Sold the DIG into the strong open yesterday. In 24.99, out 29.20.
Took down another 100 of the TBT at 45.51.
Updated after the close:
Near the open, another 100 of the TBT got taken out by a stop. In at 36, out 44.75. That leaves me with 500 on. Talk that Bernanke would buy the long end to effect QE. I guess the good thing about it is it means he still has a shred of credibility left.
NXG hit a trailing stop, 1.17, looks like a reversal. 5000, in at 0.65, out at 1.17. I'd pyramided some at 1.06 like I talked about last week, took it out at 1.23 on that big up day. Not a lot of money, but a good trade.
Gold's worth watching here. Above 916, you can squint and make it a reverse H&S out of it that targets to 1200. But a lot of the charts I'm looking at seem to have reversals after their big week last week. I could see it going to the low 800s from here.
Tuesday, January 27, 2009
Saturday, January 24, 2009
Gold pops his trendline
Of all the stock groups, that seems to be big story of the day. It obliterated the downtrend line that'd been giving it trouble for weeks.
I sell the rips. I'd let my gold positions get up to almost 15% of the account. Nothing, never ever, for any reason, goes above 20% of the account. I sold down 150 of the 1000 DGP.
In my ideal little chartist's world, we'd see a low-volume pullback to that trendline, where I'd put on some more. But, a 20% move has to be taken in this market.
Got hit on 400 DIG, bid 24.99 for it just to be difficult. Pisses me off that I could've paid 24.50 a couple of days before for all I wanted. That wouldn't have gotten hit. He ran all day, got stronger and stronger. If there's a strong open for oil on Monday, I may have to take that position down... can't turn away 10%, especially with these worthless double long/double short instruments.
Took off another hundred of the TBT. 36 handle to 45 handle. Suze Orman's recommendation has me freaked. Plus, you know, WE'RE IN A FUCKING DEPRESSION where, you know, LONG BONDS ARE HISTORICALLY THE SINGLE BEST ASSET CLASS. I'd just feel a lot better taking a little something off the table.
I was really regretting not hitting the SRS bid above 70 last week, so when we had a weak open, I let 200 of my 400 go near the open at 67 and change. Of course, it fell the rest of the day. You have to take every little win you can get.
The only thing I'm really down on here is the DDM I've been using as a partial hedge. Have to decide what to do with that... hate to take a 20% loss, hate even worse to let him turn into a 40% loss.
Now, in reading over this post, it sounds like I'm playing like a cornered animal. Which, when I think about it, is really the case. The job is getting very iffy at this point. If it goes away, this is how I'll have to make my living.
I sell the rips. I'd let my gold positions get up to almost 15% of the account. Nothing, never ever, for any reason, goes above 20% of the account. I sold down 150 of the 1000 DGP.
In my ideal little chartist's world, we'd see a low-volume pullback to that trendline, where I'd put on some more. But, a 20% move has to be taken in this market.
Got hit on 400 DIG, bid 24.99 for it just to be difficult. Pisses me off that I could've paid 24.50 a couple of days before for all I wanted. That wouldn't have gotten hit. He ran all day, got stronger and stronger. If there's a strong open for oil on Monday, I may have to take that position down... can't turn away 10%, especially with these worthless double long/double short instruments.
Took off another hundred of the TBT. 36 handle to 45 handle. Suze Orman's recommendation has me freaked. Plus, you know, WE'RE IN A FUCKING DEPRESSION where, you know, LONG BONDS ARE HISTORICALLY THE SINGLE BEST ASSET CLASS. I'd just feel a lot better taking a little something off the table.
I was really regretting not hitting the SRS bid above 70 last week, so when we had a weak open, I let 200 of my 400 go near the open at 67 and change. Of course, it fell the rest of the day. You have to take every little win you can get.
The only thing I'm really down on here is the DDM I've been using as a partial hedge. Have to decide what to do with that... hate to take a 20% loss, hate even worse to let him turn into a 40% loss.
Now, in reading over this post, it sounds like I'm playing like a cornered animal. Which, when I think about it, is really the case. The job is getting very iffy at this point. If it goes away, this is how I'll have to make my living.
Friday, January 23, 2009
Wrong, but in the right way
Totally wrong call on my part off the oversold reading. Everything's lower since then.
This week, I felt like the bad news out of Britain (nationalization rumblings) drove the news flow.
Positions are playing OK here.
TBT, put some more on with a 39 handle, took it back off yesterday for 5 sticks, primarily because Suze Frickin' Orman recommended it on her show.
