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Thursday, May 26, 2011

Portfolio change

A change has been made to the model portfolio.

157 comments:

  1. Gary,

    what happened to 'the relentless move with few down days' over the next 10 days; Off the table, just like that?

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  2. I just bought in on the dip this morning, but I REALLY don't want to go through what happened before again. Think I'll get out here and wait for the A wave, whenever that might be. Thanks Gary.

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  3. Bruce,
    If we were going to have a relentless move higher then it shouldn't be dropping with a weak dollar now should it?

    If the market tells us something is wrong then I've found the best thing to do is not argue with it no matter how strongly I feel it should be going the other way.

    This is going to be a very volatile market now that the silver parabola has broken. Be prepared to turn on a dime at a moments notice.

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  4. Gary, good morning. Hope the shoulder feels better. You weren't kidding about turning on a dime. I suppose this could be an example of pre-market behaviour; often the POG and POS are down at 6:00 EST on eventual up days and vice versa. Since I cannot sell anything for a few hours, I guess I'll wait and see. I have enough of a profit cushion from last week (some miners up considerably) that I do not need to panic.

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  5. couldn't this just be " one of the few down days", we are getting shaken out far too easily

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  6. yesterday GLD retraced up to the 38.2 fib line of the decline at 149.40 ... a logical place for stiff resistance.

    Maybe GLD just needs to regroup ... after all, bull markets go up, correct or consolidate, and get going again.

    Maybe to predict $100 moves in a couple weeks time, isn't logical.

    I ain't bailing, yet.

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  7. Gary,

    Isn't due to rollover options?

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  8. When is the expiration of futures contracts? and could this be causing the drop? Any historical trend of this happening? Anyone with knowledge about this?

    Secondly, technical analysis from the Oil N' Gold site have repeated marked a resistance at gold 1526.80. Is this a Fibronocci #? Yesterday Gold showed no ability to clear this hurtle.

    Comments please, as I need to make some decisions today.

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  9. Make that hurdle, I've been up all night watching Kitco.

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  10. Gary's right, this $2 reversal is not healthy action at all, especially with the dollar down so much. However, it's still early and I think silver will regain most of it's losses by 9:30 open

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  11. Silver seems to be leading gold now, rather than the opposite.

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  12. If memory serves we have seen violent shakeouts the day before options-expiry several times over the last few months.

    In the current climate Gary is of course right to be cautious, but this morning's volatility smacks of options shenanigans to me, and as such should pass by tomorrow.

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  13. Oh the joys of trading a bipolar market. Not much down time there Big G for just having had surgery yesterday.

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  14. Given the dollar's weakness, it is surprising that PMs are down overnight. I can understand silver, where there are likely still folks trying to 'get their money back'.

    With gold, where the early May decline were only a modest correction, this doesn't make as much sense. Still, a nice looking Doji in gold yesterday and we are definitely looking like we'll get another swing high today.

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  15. Hey Fergie,
    You're up early. The shoulder hasn't bothered me at all. This is the easiest surgery I've ever had. I haven't had to take any pain meds, which is great because I hate that crap.

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  16. Gary,

    GLD just filled a gap from a couple days ago at 147.75 ... don't u think that had to be done before continuing up?

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  17. You've just confirmed what many here have probably already thought. . .you're part bionic man. : ) The rest of us mere mortals would be on bed rest still.

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  18. I think if gold was going to make it to $1600 by next Friday it shouldn't be dropping at all, especially not with a weak dollar.

    And silver is in trouble. Down over two dollars from the overnight high. What does that remind you of?

    It's not important to me to sit around and watch my profits melt away and my GLD position lose money on the chance this might be options related.

    The big money will come at the intermediate bottom. I'm going to make sure I get there intact.

    And I'm not going to make the mistake of getting caught in another gap down open and then sitting there like a deer in headlights.

    This isn't doing what it's supposed to do so I'm out. Silver on the other hand is doing what we would expect from the coil.

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  19. Won't be around today. I'm putting stops just above my entry on gdxj at 35.22, If it gets hit, I'll live to fight another day. I hope this reverses and goes higher today.

