Search This Blog


Search Tool

Sep 1, 2009

Trace Mayer: Massive institutional gold market change

10:05p ET Tuesday, September 1, 2009

Dear Friend of GATA and Gold:

Trace Mayer, proprietor of, notes a new system of clearing gold forward contacts in London and suspects that it is being designed to divert gold demand away from real metal and into more unsupportable promises. Mayer's commentary is headlined "Massive Institutional Gold Market Change" and you can find it at RunToGold here:

And at GoldSeek here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Join GATA here:

The Silver Summit 2009
Thursday-Friday, September 24-25, 2009
Davenport Hotel, Spokane, Washington

Toronto Resource Investment Conference
Saturday-Sunday, September 26-27, 2009
Intercontinental Hotel, Toronto, Ontario, Canada

New Orleans Investment Conference
Thursday-Sunday, October 8-11, 2009
Hilton New Orleans Riverside Hotel, New Orleans, Louisiana

* * *

Support GATA by purchasing a colorful GATA T-shirt:

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:

Buy The Selling, Sell The Buying

David Penn,, 08.14.09, 12:00 PM EDT

Stocks like Intel have come on strong after some selling pressure. Cisco waits its turn.


Buying the selling and selling the buying--that's how Larry Connors, founder and CEO of TradingMarkets, has characterized his "high probability, mean reversion" approach to short-term stock trading.

What does this mean? It means that when looking to buy stocks that will outperform in the near term, we look to buy those stocks that have experienced the most aggressive selling.

Our research, involving thousands of simulated stock trades going back to 1995, shows that stocks that have pulled back--and pulled back severely--above their 200-day moving averages tend to outperform the average stock over the next few days.

Larry and his research team have incorporated these insights--along with several others--to develop a rating system--PowerRatings--that can help short-term traders spot those stocks that are most likely to move higher in the short term. This is opposed to many stock trading strategies that tend to be very good at identifying stocks after they've made significant moves.

So if that's what "buying the selling" means, what does it mean to be "selling the buying"?

By selling the buying, we are talking mostly about exits, and specifically the idea of exiting on strength. Because we look to buy high PowerRatings stocks after they've moved lower, our goal is to sell them as they recover and resume the advances they had been in before their corrections.

Rate This Story

  • Your Rating
  • Overall Rating

Which stocks would Benjamin Graham buy today? How about Warren Buffett and Peter Lynch? Click here for all current recommendations with a trial of the Validea Hot List.

This approach to trading is called mean-reversion trading, and has been a very popular and very successful way professional traders have made money trading stocks for decades.

Right now, with the markets having advanced over the past few days, there are ample opportunities for traders who picked up shares of high-PowerRatings stocks over the past week to be looking for opportunities to take profits. Of the stocks I have mentioned in recent columns, Intel ( INTC - news - people ) and Applied Materials ( AMAT - news - people ) are among those that have made significant gains in the past week.

Others, such as Amgen ( AMGN - news - people ), Cisco Systems ( CSCO - news - people ) and Expedia ( EXPE - news - people ) have moved higher, but remain under some selling pressure and may still have some upside (note that all of these stocks have PowerRatings in the neutral range of 5 or 6 as of Thursday's close).

David Penn is senior editor at Visit for more education, information and tools for shorter term trading.