Gold is hanging in there. This morning, futures look like it's going to pop above trendline.
Added some SRS, so I'm up to 400 now with a basis of 59. Wishing I'd hit that bid above 70 so hard it rattled teeth.
Couple of the microcap golds are playing well. NXG popped a multi-top and held it. Time to pyramid a little bit there.
Literally tons of oil charts - NE, DO, BP -look like they're basing. I tried for some DIG at 24.50, but just missed it. Look like they'll be coming back today as well, so being patient with them.
This week, I felt like the bad news out of Britain (nationalization rumblings) drove the news flow.
Positions are playing OK here.
TBT, put some more on with a 39 handle, took it back off yesterday for 5 sticks, primarily because Suze Frickin' Orman recommended it on her show.
Gold is hanging in there. This morning, futures look like it's going to pop above trendline.
Added some SRS, so I'm up to 400 now with a basis of 59. Wishing I'd hit that bid above 70 so hard it rattled teeth.
Couple of the microcap golds are playing well. NXG popped a multi-top and held it. Time to pyramid a little bit there.
Literally tons of oil charts - NE, DO, BP -look like they're basing. I tried for some DIG at 24.50, but just missed it. Look like they'll be coming back today as well, so being patient with them.
Saturday, January 17, 2009
What I did last week
This is a market where I think you have to be happy with 5% in a position and you have to be willing to take profits instantly.
I got two big things right - the overbought condition and gold's trendline resistance.
On the first thesis, I took an additional 300 DXD with a 54 handle. I took it down into the gap Wednesday at 61 and change.
I had on 300 FXP on with a basis of 32.47. I sold 200 into the gap on Wednesday at 45.25.
So that left me imbalanced a little on the long side. I took 200 SRS at 59.50. Whenever I put out a lowball limit order that gets hit, it always makes me doubt that I really want the position. We'll see... expecting a bunch of retail BKs to lean on CRE. CRE isn't really TARP-able... bankruptcy there isn't systemic, it just transfers ownership to the bondholders.
AGT is playing really well. Just playing for pocket change, took another 20K at .18, flipped him at .24. It doesn't matter how big the trade is, the important thing is to trade it properly and have a winner. He's making a nice little pennant here between .18 and .24.
So, right now, I have 20K of AGT on with a basis of .18. 5000 NXG with a basis of .65, he looks like he's having trouble at that important 1.00 resistance. Chart looks very wedge-y to me. Give him one more chance to crack it from this oversold market, then turn him loose.
Gold generally doesn't excite me. The bear case is, you still have the same issue with that downtrend line around 850. Bull case, well, that's a stretch... if it recovered to 900, you could squint and make that a raggedy H&S with a target of 1100.
Not thrilled by the charts in any of the stronger groups. The one I'm smacking myself over is missing the move in MO off that 15 level, especially when it's sitting right there on my screens.
One thing I am noticing, even though the charts are raggedy, water stocks seem to show outperformance every time we come off a low. But, the big ETF PHO looks like shit because it's so weighted in GE.
MeanGene did a good piece of work on the long-term picture for silver, which everyone should read: http://upstarttrader.blogspot.com/2009/01/silver.html
All 3 indices back to oversold and turning up with oscillator buy signals in that reversal on Thursday... man, that happened quickly.
The S&P held and finished right at the pivot at 850. Therefore, my inclination here is to lean a little long. I'm 55% cash, 25% long, 20% short.
I got two big things right - the overbought condition and gold's trendline resistance.
On the first thesis, I took an additional 300 DXD with a 54 handle. I took it down into the gap Wednesday at 61 and change.
I had on 300 FXP on with a basis of 32.47. I sold 200 into the gap on Wednesday at 45.25.
So that left me imbalanced a little on the long side. I took 200 SRS at 59.50. Whenever I put out a lowball limit order that gets hit, it always makes me doubt that I really want the position. We'll see... expecting a bunch of retail BKs to lean on CRE. CRE isn't really TARP-able... bankruptcy there isn't systemic, it just transfers ownership to the bondholders.
AGT is playing really well. Just playing for pocket change, took another 20K at .18, flipped him at .24. It doesn't matter how big the trade is, the important thing is to trade it properly and have a winner. He's making a nice little pennant here between .18 and .24.
So, right now, I have 20K of AGT on with a basis of .18. 5000 NXG with a basis of .65, he looks like he's having trouble at that important 1.00 resistance. Chart looks very wedge-y to me. Give him one more chance to crack it from this oversold market, then turn him loose.