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  20. Last nigtht TZ posted about gold getting taken down today,good one TZ. Maybe short term influx of money going into euro leaving $ and gold a little droopy along with expiration? None the less, had order in on DGP, thanks for the quick post Gary. Canceled order. In on SSO yesterday a.m., Gary do you see any reason to expect weakness in Snp because of this? Good news on the wing. A few handfuls of msm and you`ll be leaving smoke trails up the side of the rock. :)

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  21. This is a bull market, not sure why you think Gold must hit $1600 in 2 weeks. Sure that would be super nice, but that kind of move is too tough to predict.

    GLD just ran from 143.50 - 149.50. if one had options, they may have caught a double... seems a logical place for profit taking. To expect otherwise is unrealistic.

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  22. gold and the S&P are two different assets and in completely different timing of their daily cycle.

    The S&P is due to bottom and gold is late in its intermediate cycle.

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  23. Haggerty,
    Good move, no point letting your pile get beat up. Yeah this thing is just turning into a blender, who`s knows which way it will ultimately shake out.

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  24. Bruce,
    I expected the gold cycle to top when the dollar cycle bottoms. Dollar turns have been occurring on the employment reports. That's due next Friday. By next Friday gold would be late in it's daily cycle.

    As a matter of fact gold is already entering the timing band for the move down into its daily cycle low. I just expected the weak dollar to continue to drive it higher. It's not doing it.

    If you want to take a chance and continue to hold this late in an intermediate cycle with the sector not acting right be my guest. I'm not.

    I'm content to take a small profit and wait for the intermediate bottom where I have the odds heavily in my favor.

    We probably need to get used to this kind of trading. Other than the A-wave this is probably how things are going to be for the next year or so.

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  25. Looking everything over, I feel a lot more comfortable with the SnP too. Gld going up, DGP going down, nice..........

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  26. No harm in ever getting out of a trade. To be honest getting in this late the IT cycle was always sketchy, IMO. The money was made getting in two weeks ago at $1,477 with the tight cycle low stops, now we're sitting strong handed.

    Gold rallied two straight weeks with a sharply rallying dollar, surely we can get it the benefit of doubt this morning. 5 straight up days and an options expirations warrant some weakness and we're only at yesterdays levels. If you only just got into the trade I understand you want to keep a tight lid on this one though.

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  27. It's not gold that has me worried. Gold isn't acting that bad. It's the coil in silver that looks like it's trying to reverse already.

    If silver starts to collapse again I think it could abort the gold move.

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  28. Silver rallied just enough overnight to tag the 38% retracement and stopped just shy of making a higher high.

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  29. I doubt the broken parabola, a shell of its former self, has any significant pull on it's dwarfing brother. I prefer the gold/dollar cycle here and a simple profit taking event as an explanation for a few dollar drop. Of course any outcome is feasible and cutting the trade when it's clearly reversed. I say thats way too tight a stop and will run with the still established upward trend.
    But like you've said, the upside potential fro here is limited, so waiting for the post IT cycle low makes plenty of sense too.

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  30. If 148.14 holds EOD, I am staying long gold. Gold sold off as Europeans sold gold and silver when their currency rose. U.S. is buying it back.

    Gold contracts are still rolling.

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  31. U.S traders want to be long gold, gone green!

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  32. For those confused by Gary's change, the model portfolio is designed for low risk, long term gains.

    Gary, if you feel gold is just a intermediate correction, is the IT low where you will place trades again for the model portfolio? No trades for the IT high?

    Thanks.

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  33. Yes I will take the model portfolio heavily long precious metals at the IT bottom.

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  34. Gary, that IT cycle low sure does seem like it my come as in previous years, right at the end of summer. Throw in yet a possible 3rd low, could be a very, very rewarding 2nd half of the year.

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  35. fwiw, there was NOT a lot of volume on the overnight Gold selloff. And there was more up volume on the bounce this am.

    In contrast, silver had decent volume on the sell down.

    I ain't bailing yet. I think GLD hangs in there and will see yesterdays highs, maybe by next week.

    Then we see about pushing past 150.

