours:

This pair looks like it will continue to consolidate in a upward channel. It should move into Supply at 1.001-1.006. Depending on the depth of the pentration of the supply zone, it may be possible to look for a short to supply at 0.98-0.984.

GBP//USD

21/09/2011 2335 Hours :

I had neglected this pair for a long time and realised my folly. It was in a clear down channel for so long. Never too late, there is still an opportunity to sell it into the next major demand zone at 1.551. There are 2 possible entry points for a sell position, supply at 1.572-1.575 and 1.578-1.58.

1. Entered pending sell at 1.579, SL 1.583, TP 1.551.
2. Entered pending sell at 1.573, SL  1.5765, TP 1.551.
   I am contemplating moving the SL to 1.583 to take a full swing down though.

FX Trade Diary 21 Sept 2011

EUR/USD

21/09/2011 00014 :

Definitely a classic /wrist trade day and Oanda broke my heart. The move towards 1.37 earlier was predicted to move from 1.361, which it did (And I never entered the trade due to cowardice). Then my pending order trigger on the sell side at 1.369, and promptly got stopped out at 1.372 by 1 pip. It then dive down for 120 pips in 2 hours, giving me a heart attack in the morning.  Dang, according to hindsighttrade.com, I missed 2 planned trades and got slapped with a 30 pips loss. Bummer.

Never mind, I got another sell order at 1.3785, SL 1.382, TP 1.346.

FX Trade Diary 19 Sept 2011

A new week, a new hope.

EUR/USD

19/9/2011 1954 Hours :

The week started with a brutal 100 pips gap down, taking out the demand at 1.37 at started to consolidate at 1.363-1.371 Let's see how prices react here. I am looking forward to a possible short opportunity at 1.3695-1.371 and 1.3785-1.38.

The context of today's trade is still short only. While I can't really say 1.37 is an ideal short, it is the top of the consolidation range, and part of the potential drop base drop to me.

FX Trade Diary 15 Sept 2011

EUR/USD

15/9/11 2150 Hours :

My pending short at 1.382 went for +50 pips before it got wiped out in a matter of seconds because of a news spike for +2 pips at breakeven. Fearing for the worse, I changed by short at 1.3913 to a rocket trade. The price almost went through the entire supply zone before bouncing out for +50 pips again. Gaaaa this is really bad luck. My last nights 2 (well)planned trades are now left in ruins.

http://www.zerohedge.com/news/here-what-just-happaned

Basically, a couple of bankrupt banks in Europe and US had came together and announced to the world that they had came into an agreement to lend money to each other in US dollars.Yes, the situation is so desperate that a mere agreement to lend each other money can send prices moving.

Bernake : I have some freshly printed $$$
US banks : We will borrow that money at 0% interest
Bernake : Euro banks do come and join us!
Euro banks : Weeeeee !!!
Result = 140 pip move in 20 mins @ EUR/USD ... and a very unhappy me.

15/9/11 2240 Hours :

Ok, time to stop grumbling and instead, it is time to plan new trades. From the price action, the demand at 1.382-1.384 is exhausted and likely to have changed in a weak demand zone. The sell orders are probably exhausted there. Looking for a bounce off 1.392-1.395 for another sell.

Meanwhile I closed my rocket trade for +62 pips. Sigh. Dude, on hindsight (not a good idea), plan the trade, trade the plan and stick to it.

 15/9/11 2340 Hours :

Entered a pending sell at 1.3925, SL 1.395, TP 1.377. Trinchet is going to talk at 2am. Every time he opens his mouth, Euro dived out of his mouth. Hopefully the Trinchet trade will work like a charm.

USD/CHF

16/9/11 0012 Hours :

This pair went from no-brainer to non-tradable. Hands off this pair for now.

You know sh!t is going to happen when ...

I have just received a letter from AIA saying that all my business with them are now transferred to AIA Singapore. Does this mean that the much anticipated financial maelstrom is coming up the corner, just next year as expected?

During the 2008 blowup, AIG, the parent company of AIA was on the brink of choking to death under a heap of toxic CDS, stroking fears that AIA would be taken along with it. By cutting ties to both AIA and AIG, perhaps they are hoping that this will prevent clients of AIA Singapore from running off to their competitors in fear when AIA and AIG blow up again in 2012.

Maybe 2012 will be really doomsday, but without the multi-million dollar Hollywood CG effects.

Ahhh this will be sweet.

FX Trade Diary 14 Sept 2011

EUR/USD

14/9/2011 2323 Hours :

On the hourly, a slow upward channel has formed over the first 3 days of the week. I had put a pending sell at 1.382, SL 1.3846, TP 1.3686. I am not really expecting the hit the full TP but the supply at 1.382-1.384 should give a decent retracement for a intraday trade.