Gold generally doesn't excite me. The bear case is, you still have the same issue with that downtrend line around 850. Bull case, well, that's a stretch... if it recovered to 900, you could squint and make that a raggedy H&S with a target of 1100.
Not thrilled by the charts in any of the stronger groups. The one I'm smacking myself over is missing the move in MO off that 15 level, especially when it's sitting right there on my screens.
One thing I am noticing, even though the charts are raggedy, water stocks seem to show outperformance every time we come off a low. But, the big ETF PHO looks like shit because it's so weighted in GE.
MeanGene did a good piece of work on the long-term picture for silver, which everyone should read: http://upstarttrader.blogspot.com/2009/01/silver.html
All 3 indices back to oversold and turning up with oscillator buy signals in that reversal on Thursday... man, that happened quickly.
The S&P held and finished right at the pivot at 850. Therefore, my inclination here is to lean a little long. I'm 55% cash, 25% long, 20% short.
Friday, January 9, 2009
Did some selling
Stop on SLW got hit at 6.25. In at 2.73, out at 6.25.
Bought part of the position back, 5.68. 2000. Out again on Friday at 6.15. This position is all done.
Held the SU, feeling like a fool, but got 24.01 for him. In at 18, out at 24.01. This position is all done.
Sold all 2000 of the GBG, the weakest of the golds. Just pocket change here, in at .91, out at 1.14.
Still way overbought, but encouraging how the S&P held that 896 level.
Going back to the overbought/oversold game to see if it works. Adding some index shorts, using DXD as a proxy.
Bought part of the position back, 5.68. 2000. Out again on Friday at 6.15. This position is all done.
Held the SU, feeling like a fool, but got 24.01 for him. In at 18, out at 24.01. This position is all done.
Sold all 2000 of the GBG, the weakest of the golds. Just pocket change here, in at .91, out at 1.14.
Still way overbought, but encouraging how the S&P held that 896 level.
Going back to the overbought/oversold game to see if it works. Adding some index shorts, using DXD as a proxy.
Tuesday, January 6, 2009
Overbought - careful here
General markets getting pretty overbought here. McClellan summation index, Moving average of A/D line, Williams oscillator as overbought as they’ve been in many weeks.
Very curious to see if the overbought/oversold game starts to work again.
No new buys into conditions like this, even though there are a lot of oil and gas stocks, basic materials, some tech, that looks pretty good.
Commodities generally acting oddly divergent. Oil starts the day strong, finishes weak, feels like a reversal.
In a mode where I want to take some profits, if for no other reason than to throw a virgin into the volcano. I don't have it on in this account, but probably start with some of the SU I have over in the long-term account, put on at 18 in December.
PMs started weak, finished fine. Almost lost SLW to a stop, actually felt kinda stupid hanging in there with it. Gold having trouble with its downtrend line (and its 200) since last June. Probably sell the weakest gold - GBG.
Be aware that I am frequently wrong, and often early even when I'm not. As a matter of general principle, perhaps just because it brings a sense of order and control to my universe to sell at a price of my own choosing.
Very curious to see if the overbought/oversold game starts to work again.
No new buys into conditions like this, even though there are a lot of oil and gas stocks, basic materials, some tech, that looks pretty good.
Commodities generally acting oddly divergent. Oil starts the day strong, finishes weak, feels like a reversal.
In a mode where I want to take some profits, if for no other reason than to throw a virgin into the volcano. I don't have it on in this account, but probably start with some of the SU I have over in the long-term account, put on at 18 in December.
PMs started weak, finished fine. Almost lost SLW to a stop, actually felt kinda stupid hanging in there with it. Gold having trouble with its downtrend line (and its 200) since last June. Probably sell the weakest gold - GBG.
Be aware that I am frequently wrong, and often early even when I'm not. As a matter of general principle, perhaps just because it brings a sense of order and control to my universe to sell at a price of my own choosing.
Wednesday, December 31, 2008
Long time, no post
Happy New Year to all two of my readers!
OK, it's hard to work full time, do the trades and think aloud in public. A lot of things kept me from writing... health and work issues.
I look at where I stood back in September and now, all those positions are gone.
Sitting here on the last evening of the year, the trading account is +26% for the year.
It's not really relevant, since I'm only writing about my trading account, but the gains don't come close to balancing out the ass-kicking my value-oriented advisors took on my behalf in a separately-managed account. The next time we sit down together, we are going to have to have a frank discussion about the value of trailing stops for winners and stop-losses for losers.