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  36. Gary,

    I have a question: are you staying long Gold ( and afiliates) on your aggressive portfolio because you can weather the storm?

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  37. Will the model portfolio ever go 100% long? If not, what's the highest it will get in one asset class?

    Thanks

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  38. Gary

    isn't today day 15 of the gold cycle?

    gold and silver seem to have recovered their losses... still have concerns?

    not

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  39. About 75% is the highest I will take the model portfolio unless it's an intermediate or D-wave bottom.

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  40. Not,
    I'm happy they came back and I don't have to sell into a big gap. But I'm still selling.

    With the dollar down this hard gold should be rocketing higher. It's not.

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  41. Gary,

    I assume your position on the SPY remains?

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  42. Time to buy some SLV puts?
    :)

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  43. wow gary

    i guess you were right... we only had a few minute to act this morning and not lose too much...

    thx

    not

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  44. I sold my gold positions around $1,525 today and am feeling good about it. Thanks Gary for the overnight call.

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  45. Thanks Gary, good call. It reminds me of the old westerns where the scout had a premonition about imminent danger.

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  46. I am out of all PM related stocks. GLD breaking below 148 was my trigger. Sorry not to post earlier, but it's been a busy morning :-)

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  47. Sold all my GDX and GDXJ plus almost all the GLD calls and purchased slv puts july 34, small positions anyway. Waiting for D wave bottom.

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  48. I'm not selling anything yet, but its getting close to my stops.

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  49. me neither...TZ, are you buying yet or tomorrow?

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  50. This comment has been removed by the author.

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  51. This market is somewhat aimless. Day 4 in cash.

    Watching the USD like a hawk...a bored hawk. One that takes naps now and then. Anyway, I think we may get decent buying opp with the USD moving into its timing band for a DCL. Again, EUP, DUG and SKF are my vehicles of choice these days.

    I'm looking at some put selling strategies to see if there may be a way to generate a little cash here as the USD drops.

    f

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  52. Guys, when is your best guess for the intermediate (or D wave) bottom?
    I am travelling from mid june - mid july and I would prefer to stay away from trading...

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  53. sold all my PM positions this morning, broke even.

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  54. Gary et al,

    It seems that the market is either forecasting that a dollar low/reversal higher is imminent, or we are in an aimless market that is better left alone as it will just chop up trades.

    I have found that transition periods are a good time to watch the play from a bit of a distance until the market decides what personality it wants to morph into.

    There are times when direction is obvious, and times when it isn't. Right now, it isn't.

    f

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  55. Since the start of the C Wave, the interaction of SLV and the 20DMA is pretty amazing, the only violations were the midpoint and the parabola breaking down. This might just be a picture-perfect T1 move after all. I did not have a fun night last night, and had my sell order ready this morning, but the market can do crazy things in bear mode.

    http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=0&mn=10&dy=0&id=p09306729927

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  56. The SPY trade is purely a cycle bottom/sentiment trade.

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  57. Sold all PM's, small loss as I added GLD yesterday.(Late to the party,lol)

    SB: You smiling???

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  58. very strange and confusing market when both $ and gold make RT cycles. Keep positions small unless you have inside information.
    Waiting for june 13th Armstrong bottom on gold

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  59. PM stocks are really holding up well despite markets being down. Down less than gold %.

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  60. Correction.. I meant EUO, not EUP.

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  61. on the other hand i still think my small positions on GLD long and SLV short may make some chump change.

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  62. For anyone looking for the pure play on SPY by waiting for a swing low reversal, the trade hasn't yet triggered. No swing low yet.

    f

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  63. Yes this is a very confusing market. And one I no longer wish to play from the long side.

    I'll let others take the metals higher if this reverses. Now I'm just going to wait for the intermediate low.

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  64. Actually it did swing but it was last week and it was a fakeout :)

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  65. GOLD GLD Daily Chart:

    http://screencast.com/t/HcABlaAlOMb

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  66. I never entered into the spy trade. Too many Mays' and summers have not been good for stocks.

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  67. It`s like trying to follow an organ monkey playing a shell game. Stopped out on sso. Gary, are you staying long on SPY or bailing on everything?

