It's always difficult to 'explain' entries that I make during lunch. I watch the tickers, rotate to each sector that I follow, and in the process will occasionally come to a decision. These 'decisions' are not summoned (certainly not forced), and announce their arrival spontaneously. Kind of like a hunch. It's generally 1215 to 1230 when I'm fully aware of the move, and I remain restless until the trade is placed.
Now I don't believe in the gold trade. I think gold ultimately sells off. In fact, I don't have a single rational reason for making the trade. So it goes.
OK, now it's time to rationalize the trade.
ReplyDeleteWhy buy into a +2% move for RYPMX? Because no one else is that irrational. I think the 2% may be just the beginning.
DeleteEvery rebound in gold prices has been met with disappointment recently. The perfect change-up would be if the reverse happens this time. Not only do prices reverse higher, they do so with a vengeance.
Everyone waiting for 'inevitable' lower entry prices will be left behind.
DeleteWith sentiment in the gold sector at a low (heck, I've had plenty of fun trashing the miners recently), I think even the strongest of the weak hands dropped off in December. Now it's time to spike the sector back up hard to the point where they feel compelled to jump back in at any price.
DeleteFinally, not a single market analyst is recommending gold. Well, apart from the usual suspects.
Deleteone stock i've always kept an eye on as a proxy for miners is NAK. it has been rallying hard lately.
DeleteThe Japanese yen is tumbling.
ReplyDeletehttp://www.marketwatch.com/story/japanese-yen-tumbles-after-current-account-data-2013-01-10
Okay, so why are those golfers with lower handicaps still allowed to play on the same course?
ReplyDeleteOne site I visit posits the Canadian loonie may begin an assent, a second site thinks the Australian dollar is about to, along with gold.
ReplyDeleteCould they both be right? Wouldn't a gold rally tend to make both these currencies stronger?
ascent
DeleteNKA - Nice move there, could be real. Although, it's my understanding that when a pennant runs to completion like that the breakout is usually false.
ReplyDeleteSo, if it's real in this case then wouldn't it stand to reason that metals have likely some room to run and if that's the case then this should also be the tendency for markets in general?
Stronger commodities producer currencies suggests demand, right?
NAK - Forgive the typo...
DeletePAL - Yet another 5% day.....
ReplyDeletePlatinum is within $40 of gold and rapidly closing the gap?
ReplyDeleteJust read that Mark's article. I honestly don't know where he gets his info from other than what he is feeling in the market. I think a lot of successful investors have a feel for things but it must be backed up in part by some tangible things. i see some references to yields that people are getting which is a good start but when he is going on feel he should insert the caveat that he can be early by a magnitude of years just like he was in October 2004.
ReplyDeleteHaving said all of this, I do believe in the equity markets we will get a pullback between here and 1520 and the pullback will be sharp and around 7 to 10%...I'm expecting all time highs before we do get a 25% pullback but i have no idea if or when either of that happens. For now, I'm just paying attention to potential negative divergences and levels of bullishness as marked by % of stocks above 50 DMA, the NHNL chart, and RSI_EMA. otherwise the majority of our time should be focused on what's working now. beaten down blue chips is still the name of the game in my opinion. SNE, NIHD, ACI, RENN, YRCW, AUMN, NIHD, SID, PGH, VG are amongst several on my list. I think Japan and the Yen will be the trade of the year and depending on the severity of the move in the Yen, it could be the spark that lights multiple fires: first, jacking up the Nikkei and Japanese ADRs; second, if it drops too rapidly, causing a crisis in Japan and Asia that could be a potential black swan.
This comment has been removed by the author.
DeleteOkay, let's try it in English....
DeleteWe are reaching the previous highs which may be a place where we see a pullback, mainly because once the market retraces to previous highs, it takes a lot of gas to keep climbing and traders take profits. We're not that far now. It would be great if it just keeps going, but that never happens. Maybe this time is different?
It's a logical place to place stops just in case.
PGH is looking good. Pays around 10% to stick with it, the ex-div is coming up and it's forming a base. I used to be in this one, good for IRAs as the paperwork at tax time can be a PITA...but if it makes an s load, who cares?
Deletebot 400 shares FSLR at $32.44 yesterday which was just a few cents above my trigger buy point. One thing that concerned me was that FSLR had already rallied quite a bit and the first hour wasn't over. I think what I may do in the future is if the price target is met AFTER the stock has s big rally, wait until the end of the first hour of trading even though I may have to pick it up at a higher price. I would have saved $.30 or so if I had waited.