Let's fast-forward...
I went into October in pretty good shape. I was short basic materials (SMN) and gold (DZZ) over long Dow (DDM).
If you pull out a 1-year chart, gold was a head & shoulders top with the neckline at 850 that should've resolved to about 750. I had one batch on at that right shoulder in July about 950 and another batch when it broke the neckline. I put on a third batch when it pulled back to the neckline in August.
I took off the position when the physical metal hit 750, just a matter of discipline. This was a nice, tidy trade. It did just what it was supposed to do.
I had a lot of SMN on. That was my big, secular bet that the Chinese buyer's strike leading up to the Olympics wasn't going to end. If you looked at a broad range of commodity charts, you could see the world just fell off a cliff starting in early July.
It got up to 1150 shares at one point. Every day in the fall, just doing money management, I'd put what I thought were outlandish ask prices out there to take profits on the position. I'd put 100 out there asking +15, +20%... and get hit.
The problem was, as I took profits, I lost my hedges and started getting my ass kicked by the Dow longs. Should've taken them off at the same time, but I was still playing the overbought/oversold oscillator game that had worked so well for 15 months. It completely broke down in October.
I had two good trades in SDP (short utes) and EWV (short Japan).
If you pull out the utilities index XLU on a 2-year, they did a head & shoulders with a neckline about 36 and a target about 29. I couldn't figure out a thesis for it at the time, thought maybe they were predicting inflation? Of course, now we know it's because they're all debt monkeys and were going to have to pay much higher coupons for their paper. So I put on SDP in August. Same situation - as I took it off, I was left exposed on the long side.
Japan just had an ass-ugly chart. Nikkei broke longstanding support back in July. I sold this one really well into those gaps in October. Looking at it, Nikkei is trying to fill that same gap. Starting to look tasty on the short side right here.
The volatility all through late October and November was insane. At my best point, mid-late October, I was up 34% for the year at $202K, but I wound up taking off all my short-side stuff and giving back 10% of that in about a week in November.
I took a deep breath, got completely back to cash, and started playing for volatility. That worked for a week or so.
Bid on the long side -5%, ask +5; bid on the short side +5%, ask -5%, playing for lunch money. In the depths of November, I'd come in net long and get my ass kicked all over again. The newsflow seemed to be driving things. There wasn't a rational strategy you could play that didn't involve foreknowledge of events.
OK, so, where I am today...
Half cash. $95K
- After losing it once to a stop, long TBT, the double-short long bond. As manipulated as this crap is, owning TBT feels like walking up and slapping a cop. I have about $28K of this on. After yesterday, I'm basically flat.
I have no edge on what the Fed will or won't do. I'm just looking at TBT's inverse, the chart for TLT. Textbook exhaustion gaps. So I am long 800 TBT now at various points in that big floating island over the past couple of weeks.
- Long gold, watching that downtrend line very carefully, though. About $16K. Basis of 15.25 on DGP.
- Long a wee bit of gold microcaps (NXG, AGT). About $5K lottery ticket.
A few years back, I did some research on the gold bubble from '76 - 80. Until the final year, you were far better off owning physical metal than miners. The same has been generally true since 2002, due to extraction costs.
In the 70s, gold ran from 35 to 200, got cut in half to 100, then went parabolic at the end of the decade.
In the last year of its run, the best vehicle was stocks on the Toronto Venture Exchange, Canadian microcaps. It's hard to get good data from this period, but from what I've been able to piece together, the *average* junior miner on the TVE had a gain of 350% over the final year. If you could pick a single stock in the top 10% of performers, you had an average gain of 2800%.
A caveat: whether due to mergers, bankruptcy, whatever, not a single one of those tickers existed as of 2003. You have to be willing to take your profits.
So I decided on a strategy of building a basket of junior miners. They had to be cashflow-positive and have low or no debt. Any rate, I wound up with NXG from 0.65 and AGT from 0.18.
There were just some pretty, pretty setups in this group.
- Speaking of pretty setups, biggest (and best) position is long 4000 SLW from 2.73. I got interested because I'm aware of the difficulty obtaining physical silver. Watch how it behaves around that 8 resistance.
- 300 DDM, about 10K
- 300 FXP, about 10.5K.
OK, it's hard to work full time, do the trades and think aloud in public. A lot of things kept me from writing... health and work issues.
I look at where I stood back in September and now, all those positions are gone.
Sitting here on the last evening of the year, the trading account is +26% for the year.
