For those following Gold, today witnessed a classic stop orders hunting (Potentially by floor traders).
It all started around 11:05 AM EST. The market was trading at $1,248.70 (April NYMEX futures). Stop sell orders were clustered in the area of $1,246 all the way to $1,242. How do I know? That's some sort of a secret, so please don't ask about :)
Anyway, potentially floor traders started shorting the market from $1,248.70 all the way to $1,246 where the stop sells start to trigger and thus floor traders cover their shorts on those stop sell orders for an average of $2-$3 per ounce of profit (It might seem a tiny amount, but when you do this on a 1,000 contracts, that's a $200k-$300k of profit in a matter of half an hour).
The sell-off accelerated and if you pull the chart, you will clearly see how the market accelerated down at exactly 11:30 AM EST, hitting $1,242.70 (The low for the day) before it continuted the rest of the day uptrending weakly to close at $1,245.
Interestingly enough, the stop orders cluster was up to $1,242, yet the market only reached $1,242.70, this was mainly because there was another cluster of buy limit orders which was heavy between $1,239 and $1,241, thus the market never went there.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.