What a great week

I have been accumulating my miner positions since before Christmas, as I saw the life stir in them again, and last week I posted on miners to buy at certain price points, and then Bernanke spoke and the reaction was much stronger than I imagined.  Buy stops hit on shares I have been watching and I bought calls on GLD and SLV within a minute of the release (I closed them both, along with my MCP Calls today).

I also abandoned my SDS position as a dead trade.  The reaction was too strong, and although I do not have a buy signal on SPY, with all of the liquidity seen and unseen coming into the market from around the world, shorting is going to be a losing bet for me, so I will stay away from trading it.  I still believe we have a retracement coming but not sure how strong.  The one short I will take is puts on EDC on a sell signal, the price is high enough, and the moves strong enough to be profitable.

Where I sit now, I am back to nearly 100% long from 150%, Wednesday to Friday.  Most of it is in miners.  I am also trading long GOOG calls as a reaction trade from the selloff, and MA calls on a buy signal I have (above 350 close validates it and a 380 target area).  I am also in Halliburton again as a trade.

Below are three favorites I will be entering or adding to as appropriate.  Have a great weekend everybody.

Four Energy names as potential shorts

These four hit or are approaching my sell signals, and are on my watch list.  The first two are ready for a trade now though.  These are short term opportunities.

The SPY orbital launch

During this rainy Saturday in Southern California, I have looking at a lot of charts and marveling over the incredible low volume ramp in the SPY.  This is during peak earnings for this cycle and decelerating GDP.  The rationale is the FED already started QE3 through the back door to Europe, and we are getting the additional kick off of the LTRO.  All may be and is probably true, so I looked to see how QE1 and 2 impacted SPY, from an absolute level, the duration, and the speed of the ramp.

All of these numbers are rounded, but serves the purpose of my post.

QE1 one Started early March 2009, and went for approximately 56 weeks.  Price rose from 67 to 121, a 180% gain. the speed I assigned was .032 using simple division.

QE2 started the beginning of September of 2010, and ran to the middle of March of 2011 for 30 weeks.  Price rose from 104 to 135 for a 129% gain.  The speed was even quicker at .043.

QEstealth started the second week of October 2011 and let's assume for arguments sake ended on Friday.  This is a 14 week ramp, with prices moving from 107 to 132, a 123% gain.  The speed number .088.

The gains have been a diminishing commodity, with the speed of ascent at an accelerated rate.  To boot, volume is abysmal. We also now have negative margin debt levels.  Bernanke better show up this week in a helicopter as this market has front run just about everything else.

For me I enjoyed the ride higher in miners, and established a short position the first week in January with SDS and selling OTM one strike weekly calls against them.  Friday, I added Feb EDC puts.  I also put on and aborted oil and silver shorts taking my losses quickly.  I will trim my miner positions on Monday and Tuesday and go with my gut and the cycle guys in looking for a correction starting this week.

The corrections have been larger and longer going from 16 to 22% and averaging 3-4 months in the process.  An interesting note is that there is only an initial slight retracement and then a push to higher prices over 1-2 months, then the big sell off.  I am still looking for a profit taking event to the mid 120's then an assault to a double top, but I won't be surprised it it simply falls from here, but it does appears that the next earnings season puts a feather in this cap.

SPY- Major levels reached

I am still short with SDS and sold Feb 18 calls.  Cost basis is now 18.44.  I closed my silver and oil shorts yesterday, too strong to mess around short.  I also added to my long miner positions, bought MA, and re-added HAL on my buy signals.

OK, SPY to the SKY?

A potpourri of charts

I am heading out for the day so I combined my other charts into one post.

AUMN-Coming Back to Life

Edit, I drew my buy line wrong.  I bought my trading position at $6.60, on the bull flag breakout, not $5.60.  Sorry about that.

Great Panther - Stalking a Buy Point

Over the next two days I will post my favorite stocks I will own and/ or trade on the next intermediate commodity upswing. Below is a chart of Great Panther, enjoy.

Anatomy of a Trade; AUMN

Accumulating AUMN

I have been accumulating AUMN as a longer term play.

Danger Will Robinson

I will let these three sets of charts speak for themselves.  I already have sell signals on SPY, Risk and SLW.  This market is flat topping to boot.  Per my cycle guy @Tradepoly on Twitter we are due for a pullback, as well.  Enjoy and follow the actionable signals.  Hat tip to Mcclellan Oscillators, Kitco, and Market Montage respectively.