ReplyDeleteI've noted that this is a Landry TKO type trade even though I don't think Landry would have considered the FSLR chart. From what I've read he seems to prefer something with a steeper up/down trendline.
He looks at the slope of the MA's but he doesn't use trendlines per se. (the classic trendline).
DeleteThat makes sense. I may give his service a try while I work on my $2.00-$10.00 stock analysis program. I'm just about at my cash limit on how much I want to invest in these under $10.00 stocks until I see some results.
DeleteSo far, IRE +13%, PAM +4.9%, USAT +8.49%, NOAH -9.44%, EGHT -1.28%
EGHT was the one I thought had the best fundamentals. IRE had the worst and look how its doing.
I don't have stops on any of these, since the total dollar amount isn't that much. I'm still noodlin over that part.
So I looked at FSLR for laughs (I'm in SOL and SPWR) and Dave wouldn't have liked the pullback into the previous range after the breakout, but once he bought the last pullback (that would have triggered on the 3rd) and retrace, he would stick with it unless stopped out. The entry on this pullback would be above 33.68 to 34. Hopefully we keep going.
DeleteThx. He's strictly technical right?
DeleteYes, but simple bar charts (no candles), moving averages, no volume or other indicators. May throw in fibonacci once in awhile but it's rare.
DeleteUses slope of MA's, space between bars and MA's (over or under) doesn't really use a trendline (draws the arrow though) but notices steep trends and when they start to lose or gain momentum. Uses historic volatility and prefers stocks with relatively high HV. Prefers stocks that are not well followed, analyzed or popular as they move too slowly and he is looking to outperform.
I purchased a small position in CAMT today at $1.49. The last 2 qtrs have had positive EPS and the last qtr had positive free cash flow. I still need to do more work on forward guidance and earnings before I make any more of the positive EPS/Cash Flow purchases. This is a lot of work. I've looked at so many charts and financial valuations in morningstar that now everything is starting to run together. I suppose I should just slow down and buy more SNE and work on my fundamental analysis skills.
ReplyDeleteCompany Profile
"Camtek designs, develops, manufactures, and markets technologically advanced and cost-effective intelligent optical inspection systems and related software products, used to enhance processes and yields for the printed circuit boards, semiconductor packaging, and microelectronics industries. The company’s optical inspection computerized systems inspect components of electronic products for problems caused during manufacturing processes. "
Automated optical inspection is a fascinating technology.
DeleteThe Holy Grail here, once the system is proven, is integration into the production equipment for in-situ defect detection and analysis.
DeleteBig stuff for production equipment manufacturers.
I think we're going to start getting some happy talk on the debt ceiling - "we're close to a deal...both sides want to get this done...we agree on a lot of issues..."
ReplyDeleteMostly crap but I bet it makes the market happy. I read a lot of details about these last negotiations and I'm thinking they won't actually come to a deal this next time. These guys really seem to hate each other. So I'm thinking we get our drop after the deal deadline passes.
BUT, I'm sticking with the charts and using stops on my big purchases.
AMBS - MJ Fox was on Letterman show tonight, I caught last 30secs of it.
ReplyDeleteDown 28% today.....
DeleteHeading back to $.017 ?
DeleteNGas. UGAZ has now gapped back above Tuesday's close (the point from which it gapped down on Wednesday).
ReplyDeleteWhen I think about it, it's no wonder the average guy hands his money over to a fund manager.
DeleteWho's more sane? The average Joe, who pays up to have someone else handle it, or you and me?
DeleteCan we get a little sector rotation, please? I suggest into miners.
ReplyDeleteI'll believe it when I see it.....
DeleteTaking the small loss on VXX. (But thinking 'payback, bro').
ReplyDeleteCTE. Chronic Traumatic Encephalopathy. I was listening to someone talk about Junior Seau on KCBS driving home yesterday. Keep your kids away from games that involve repeated collisions with other players. Football's a messed up sport.
ReplyDeleteCraig- In retrospect, would you call the recent sell off in SNE a well-disguised TKO?
ReplyDeleteI could have made my year buying UGAZ on Wednesday and selling it this morning. But I would have needed someone like Michael Jackson's MD to keep me sedated for 48 hours.
ReplyDeleteSounds equally as dangerous as CTE.
DeleteBoth are debilitating and potentially fatal.
DeleteWe need to keep our kids away from UGAZ as well.
DeleteI'm beginning to wonder when/if winter will arrive my area this year, it's been quite mild.
DeleteNot here, bro. It's been quite cold (for Northern California).