It's not really relevant, since I'm only writing about my trading account, but the gains don't come close to balancing out the ass-kicking my value-oriented advisors took on my behalf in a separately-managed account. The next time we sit down together, we are going to have to have a frank discussion about the value of trailing stops for winners and stop-losses for losers.
Let's fast-forward...
I went into October in pretty good shape. I was short basic materials (SMN) and gold (DZZ) over long Dow (DDM).
If you pull out a 1-year chart, gold was a head & shoulders top with the neckline at 850 that should've resolved to about 750. I had one batch on at that right shoulder in July about 950 and another batch when it broke the neckline. I put on a third batch when it pulled back to the neckline in August.
I took off the position when the physical metal hit 750, just a matter of discipline. This was a nice, tidy trade. It did just what it was supposed to do.
I had a lot of SMN on. That was my big, secular bet that the Chinese buyer's strike leading up to the Olympics wasn't going to end. If you looked at a broad range of commodity charts, you could see the world just fell off a cliff starting in early July.
It got up to 1150 shares at one point. Every day in the fall, just doing money management, I'd put what I thought were outlandish ask prices out there to take profits on the position. I'd put 100 out there asking +15, +20%... and get hit.
The problem was, as I took profits, I lost my hedges and started getting my ass kicked by the Dow longs. Should've taken them off at the same time, but I was still playing the overbought/oversold oscillator game that had worked so well for 15 months. It completely broke down in October.
I had two good trades in SDP (short utes) and EWV (short Japan).
If you pull out the utilities index XLU on a 2-year, they did a head & shoulders with a neckline about 36 and a target about 29. I couldn't figure out a thesis for it at the time, thought maybe they were predicting inflation? Of course, now we know it's because they're all debt monkeys and were going to have to pay much higher coupons for their paper. So I put on SDP in August. Same situation - as I took it off, I was left exposed on the long side.
Japan just had an ass-ugly chart. Nikkei broke longstanding support back in July. I sold this one really well into those gaps in October. Looking at it, Nikkei is trying to fill that same gap. Starting to look tasty on the short side right here.
The volatility all through late October and November was insane. At my best point, mid-late October, I was up 34% for the year at $202K, but I wound up taking off all my short-side stuff and giving back 10% of that in about a week in November.
I took a deep breath, got completely back to cash, and started playing for volatility. That worked for a week or so.
Bid on the long side -5%, ask +5; bid on the short side +5%, ask -5%, playing for lunch money. In the depths of November, I'd come in net long and get my ass kicked all over again. The newsflow seemed to be driving things. There wasn't a rational strategy you could play that didn't involve foreknowledge of events.
OK, so, where I am today...
Half cash. $95K
- After losing it once to a stop, long TBT, the double-short long bond. As manipulated as this crap is, owning TBT feels like walking up and slapping a cop. I have about $28K of this on. After yesterday, I'm basically flat.
I have no edge on what the Fed will or won't do. I'm just looking at TBT's inverse, the chart for TLT. Textbook exhaustion gaps. So I am long 800 TBT now at various points in that big floating island over the past couple of weeks.
- Long gold, watching that downtrend line very carefully, though. About $16K. Basis of 15.25 on DGP.
- Long a wee bit of gold microcaps (NXG, AGT). About $5K lottery ticket.
A few years back, I did some research on the gold bubble from '76 - 80. Until the final year, you were far better off owning physical metal than miners. The same has been generally true since 2002, due to extraction costs.
In the 70s, gold ran from 35 to 200, got cut in half to 100, then went parabolic at the end of the decade.
In the last year of its run, the best vehicle was stocks on the Toronto Venture Exchange, Canadian microcaps. It's hard to get good data from this period, but from what I've been able to piece together, the *average* junior miner on the TVE had a gain of 350% over the final year. If you could pick a single stock in the top 10% of performers, you had an average gain of 2800%.
A caveat: whether due to mergers, bankruptcy, whatever, not a single one of those tickers existed as of 2003. You have to be willing to take your profits.
So I decided on a strategy of building a basket of junior miners. They had to be cashflow-positive and have low or no debt. Any rate, I wound up with NXG from 0.65 and AGT from 0.18.
There were just some pretty, pretty setups in this group.
- Speaking of pretty setups, biggest (and best) position is long 4000 SLW from 2.73. I got interested because I'm aware of the difficulty obtaining physical silver. Watch how it behaves around that 8 resistance.
- 300 DDM, about 10K
- 300 FXP, about 10.5K.
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