FXE - Bear Flags

FXE keeps stepping down in a series of bear flags.  This will create increasing difficulties for Dollar and Yen carry traders.  Also, our Multinationals derive substantial profits from a weak dollar, and this Euro weakness create headwinds and estimate revisions.  My view is a retracement beofre we move higher on our own QE extensions.

Toro on GORO

GORO has had a 30% run since the October lows, and with this impulse we are now in a positive longer term accumulation on this stock.  My recommendation is to let the stochastics reset and start accumulating.

I have trimmed my miner positions back down to a core as I see a retracement coming (divergent Stochastics) and overall low volume up in the market.

Once the market takes some profits here I will be heavy in my miners again, along with my energy plays.  Comment if you want a take on any particular stock in the hard asset space.

SPY-Where to now?

I also trimmed about 40% from my long miner and metal positions as the moves were just too big to not take some profit.  I believe we are still very correlated and everything will move with the index.

Something to watch is when the dollar bottoms, EDC puts will be very profitable. The cycle guys are flashing the yellow flag for a trade able dollar bottom. If you don't follow cycles I suggest you follow @tradepoly on Twitter and go to www.likesmoney.dojispace.com.

Enjoy.

SPY-IHS is in play

As I suspected SPY looks like it will run to at least that downtrend line above 130.  The conservative SPY holders should remain long, and if short set a stop at the open to see if we get some morning profit taking.  I intend to set my SDS stop below price at the open and move it up if the trade goes my way, then close both my ITM option and SDS.  My GLD calls and long miners will be up nicely today and none look ready to trigger a sell signal.

Happy New Year

Happy New Year everybody, this is going to be an exciting year. To me, this is a year of forced decisions;  the FED and the ECB can no longer massage the markets with soothing words or incremental actions.  They will print aggressively or step aside.  Hmmmm, I wonder what they will choose.

The sovereign nations must make some decisions themselves.  Austerity will not work, and they will either choose to relieve their people's burdens or their elite.  My view is they will opt to force the ECB and their banks to fully engage in this monetization of the debt they started last month, thus pushing the problem out 1-2 years.

Our "Independent" Central Bank will crumble (or align, depending on your conspiracy views of the FED and the World Socialists) under political pressure and will print hard going into the election season.  China and Japan are already in full ease mode as they look into the abyss of collapsing exports.

This leaves decisions for us as traders and investors, and in order for me to look forward, I must look back.  What I saw that worked best for me was to take larger trades around extreme momentum and A/D areas "after " they showed reversals and to watch for the cycle turns. So I refined my Technical indicators to give me the best shot at my trades and keep me on the right side of these trends.  I also took off leverage and traded straight shares more, focused more on a smaller universe of stocks, yet at the same time expanded from my focus on gold/silver miners only.  My categories are grouped in the following manner:

• ETF's- SPY, QQQ, USO, GLD, SLV, SLW
• Four Horseman of High Beta- AMZN, AAPL, GOOG, CMG
• Miner Juniors- EXK, AG, AXU, NG, IAG, RIC, SWC, MCP
• Energy-TPLM, PCX, HAL
• Dollar-EDC, EDZ

For the ETF's I am either long or short those or a derivative such as SSO, ZSL, SDS, etc. The Horsemen, I play long only at extremes with options, the remainder I am in long only on my signals to buy them.  My favorite is AG.

I think it is going to be a big year for commodities.

So going forward this is where you will see my focus on the blog.  I will tweak these over time if I see an opportunity but the beta and volatility will allow me to make plenty of money with these.

I am also going to try to Twitter this year.  This blog has had nearly 100,000 page views in the past 2 years with me just dabbling.  I intend to be more intentional, and to also add some actionable trades real time (please read my disclaimer though).

I am going to tweet my SPY buy and sell signal, and what I do with the signal is buy either SSO or SDS, and will set a weekly sold call over it to increase the odds of a profitable trade.  Depending how aggressive you are is how you play it (hedge it or not hedge it).  This signal will chop in consolidation, but will more than make it up on the trend runs we are getting 1-2 times a month.  It's free, so follow me if you like @Bobloveshawaii.

My sell signal hit on Friday PM, so I am in SDS, but I do not trust the low volume EOY action so I sold 1/6/12, 19 calls. My view is we start the week on a positive note, so will see if my signal reverses on Tuesday.

I am long the miners, energy and GLD on my signals.

Happy trading.