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  68. Good thing I decided to check in as I warmed up he baby's bottle this am.

    So, what's the consensus on SPY? Keep or dump? It's done a whole lot of nothing since we bought.

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  69. Still long silver options. This market isnt for the weak. I like it like that :)

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  70. Out today -

    FWIW

    Bought NAK and XTXI

    Holding metals positions , with stops while I'm away (not too tight, got in last week on many, EXample bought AG @ $17)

    Good day all

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  71. Gary,
    looking at the spy daily, is this a coil that has formed over the last 4 days? Thanks.

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  72. Gary,

    Did not see a "NEW POST" this morning for your portfolio change. Did I miss the it?

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  73. GOLD down $7

    Hui down only $2 ,
    GDX down 1/2 %

    Also FWIW, watching energy stocks , looking pretty good-

    'SD' = 10 million in vol first hour

    See also charts of XTXI, SD, HERO, KEG, COG,

    Good day

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  74. I try to remember to add the new post every time but sometimes I forget. You need to get tweety mail so you get an email any time I post to the website.

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  75. Whoaaa, went to sleep smiling on profits coming.... woke up this morning and had to wipe the sleep out of my eyes. Quickly cancelled all stop loss and contingent orders and just sold all GLD, GCX, GDXJ at the market. When Gary says get out, I am out! SLV Puts are kicking in gear now. Wheww, going for coffee now. :)

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  76. oh, and when I said "out today", not out of the mkts,

    I am out with my family, so wont be posting anymore. Using laptop here, but now I am "gone for the day'

    Good day all

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  77. When the mkt doesn't do what it is supposed to the game becomes defense instead of offense, IMO. Gold reversing overnight was one thing, then the dollar is down sharply and the PM's don't care, then GLD broke below 148 which it shouldn't have if there were buyers left. Sold all PM stuff, but am holding SPY and QQQ, AND I will get a buy today if Dow is down like it is now. I will post late in the day.

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  78. look at last 10 years chart, i just dont see miners have much risk from here..

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  79. Euro getting whacked again, giving back all its gains. This is getting super interesting/exciting!

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  80. Gold seems unlinked form the dollar the past few days

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  81. Also, bonds rallying, and gold holding... Gold should reverse overnight/ into tomorrow if this holds.

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  82. Whoever had posted about the ZSL holdings with a huge down portfolio, you might want to think about selling today..

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  83. good luck to you guys,

    gold appreciating with a dollar sell, but it's not as naughty as it's silver sibling. that bastard.

    haha

    silver hit the weekly trend line a few weeks ago and sold off hard. i always hear about this broken parabola, it was just overbought trying to maintain ground.

    personally i think we're still on track. 1520 to lull around, gold still trading over 1515. keep your stops in because we're late in the game it can be volatile.

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  84. Getting out as well. Out of miners and taking a small loss from the GLD purchase yesterday.

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  85. The only thing that worries me about long stocks is that the Treasuries keep rallying, days in, days out...
    I really don't know why people think that the 30Y bonds in the US is a buy, unless something ugly is in the pipeline....

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  86. Subjective, but typical GS-type commodity pump and dump event IMHO - weaker hands scramble in and quacking ducks get fed and then stronger hands get set over course next few days for real move up.

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  87. Michael,
    There are not too many Cramer-esque figures pumping PMs but I hear what you're saying.

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  88. so far NSQ and FTSE holding pretty well considering the mood :-)
    BTW, what does IMO mean?

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  89. hamvestor - 1515 is a critical no to keep in mind for support. opt exp week and bounce out comes soon after.

    personally i think gold got 2 weeks left to appreciate.

    silver appreciated like crazy this past wee. i wouldn't be a buyer of silver at this point. maybe at 32

    a person position depends entirely on their entry. if someone bought last week when gold was 1471 then you have more margin . if you bought higher you'd have less margin. everyones different.

    timing is critical at this late junction.

    gl everyone

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  90. Re: comments yesterday about hope.

    Went to refill the coffee. Came back, the level II data was filling my screen with GLD asks in the 160 area. I almost did backflips.

