Friday, October 18, 2013

More on yesterday morning's gold pop



Reuters - lurching gold prices mystify traders. Quote:
these seemingly sporadic trades lasted only minutes but overwhelmed volumes and price direction on each occasion.
Now what kind of idiot thinks that these trades weren't simply intended to gain maximum price move from a minimum amount of outlay?
Others said it may be due to unusually low liquidity, as open interest dwindled to a four-year lows just a day before the first episode on October 1. But professional Comex traders should know to moderate their orders in thinner conditions.
No shit, they should. In fact, I assume that bad order execution would get your ass fired and blacklisted out of trading forever. So these orders were, simply, executed perfectly for whatever result was desired.
A few suggested darker causes: the deliberate gaming of the market, whether by a rogue trader or a computer-driven algorithm that seeks to maximize market impact by overwhelming the system with a large number of orders in milliseconds.
Again, another insight from the institute of No Shit Sherlock. Commodity futures have been gamed forever: read Jesse Livermore's book if you need insight into this.

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