DeleteGold season - Isn't Dec the historically strong month, or is every month the strong month?
ReplyDeleteWhy am I getting ads on my computer now for large women clothing all of a sudden. What did I search??
ReplyDeleteAMBS...I hadn't looked at that one in a while. TOF better be on his hands and knees kissing the sand at the beach.
Your posts often do indicate a strong interest in larger women.
DeleteYou may have researched a drug company with a weight-loss product?
DeleteGDXJ - Must be a carp stock..... Suck 'em in, spit 'em out.....
ReplyDeleteOkay, looks like gap up obligation is closed. Didn't take too long.....
Delete2nd- Looks like you might get a little rotation out of financials?
ReplyDeleteOpening GDXJ @ 20.06...
ReplyDeleteTypical action in the gold sector:
ReplyDeletehttp://www.kitco.com/charts/livegold.html
Which really is nothing compared to NGas.
DeleteYou could even say my recent forays into UGAZ were preparation for the gold trade.
DeleteMLNX - This one's been loitering around the corner of 49th and Main for a few sessions now.
ReplyDeleteCan you believe the ----ing headline on Marketwatch?
ReplyDeletehttp://www.marketwatch.com/?link=MW_Nav_FP
It's no freaking wonder gold sold off at the open.
Pretty sure I saw $1677 for an instant.
DeleteBAC - Penny pinchers battling it out tooth and nail, which side develops acute CTE?
ReplyDeleteYou mean from banging their heads on their desks?
DeleteThese pervs are banging Mark's fat chicks for all I know!
Delete!!!!!!!!!!!
Delete2nd- No, but now there is a add for a weight loss pill!
ReplyDeleteNSPH - Gap up obligation at $2.90, how many sessions will this exercise in patience require?
ReplyDeleteGMO - Back to $4, hoping there's a bit O' bad news that can be bought.
NLY - Surprise shelter from the s**t storm?
Rosie: "Before the onset of QE, the Fed's balance sheet had a historic 20% correlation with the S&P 500. But since 2009, that correlation has surged to 85%."
ReplyDelete"In other words, there is actually a tighter relationship now between the stock market and the central bank balance sheet than there is between the stock market and corporate earnings."
That's great info, FED balance sheet is large, stamped "Made in America" on one side and "Size small" on the other.
DeleteThat's one formidable wall of worry for gold.
ReplyDeleteEach time prices start climbing, they slip right back.
DeleteAn Alp ice tool, maybe.
DeleteIs there currently a sector with more negative sentiment than gold?
ReplyDeletehow about shorts?
DeleteReal estate shorts (SRS)?
DeleteMaybe shipping?
Landry: "The Ps made it to new multi-year highs. Make no bones about it, this is a good thing. I do have some concerns though. The market remains very overbought. As I've been preaching, I'm not a big fan of "V" shaped recoveries at high levels. It's very hard for a market to mount a new leg on top of an old one. Said alternatively, it's very hard for an overbought market to become super duper overbought.
DeleteHere's the dilemma: Overbought markets can create a darned if you do and darned if you don't scenario. If you buy into them, they correct. And if you don't, they leave you behind.
Ideally, I'd like to see the S&P break out decisively and then have an orderly pullback.
So far, the Quack still has a big picture retrace look to it."
"In general, things continue to improve. Like the Ps, more and more areas are banging out new highs. These include (but not limited to) Foreign Shares, Banks, Financials, Chemicals, Drugs, and the Transports (to name a few). And, there are some speculative technology stocks rallying off of low levels. Ditto for selected metals such as Aluminum."
"Again, I still think we are in a stock pickers market. For now, I'm focusing on stocks that can move independently of the overall market. On the long side, I still like the more speculative issues that have just rallied off of low level bases (e.g. Solar recently). Aforementioned Aluminum could set up soon. On the short side, I like stocks that have just begun to roll over from high levels. If the market tanks, so will they. And, if the market rallies, they could become a source of funds..."
Gold might qualify as a more speculative issue that has just rallied off of a low level base. In the very, very early stages, though.
Deletefor what it's worth on the screen that i normally do for cheap stuff a lot of inverse ETFs and volatility ETFs came up.
Delete"it's very hard for an overbought market to become super duper overbought. "
DeleteNot exactly an argument in favor of inflation, wage inflation seems unlikely based on that premise as well.
Sure would be nice if the broad market just moved sideways for a while.......
At some point both pm's and volatility will be the trade.
DeleteI think gold has found the ST bottom and the low in sentiment required.
