July 6th, 2011 - Issue #591

In This Issue

1. Jim Wyckoff Hot Market: Gold
2. Trading Psychology 101
3. Economic Calendar

1. Jim Wyckoff Hot Market: Gold

Gold Trading Turns Choppy at Higher Price Levels

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Comex August gold futures prices on Wednesday morning were trading solidly higher on some short covering and bargain-hunting buying interest after hitting a fresh six-week low of $1,478.30 an ounce last Friday. While last week's price action did produce some temporary near-term technical damage, including a bearish weekly low close on Friday, this week's solid price rebound has repaired that damage.

Trading action in gold futures has been choppy and sideways at higher price levels, since the market scored an all-time record high of $1,577.70 an ounce on May 2. The fact gold futures prices have pushed back above what was major psychological resistance at the $1,500.00 level has also given the bulls some fresh encouragement.

The longer-term monthly chart remains in a fully bullish posture, as gold futures haven been trending higher for the past 10 years. Bulls' next near-term upside technical objective is to produce a close in August futures prices above strong technical resistance at $1,540.00. Above that lies strong chart resistance at the June high of $1,559.30.

Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,478.30. Below that is located strong chart support at the May low of $1,464.10, basis August futures. First resistance for August gold futures is seen at $1,530.00, $1,535.00 and then at $1,340.00 First support is seen at $1,518.00, at $1,510.00 and then at $1,500.00. Stay tuned! Jim Wyckoff

Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at Jim Wyckoff

Disclaimer:

Trading commodity futures and options involves substantial risk of loss. The recommendations contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results. This is not a solicitation of any order to buy or sell, but a current futures market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!

2. Trading Psychology 101

by: Vadym Graifer of RealityTrader.com

In today's issue are the first two articles: Trading Psychology 101 and Trading Psychology - Stage 1. Blissful Unawareness.

Vadym is the author of Techniques of Tape Reading (McGraw Hill 2003), How to Scalp Any Market (2005) and Master Profit Plan (2005). Vadym is a frequent featured speaker at International Trader's Expos and Financial Forum Conferences.

He is the founder of RealityTrader.com, a hands-on training company, working with a global community of individuals to achieve high levels of trading success.

Vad is a professional trader and an international private trading mentor responsible for turning around the trading careers of thousands of trader. He has also published articles and interviews in industry magazines, corporate product newsletters and trading forums.

Three Stages of Trading Psychology

This is one of those never-ending debates among newer traders - role of psychology in trading. Some claim it's all there is to trading. Some argue it's nothing but red herring, and one just needs to follow his signals (system, indicators, whatever one fancies) and no psychobabble will ever be needed. Yet some say psychology is important and assign some weight to it - "80% of trading is psychology"... or 95%... Not sure how they measure it, I personally like 76.364%.

Two things must be said about this.

First, we all are different. Some simply cannot change their behavior and, no matter what system they are given, they just can't follow it. Their personality takes over pushing them into all kinds of trading No-No's. They can't enter when entry signal comes in; they don't apply stops when the trade fails; they take profits too soon or never.

Then there are others who don't seem to be influenced by their inner workings; they just see the light and follow it. Obviously, the role of psychology will be drastically different for those two types.

Second, and most significant for most of us: We go through different stages in our learning curve. As far as trading psychology is concerned, I can clearly see three stages common for the most traders.

First stage is total ignoring or under appreciation of this aspect of trading. By ignorance, by arrogance or for whatever else reason, a trader doesn't give it much thoughts while focusing on technical side of trading.

Second stage is acknowledgment. Running into troubles with their inner gear, reading books or listening to others, traders become aware of the ways their personality interferes with their trading. They have met the enemy.

To Continue Reading the Rest of the Article as well as the Article "Trading Psychology - Stage 1. Blissful Unawareness" Please Fill Out the Short Form Below for Immediate Access.

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!