We unfortunately had another very nasty loss today and hence are starting the month in the negative. For those interested in technical analysis Gold’s recent behaviour seems to be particulary out of sorts considering the fact that we are seeing risk-off behaviour in the majority of markets and yet gold is selling-off. Attached is my technical analysis showing the Weekly and Monthly Pivots untested. With price currently trading below the Daily 100 SMA and 61.8% Fibonacci level, there exist an even greater probability for reversal to the mean. If price closes the inefficiency zone @ 1840 there will exist an extraordinary opportunity with excellent risk:reward when considering a stop @ 1819 and a target @ 1970
Unfortunately for the strategy the market can and will at times behave ‘ilrrationally’ and while it’s decisions are based on it’s algorithm which typically work on a high probability edge of about one sigma, outliers will occur. Despite this setback I recommend we remain commited as we await performance to normalize once again. At the end of the day all I want to see is yearly returns that outperform the vast majority of market based funds and equity in general.
I will continue to provide updates as per usual. With the next update closer to the end of the month or perhaps sooner if there is some significant trades.
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