Technically, AUMN formed a classic cup-and-handle pattern since November 14, and at the close today broke decisively above that pattern. The next step would is to retest the highs from 11/6 at $4.2. Given the fact that SLV closed today at a 1-month high, even above the local peak of October 17, I don't think AUMN will be able to stay below $4 for much longer. After all, if SLV/GLD stay at least this high for the rest of the year, there is a definite possibility for the company to obtain a positive cash margin for Q4 2012, which should really excite the market and get them out of the woods, since positive cashflow companies do not need to raise cash anymore and can internally finance their future production expansion.
Mark, you planned to buy some AUMN if it spiked below $3.80 -- did you follow through on your plan?
I know I'm talking to an AUMN addict, but if we hit new highs in late December/early January, I would take AUMN off the table completely and start a new life trading the best setups you can find each day.
Who knows, maybe the Zen behind your AUMN experience was to forge the nerves of steel required for trades that scare the ---- out of the rest of us, enabling double-digit returns on a daily basis.
A big change in my attitude toward my AUMN position that occurred in the last couple of months is that I finally feel that my exposure to AUMN had swelled beyond what I would consider to be a core, and so I am now ready to gradually shed my exposure on the way up. So, from now on, I will not "miss" any rally in AUMN and will start taking profits starting from about $4.50, where my first sell limit order is placed.
If AUMN reaches $8 in early January on the back of the FOMC announcement on December 12 of extending the unsterilized purchases of long-term treasuries from OpTwist until unemployment comes down to 6%, then I'll be a happy camper. Based on my sell limit orders, I will sell completely all my January & April $5 calls, of which I have almost 200 contracts. That will leave me with only the shares and April $2.50 calls, which would be a *significantly* less riskier position.
As for a new trading style that I would use if I were able to convert my AUMN position into $1M of cash, I would probably do what 2nd_ave is doing now -- constrain myself to sit patiently for most of the year, until wild sell-offs in miners take place (there are always a few of them per year), and then open large positions when blood is running in the streets. Waiting for such sell-offs would require unhuman patience on my part, but I am now much more fit now for such a feat than before.
My take> the market disses insiders by selling off to retest recent lows and then some, only to reverse the morning after capitulation and rally into the New Year.
It's Thanksgiving again. Time for Alice, Ray and Bowcher the dog and the 8X10 color glossy photographs with circles and arrows and a paragraph on the back of each one to be used as evidence against us. Everyone get comfortable on the Group W bench there.... http://www.youtube.com/watch?v=m57gzA2JCcM
Gold moving above $1800 would significantly accelerate my expectations of AUMN rising above its September high of $7. Silver has been leading gold lately, implying that the risk is currently ON among the PM traders...
Technically, AUMN formed a classic cup-and-handle pattern since November 14, and at the close today broke decisively above that pattern. The next step would is to retest the highs from 11/6 at $4.2. Given the fact that SLV closed today at a 1-month high, even above the local peak of October 17, I don't think AUMN will be able to stay below $4 for much longer. After all, if SLV/GLD stay at least this high for the rest of the year, there is a definite possibility for the company to obtain a positive cash margin for Q4 2012, which should really excite the market and get them out of the woods, since positive cashflow companies do not need to raise cash anymore and can internally finance their future production expansion.
ReplyDeleteMark, you planned to buy some AUMN if it spiked below $3.80 -- did you follow through on your plan?
I know I'm talking to an AUMN addict, but if we hit new highs in late December/early January, I would take AUMN off the table completely and start a new life trading the best setups you can find each day.
DeleteWho knows, maybe the Zen behind your AUMN experience was to forge the nerves of steel required for trades that scare the ---- out of the rest of us, enabling double-digit returns on a daily basis.
DeleteIf AUMN hits new highs (i.e., above $28) in late December/early January, I promise to sell my position completely. :)
DeleteA big change in my attitude toward my AUMN position that occurred in the last couple of months is that I finally feel that my exposure to AUMN had swelled beyond what I would consider to be a core, and so I am now ready to gradually shed my exposure on the way up. So, from now on, I will not "miss" any rally in AUMN and will start taking profits starting from about $4.50, where my first sell limit order is placed.
DeleteIf AUMN reaches $8 in early January on the back of the FOMC announcement on December 12 of extending the unsterilized purchases of long-term treasuries from OpTwist until unemployment comes down to 6%, then I'll be a happy camper. Based on my sell limit orders, I will sell completely all my January & April $5 calls, of which I have almost 200 contracts. That will leave me with only the shares and April $2.50 calls, which would be a *significantly* less riskier position.
DeleteAs for a new trading style that I would use if I were able to convert my AUMN position into $1M of cash, I would probably do what 2nd_ave is doing now -- constrain myself to sit patiently for most of the year, until wild sell-offs in miners take place (there are always a few of them per year), and then open large positions when blood is running in the streets. Waiting for such sell-offs would require unhuman patience on my part, but I am now much more fit now for such a feat than before.
Delete"I finally feel that my exposure to AUMN had swelled beyond what I would consider to be a core"
DeletePerhaps you've reached critical mass, a point of no return?
I meant to say "critical orbit".
DeleteThe rally in the Nikkei has been unbelievable. Which is why it's believable.
ReplyDeleteMy take> the market disses insiders by selling off to retest recent lows and then some, only to reverse the morning after capitulation and rally into the New Year.
ReplyDeleteHas the market EVER sold off hard into Christmas and New Year's (2008 included)?
DeleteLast year pretty much sucked, if memory serves.
Delete2nd- It seems to me like to many people agree with your last take. I say very slow grind higher...Like a wedgie for those on the sidelines.
DeleteIt's Thanksgiving again. Time for Alice, Ray and Bowcher the dog and the 8X10 color glossy photographs with circles and arrows and a paragraph on the back of each one to be used as evidence against us.
ReplyDeleteEveryone get comfortable on the Group W bench there....
http://www.youtube.com/watch?v=m57gzA2JCcM
GRPN has damn near doubled off the bottom. What got into HEK near the close. Looks like risk on to me boyz.
ReplyDeleteFor the first time in years, investors in Research in Motion (NASDAQ: RIMM) have a smile on their face - the stock is up 57 percent from the bottom;
ReplyDeleteNOK is up 100% off the bottom.
DeleteZ is rising, TOF is probably right about this one.
Gold to $1800? This wouldn't surprise me, and I bet by then AUMN is back to $6
ReplyDeleteGold moving above $1800 would significantly accelerate my expectations of AUMN rising above its September high of $7. Silver has been leading gold lately, implying that the risk is currently ON among the PM traders...
DeleteHappy Thanksgiving, everyone! Thanks for sharing your ideas and teaching me different points of views on how one can trade this market!
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