1. Risk sentiment looks to be turning south, particularly in US equities which have seen monthly lows which is consistent with the broad equity valuation correction lower that i have been expecting for the past few weeks.
- However the highly correlated safe haven assets look to be showing some divergence/ value by also trading lower. Given im a risk-sentiment bear, I back this view with short SPX and long Gold/ YEN.
2. Also Fed unlikely to hike means USD demand is likely to be parred which puts less pressure on gold , but either way, a hike increases risk-off and will drive gold/ haven demand so it is a win win situation.
3. Statistically gold is also a long after trading lower 5 days in a row which for the past 16yrs of data is a 1/100 chance of having a day for the next day (today). Also on the weekly we are 1.3 deviations lower, with the monthly and quaterly at 0.9sd and 0.7sd lower.
4. Risk here looks to be to the 1300 with topside at 1350, 1370 and 1400 - i personally feel we can see gold bid to 1370 on a SPX to 2000 backdrop, a fed hike would have my bets moving SPX well through 2000.
pays off up 3pts.. leaving some on for the macro position but taking some tactical profits here
#3. How do you drive that statiscal value????? Please I wish to know!!!!! With Z score??? BUT the price is not normal distribution, but more peakier and fat tail (kurtosis). I do know how to do distribution of return and std at now ONLY one day, but Dont know how to do multilple days. you said lower 5 days... how do you do that...?!
#4. Indeed I concur. But what is 1300 pivot?
1300 is the next support level of significance, plus gold tends to respect the round 100 figures e.g. 1200, 1300, 1400