    Then I realized that I had scrolled down to the bottom before I went to get coffee. D'OH!#@

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  91. Maybe the reason gold didn't get a big boost was because nobody believed in the Euro rally. The "news" that caused it was pretty vacuous and the action reversed quickly. I don't know how much you can read into the dollar action when the news cycles last about 20 minutes.

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  92. Edwin, I got it it now. Thanks.

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  93. Ok I give up. I am selling my GLD positions and GDX. I'm signing off to go get a haircut......another one.

    Looking forward to the A wave

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  94. This action in the markets has reminded me often of a quote from a favourite movie, a sort of "nothing time". If I may:
    "I've always found this a trying time of the year.
    The leaves not yet out, mud everywhere you go.
    Frosty mornings gone.
    Sunny mornings not yet come.
    Give me blizzards and frozen pipes, but not this nothing time.
    Not this waiting room of the world".

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  95. sophia - though you may not believe fundamentally why this happening.

    it's happening. 30yr long bonds are being bought b/c a dollar rally is a comin.

    i've been a buyer of bonds since feb 14th this year happy valentines day hon, here's a basket full of monopoly money. hope this trade pays off.

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  96. My view on gold.

    C:\Users\Bob\Desktop\gld_2011-05-26_0815.png

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  97. BLH:

    How'd you manage to put a chart on my C Drive? ;)

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  98. Sorry everyone, try this.

    http://arum-geld-gold.blogspot.com/2011/05/gld-is-still-ok.html

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  99. BLH, my thoughts as well. Nice chart. Now off to find an ugly version to fight my confirmation bias.

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  100. gdx has formed a swing. Much more decline and this is going to turn into a bear flag.

    This has just become too tough to call. Safer to just let the intermediate correction runs it's course and buy that bottom.

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  101. Gary,
    I agree with you 90%.
    I wish it would melt down and regroup.

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  102. Bought some LVS calls, SLW puts and CHK shares yesterday.
    Sold the first two with a small profit and down 80$ on CHK. They were all intended to be short term trades.

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  103. Glad you said sell and take profits Gary. Better than waiting for triggers to hit and lose all profits. Can enjoy a nice holiday weekend, with no worries. :)

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  104. Sold GDX - GDXJ - SPY - keeping ANV

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  105. this has turned into a day trade market unless of course you are in at cycle lows I don't want to get ground up in this chop. I especially don't want to be long going into the holiday weekend. I am flat.

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  106. Look at the SLV july 25 puts. Over 100,000 volume.

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  107. bamster,
    I see open interest at 123000+ but volume today is 2586.

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  108. Bamster,

    There is history behind those July 25 puts:

    http://www.zerohedge.com/article/easy-come-easy-go-slv-put-buyers-story-comes-close-wash

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  109. slw goes to 40 or 28 ?? (10wma, 50 wma)

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  110. This comment has been removed by the author.

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  111. Ok.. now I see it, 102779 contracts...

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  112. I notice that the SLV dropped just low enough to close the gap from yesterday's open, then immediately reversed. Could be a short lived reversal of course.

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  113. I still think Gary's original read is right. GLD is forming a small handle & should break out to new high next week. That's a possible 10% move on DGP. Too much potential profit for me not to take the risk.

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  114. " Quy said...
    I still think Gary's original read is right. GLD is forming a small handle & should break out to new high next week. That's a possible 10% move on DGP. Too much potential profit for me not to take the risk."

    I concur with you.

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  115. Bought heavy in gdxj this morning, sold my slv though...just sick and tired of the swings and overall the trend is down into the summer so not comfortable holdings longs with all this all volatility and the primary trend being negative. Having said that, will look to short silver aggressively if it heads higher into 40s.

    With my gdxj addition, am overall more long than yesterday.

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  116. I'll let you guys make the money. This has become too volatile for me to play with any longer.

    The only trade I'm comfortable with is the SPY or QQQ based on an impending cycle low.

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  117. Gary said this bull will be hard to ride, but there is nothing mysterious about gold this week.

    OPEX was yesterday, tomorrow is stand for delivery day. There are more sellers in the market these three days than buyers. Short sellers are pushing for weakness. Look how easily they pushed people out this morning.

