Tuesday, September 27, 2011

the prices of gold and all the other  commodities have fallen sharply and a positive correlation is now being seen between the equity markets and gold and silver prices which is diametrically opposite from the negative correlation that gold had with the equity markets .

as the equity markets in Europe and US rise you see gold also is  touching highs which is something that does not bode well for a trader because you are not sure which way to trade when would gold again resume its correlation with equity markets and then again would decide to go down when the markets are up is not sure 

so in these times i would say that one should stay away from gold 

crude in that sense is much better bet because its correlation with the world markets is still intact so its better to trade in crude than in gold 

with the new margin requirements now in place it seems that speculative activity is will now come down an that's the aim with which these requirements have been put in place but in whatever short time i have seen the commodity market i have seen them having that effect so there would be big movements in gold and crude watch out for them 

keep a strict stop loss and never never take a overnight position you never know which side of the trade you wake up to 

so happy trading and keep your  comments coming 

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