EUR/GBP

14/9/2011 2355 Hours :

Taking a pending short at 0.8715, SL 0.8725, TP 0.866 for a quick intraday pullback trade. The prices is likely to bounce off 0.872, at least good for 50 pips.

GBP/JPY

15/9/2011 0010 Hours :

The bottom had fell out of this pair, and it looks like a short only upon retracement trade. Any long position in this pair will not be a good idea. The nearest supply is at 123.8-124.22. The price is moving away from the 21 & 55 MA, indicating an acceleration in the drop in price. It will be crazy to long now without knowing where the demand is. RSI and CCI also shows that momentum is still locked into a downtrend. This is clearly bearish but unfortunately there isn't a good point of entry into a short position until the supply area at 124-ish.

FX Trade Diary 13 Sept 2011

USD/SGD

0015 Hours :

Price is moving towards supply at 1.241-1.245. I am waiting this to coincide with the weakening of the US$. This will likely to signal the bounce in EUR/USD.

AUD/CAD

0023 Hours :

I am looking forward to a bounce in the demand at 1.021-1.023. The Aussie dollar had took a beating for the last 3 trading sessions, and had burned through the demand at 1.03. It is not a fresh level and might just burn towards 1.013-1.016.

FX Trade Diary 12 Sept 2011

A fresh start to the trading week, hopefully it will be the time to recover my losses on Friday.

EUR/USD

0428 hours :

Chart clean up. Waiting for a clear retracement, somewhat similar to the GBP/USD setup.

GBP / USD

0435 hours :

Chart clean up.

2350 hours :

Prices look like it will bounce off 1.572-1.579. The demand zone looks too wide and it's hard to tell whether the trade will work or not. I will be interested in a buy to 1.597.

USD/CAD

1934 hours :

My pending sell order at 1.0025. SL 1.0065. TP 0.775 triggered. It manually closed out the trade for +58 pips went the price stall to stall near 0.996. I will be still interested in shorting at 1 - 1.0025, so I re-entered the order.

FX Trade Diary 9 Sept 2011

I have decided to start blogging my daily FX thoughts as a way to keep track of random thoughts in my head. Hopefully this will help me to be a profitable trader soon.

Watching candles forming is really boring, so blogging might help to keep me awake and maybe sane.

EUR/USD

0005 hours :

I was waiting for a retracement to supply at 1.419-1.421 but prices kept falling like a brick towards demand at 1.376-1.383. Getting towards 1.38 is a certainty but without a deep retracement after massive 600 pips sell off is mind blowing. Looks like a steep drop on H4 is coming but hopefully at least with some sort of retracement.

I had entered a pending sell at 1.4064, SL 1.4081, Target 1.38. It's a case of drop base drop at 1.405-1.41, not a nice base due to the CHF driven rally-after-shock but let's give it a shot. A straight sell to 1.38 is too risky.

1847 hours :

It's already at 1.38. I need to rethink my pending order during the weekend.

USD/CAD

0005 hours :

This pair is stuck in limbo, in-between two zones. RSI and MAs are flat, confirming that prices are not moving much. Ignoring this pair for now.

CHF/JPY

0005 hours :

88.39-88.57 is a old demand zone. I am expecting this to take a little bounce here back to supply at 89.98-90.28, which will make a nice sell off, as it is a fresh area. But given the crazy Swiss policies changes recently, I am not going to touch this pair.

EUR / GBP

0005 hours :

I had missed my pending sell at 0.885 for a measly 8 pips, causing a hindsight loss of 150 pips. Not to be dishearten, I have a pending long at 0.8655, SL 0.8635, TP 0.886. This is going to be a swing trade.

1848 hours :

The pending buy triggered. Thinking of moving my SL to BE. A bit premature and I don't feel like losing a single cent more this week. But stick to the trading plan. It's kind of hard to do that. 0.8645 is another strong demand level, so even if it goes through 0.8655, there is still one more chance to break even. Let's see if NY can push prices back up.

AUD/USD

1830 hours :

The uptrend looks good and still intact, and the recent USD strength had pushed AUD/USD down towards a demand area. I am looking for a long at 1.0486 for push back up towards 1.07. I am setting up a pending buy at 1.0486, SL 1.0455, TP 1.0486.

GBP/JPY

1921 hours :

I don't really like the way prices are moving today. The bounce from supply at 122.68-123.5 looks weak but could take it all the way to 126 or even 128.5. Staying off this pair for now.