Volatility will rear it's (ugly?) head at some point, we have a 100% retrace and upcoming political prick season. They won't be able to help themselves.
Not even God can help stupid.
100% retrace of what?
DeleteS&P 147>134>147
DeleteSure, long term inflation wins due primarily(in my theory) to "hysteresis losses". This is because bankers are in whole, terrible money managers and absent inflation and other forms of welfare they'd be out of business.
DeleteS&P retrace - Sure, I can see the potential for that happening. I don't expect it should create reason for PM to rally?
DeleteIn the long run. But timely correlation is another matter.
DeleteI'm just looking at the chart re: Landry today. We are overbought on a 100% retrace and it's hard to mount a rally on top of a 100% v shaped retrace.
The dilemma? Buy and it corrects, don't buy and it rally's. It's time to just sit unless you are looking at those basing patterns. Then at least you have a defined stop.
SKF - Financial shorts feeling kinda numb?
ReplyDeleteRitholtz strikes again....
ReplyDeletehttp://www.ritholtz.com/blog/2013/01/long-term-inflation-wiemar-europe-us-south-america/
Gold - Another reason gold might be priced considerably higher than where it should be?
ReplyDeletePlatinum is usually priced higher than gold, and platinum is having difficulty hanging onto it's gains even while South African production is in turmoil and auto manufacturing is recovering.
Maybe the big boys stocked up their warehouses to the rafters while prices were rock bottom and are now distributing?
"Gold season - Isn't Dec the historically strong month, or is every month the strong month?"
ReplyDeleteThis year all seasonality has been screwed up, since gold usually rallies Sept-December, but this year it has been going down in these months. The only way to win with the gold trade, IMO, is to simply use a longer time horizon (several years), over which the steady printing of paper currencies at record rates will inevitably push gold up.
A longer time horizon. In other words, longer than a day.
DeleteStill in GGN. I think this is the vehicle. Gold that pays a dividend.
DeleteFolks, check out http://www.businesscycle.com/. On the top left, we have the stern face of Achuthan and a video of his latest public appearance titled "Recession Underway." On the middle right, they have a chart of their US Weekly Leading index, which has printed a 1-year high this morning. :) That was one short recession, I must say. :)
ReplyDeleteLOL, a recession wrapped within a recession I guess.
DeleteAnyone here have AR-15 parts? Bottoms and mags? If so you are doing better than gold.
ReplyDeleteWouldn't want anything to do with AR-15 parts.
DeleteMe either, but I have some friends that were big traders who bought stripped lowers for $65 that now sell for $300. So I was looking at what was going on with some of this gun control craziness and went to some web sites. Even if you wanted to buy an "assault rifle" you couldn't. They are sold out and back ordered into the future as far as the eye can see.
DeleteThese gun nuts are fricking crazy scary.
"Before the onset of QE, the Fed's balance sheet had a historic 20% correlation with the S&P 500. But since 2009, that correlation has surged to 85%."
ReplyDeleteIt looks like this correlation is a thing of the past: the Fed balance sheet has expanded significantly since QE3 announcement in September, but S&P is flat over that period and gold/silver are down (even though gold/silver showed a very large correlation with the balance sheet up until that point). Things work only as long as they do...
???? Flat???? From 2009 to 2012?
DeleteSPY 67 to SPY 147 is flat? I think you misunderstand what he's saying.
I see what you are saying, but don't you think it's a bit early to make that determination?
DeleteOther forces....
DeleteThe prospect of Romney shitting the bed.
Higher taxes on the big money.
Tax selling into November then the retrace.
It doesn't mean that correlation is over, it means something bigger than QE OR PE's happened.
Look at what happened in the first few days of this new year. Tax selling exhausted, rally back to Sept levels.
Well, when making investment/trading decisions, we have to look into the *future*. Also, we have to consider other "hidden variables" that may explain the movement of S&P, besides the expansion of the balance sheet. Hussman, for example, has uncovered another interesting relationship: QE1 and QE2 were announced when S&P was down significantly over the previous 6 months, and hence it was natural to observe the rebound in S&P during the corresponding expansion of the Fed balance sheet. However, QE3 was announced when S&P was at a multi-year high, and Hussman made a forecast, at that point, where he said that we won't see any surging in S&P as a result of this announcement because there was no pessimism in the market that could be reversed, causing a wave of buying. So far, things have worked out exactly as he predicted...
Delete"Higher taxes on the big money."
DeleteMy understanding big money inserted strategic pork into the bill to compensate any differential and I'll guess, then some.