    Now, strong hands with no leverage are standing as of 10:30 am tomorrow, for the next month. Friday is usually a green day for gold. 147 is extremely strong support. 148.14 for me.

    Stay in the trade until that gets violated, and slide your stops up as the market gives you more profits.

    For you option people, use ratio trades and forget about sell stops. focus on profit stops instead. The churn is eating you guys up emotionally.

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  118. Don't forget that Monday the US market is closed.

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  119. This comment has been removed by the author.

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  120. Lot of volume in GLD in the last couple of minutes.

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  121. Should add, besides PMs, added HPQ couple days ago and some other stocks that look like they have some short/medium term potential.

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  122. I agree with Gary. There is simply no need to play every day. I am about 30% long SPY and such, and 0% long PM's. Trading is like a baseball game where you can take an infinite number of called strikes. I am not swinging until I see a fat pitch. I will add to my mkt ETF's if it looks right.

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  123. Gary,

    Did the S&P just print an official swing high?

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  124. DG,
    Thanks for the update and posting the sell this morning. I added more SPY yesterday so about 30% as well. Still underwater though. Any sell targets? Will probably follow your lead or Garys.

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  125. Ryan: I rarely use targets. I watch the mkt in real time and when it does something bearish I get out. I also sometimes sell in pieces on the way up. I watch sentiment, volume, oscillators, overbought, divergences, put-call ratios, etc.

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  126. Edwin, if I was you, I would " mind the gap" as they say in London tube

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  127. Swing low by .02 for you HR

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  128. I'm back, Looks pretty good no?
    Hot rod you mean Swing low right?

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  129. Yes, I meant low of course..... Sorry guys.

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  130. Gary: You thinking to add anything now that the swing low is established? (and does besting yesterday's high by 2¢ do it? Not very impressive.)

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  131. DG,
    Thanks, will watch for your updates.

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  132. 30% long SnP. Following Gary on this one.

    100% long my pm positions; just can't bring myself to trade these. Been in pm's since July '02and have made money every year except '04 and '08. Those two down years were only negative 5% each which I can live with. I think we are in a secular bull market in the pm's and to me the correct behavior for an investor in a secular bull is buy and hold. I have new cash coming in to add, and Gary works great for me on the entry timing. I'm a terrible trader anyway. Mea culpa...

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  133. Edwin,

    NEW YORK (Dow Jones)--Treasurys have little room to rally further once the Federal Reserve's bond purchases end next month, unless U.S. economic growth screeches to a halt, high-profile bond fund manager Jeffrey Gundlach said Thursday.

    Over the past two months, government bond market participants have fiercely debated whether the end of the Fed's $600 billion in Treasury bond purchases in June will trigger a market sell-off or rally.

    Gundlach, founder and chief executive of DoubleLine Capital LP, a Los Angeles-based fixed-income investment management firm with about $12 billion under management, said the U.S. government bonds' rally in recent weeks shows investors have already bet the Fed's exit from the market will boost safe-harbor Treasurys because the economy will slow. So any gains will be limited.

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  134. Well guys, I can't decide what's going on. Good news however, I just went into the kitchen and shredded some Piave a friend brought back from Italy and sliced up some anchovies for my ceasar salad. I'm about to go long on some Delicious.

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  135. It looks like the S&P did finally form the swing...just barely.

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  136. DG,
    I might add some QQQ to the model portfolio. I'll see how we close before I decide.

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  137. Gary,
    A short while back you wee also gauging S&P with AAPL. Any thoughts on that at this time?

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  138. Mighty, yes. A very special movie

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  139. sorry Gary to ask, but why would you buy NSQ at 2328 when it was trading 2282 2 days ago and you had already the right view that we were going to have a swing low anyday?

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  140. Can someone please comment on the fact that gold just bounced off the same trendline it has been since January?

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  141. Gold has not broken down from its trendline beginning January 28th low of 1309, it pushed down through it on May 17th but recovered and closed above it, bounced off it the following three days and continued higher. Now 1500 would be that trendline's support and above 1610 would be the parallel trendline resistance.

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