"Win"-WIN
"we won't see any surging in S&P as a result of this announcement because there was no pessimism in the market that could be reversed, causing a wave of buying. So far, things have worked out exactly as he predicted..."
DeleteThat's a pretty good observation, although the flavor of QE was slightly modified wasn't it?
Sadly, I've lost track of the numerous gyrations, myself.
Yep CP...they sold at 2012 tax levels, got to keep their offsets in the compromise (kept their write offs) then bought em' back Jan 1. Win/Win indeed.
DeleteLuckily I was watching their income/div payers get shellacked into 12/31 and I was a buyer.
So far so good.
$WTIC - I suppose we could watch this one closely if we're looking for signs of a downside reversal.
ReplyDeleteA record low number of comments at CC today. One comment thread has caught my eye:
ReplyDelete*****
Precious Metal Fatigue
Submitted by 14them34me (243 comments) on Fri, 01/11/2013 - 10:35 #116680
is anyone out there feeling precious metal fatigue ?
Re: Precious Metal Fatigue
Submitted by c3wands (53 comments) on Fri, 01/11/2013 - 14:06 #116683 (in reply to #116680)
Going on two years now.
*****
I think that's how bear market are supposed to end -- in a total disgust with some sector, which just can't go up. People just turn away and forget about it. We might be there with the PM sector, after it completely failed to respond to QE3 and QE4 announcements, which was the last hope of those trying to stay long.
My sneaking suspicion is the FED just keeps throwing some portion of the money they print to compensate the PM shorts for "services rendered".
DeleteUnfortunately, judging by the latest COT report, we are still far away from the sentiment bottom in gold/silver. The net long position of small speculators in silver was 13K contracts and in gold 35K contracts, which is the lowest since the QE3 announcement. However, it is still much higher than the 7K/23K positions for silver/gold in late July and 4K/25K positions in mid-May.
ReplyDeleteOn the other hand, even long-term gold bulls are ready to take a break in 2013, expecting gold prices to fall:
Deletehttp://seekingalpha.com/article/1107691-gold-yes-it-will-drop-no-don-t-short-it
So we definitely don't have the euphoria that was temporarily present after QE3, when everyone expected gold to explode.
At least AUMN's in the green today.
DeleteLeads to the question that if tail-winds couldn't generate an assent then maybe head-winds will?
DeleteYep, that was a nice finish for AUMN. I think traders are really looking forward to Q4 production numbers, which should be released next week (they usually release them within 2 weeks of the quarter's end).
DeletePNPFF also had a decent finish today. Maybe the traders are realizing that the recent pullback in gold/silver must soon be reversed, as brand new 85B $USD are printed every month by the Fed now...
Deleteascent - that's twice now...
Deletewell I had a relatively busy day today. I sold those TZA / EDZ positions...EDZ was a good one. Bought it at $8.68 and Sold it at $8.91-2. Bought TZA at $11.98 and Sold it at $12.10. I put all of it into SNE today. Now almost fully loaded in SNE. I'm actually comfortable holding a stock for more than a month for the first time in a while.
ReplyDeleteSeems like PM bugs have become somewhat more conservative, it's a real testament to them for closing those open gaps immediately.
ReplyDeleteA perfect flag has formed on the AUMN chart over the past month. I bet this flag breaks to the upside this time, causing a massive move up. Hopefully it happens next week, 'cause otherwise my January $5 calls will vaporize next Friday...
ReplyDeleteMake it so!
DeleteAUMN - Volume was low today, not many sellers remaining I guess.
DeleteAnd someone was buying the close too, it looks like.
DeleteMCP - Are the booger bears done selling this thing?
ReplyDeleteEducation stocks are looking really really good. Knockout blow by APOL to clear out stops before ripping it higher. COCO, CECO, EDMC...
ReplyDeletehere is my watchlist...lots of good ones here with similar basing pattern setups. look for breaks above the 150 day moving average and / or 10 week EMA. if something has broken above it try putting an order right around the moving average for a low risk trade.
ReplyDeleteperfect example of the 150 Day MA being a key spot: REDF.
http://stockcharts.com/h-sc/ui?s=REDF&p=D&b=8&g=0&id=p02317424745
Look at how it traded up to it twice in the past 3 months only to explode through it today.
The third time's a charm, eh?
Deletelooks like it huh?
DeletePullback of 100% retrace or not?
ReplyDeleteLet's consider the possibility that the big boys are looking to buy lower what they were dumping into year end for tax purposes? Maybe they know of, or will shortly be coordinating their next s**t storm assault?
new post
ReplyDelete