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Wednesday, October 5, 2011

POSSIBLE PORTFOLIO CHANGE

A possible portfolio change has been posted to the website.

114 comments:

  1. Anyone considering taking a bite o' AAPL? If this market rally is real it'll resume it's leadership role quickly.

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  2. I sold the rest (80%) of my UUP this morning and now have QQQ and GDX among some other miners in my core position. I think the dollar may hold steady but it looks ripe to fall around the employment report and that should give a boost to gold and miners. However, I still think there will be another downdraft after the dollar makes it's way into it's low and so I expect to get back into UUP in a week or ten days in preparation for more carnage going into late Nov. Just a working theory at this point.

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  3. i sure would like to see a gap down tomorrow to complete my spy long position.

    but so would everyone, it seems.

    the 30 year starting to crack a bit. i'm finding this to be a better metric than /dx lately.

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  4. How do you get Fib on Stockcharts, is it only with paid service?

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  5. The cycle timing bands in equities are vague and present numerous valid interpretations. These interpretations afford less confidence in any one single interpretation, as having numerous options statically lowers overall probabilities. We're also far from any weekly swing confirmation.

    As the odds are very high that the top of this 4 year equity cycle was printed in May, these remaining IT cycles down to the 4 year low in 2012 are all biased to the downside and considering the macro environment we're in all likely to be LT or ELT.

    This confirms the primary trend that investors should respect here is the trend down, that is now the dominant trend. In this type of environment, we want to be selling rallies and not buying dips, IMO.

    Counter trend trades amount to day trading, especially when the cycle interpretation is vague. With a "secular" bear market in place, a recession on hand and a return of a "cyclical" bear market, energy might be better served focusing on short side opportunities, instead of counter trend scalps.

    It all depends on your tolerance and the type of trading one wants to undertake, understanding the trade is the first step. Good luck all.

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  6. Poly,
    If you find it easy to make money on the short side more power to you. I have always found it easier to make money playing the intermediate bounces (bear market rallies) than trying to short.

    The tops are always so hard to time and the bear market rallies so violent that I've rarely made any money on the short side in a bear market.

    Markets go down differently than they go up. Selling rallies is easy to say but hard to do in real time. Not nearly as easy as buying dips in bull markets.

    The cold hard truth is that it's pretty damn hard to make money in bear markets.

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  7. No argument there Gary and please do take it as a critic of the trade, I'm just saying there maybe be a better way by focusing selling the rally, considering the environment.

    What I like about taking a short position in a bear market is the possibility of scoring big. If you could sell a big rally deep enough in the IT timing cycle, you could ride that down 20% plus to a ICL.

    On the flip side, why not take your long now to avoid losing valuable ground by 4pm if it rally's hard? just a suggestion. the higher it goes the wider the stop too.

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  8. Poly
    You took a small % trade in NUGT yesterday, does that have the same time decay as AGQ does?

    Is that a long term hold for you?(NUGT)

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  9. Because I think we've put in an ICL. Those usually last at least 5-8 weeks.

    I shouldn't need to sell after only one day. Plus the half cycle low isn't due until roughly day 20.

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  10. If the bottom is in for stocks, should we be seeing selling on strength numbers?

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  11. we also have yet to test the underside of the 200 day. happened both times in 2000 and 2008 and i think the odds good it does again.

    only question is where to put one's stop. 1068 seems very, very reasonable given yesterday afternoon.

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  12. It's not much and let's wait and see if it holds into the close.

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  13. The US dx just dropped thru 79, corresponding with the current acceleration of this bear rally.

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  14. I nibbled here 10% long term holds GDXJ

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  15. Shalom
    Doc posted a crb chart last night pointing to the fact that we are near the 07 lows. Even if we are choppy I have to believe we near the low somewhat.

    Unless we have an event like we had in 08 I should be able to hold on to this.

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  16. I didn't see that chart, but have been eyeing the CRB myself lately. Why was he comparing it to the '07 lows vs. the '08? Just curious.

    For long term holds, which is what I'm trying to do with my miners, I think buys this month will be excellent. Stay prepared for some volatility (reduced sizes), so we can hang on!

    I believe miners will be a much better place to sit than confetti, with little doubt.

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  17. I've been tested to the downside, but the hardest thing to do will be stay long after we have sizable profits but feel they're due for a pullback.

    That is where the big money is made over time, although it did cost me June-Sept profits and then some.

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  18. This comment has been removed by the author.

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  19. LOL@HAggarty...I think you just gave it all away.

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  20. well, just the chart....yea I guess your right, I won't do that again...I guess I felt comfortable because most people here subscribe to both fellas.

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  21. Haggerty,

    I'm just busting your balls, friend. :)

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  22. Haggerty,

    Thanks, I also don't use fibs as a line in the sand but more of a general area.

    I've been looking at the 50% area on CRB, silver, and copper of late.

    I don't think Doc would mind too much, you might have just gotten him another sub. :)

    From what I know of Doc around here he also does solid analysis. To date, Gary is still the only guy I've ever paid for anything in this business besides brokers, but Doc seems worth it as well.

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  23. Shalom Bernanke

    Give Doc a try. I think he offers a one month trial for a fair price, if I remember correctly.

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  24. RobL,

    I really try to avoid information overload, but I'll take your suggestion as Doc takes time to come here and share observations with slightly different perspective. I've watched him enough to know he's real.

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  25. DOC's well worth it. Been with Gary for 3 or 4 years, and DOC for a full year. Only 2 subs I have, other than charts, etc. and I'll be with both till they pull the plug.

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  26. This comment has been removed by the author.

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  27. This comment has been removed by the author.

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  28. Dumped my 1500 ZSL (double short silver) 'hedge' at $16 for a 29% profit. Bought at 12.44. Will wait for a potential pop in silver over the next 5 to 10 trading sessions, then consider buying back the 1500 ZSL if I feel there will be another leg down. Still holding 200 AGQ I bought for 237.10 so that ain't too cool. At least they aren't options so I can wait it out.

    Also bought back 2 OCT 240 covered calls I sold on the AGQ shares (right before the dive began) for a 99% profit of around 2 grand. I could have let them expire but 40 bucks was worth having a cleaner account summary screen. lol

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  29. Poly:

    Good thoughts, I agree. What's your take on timing and sizing in miners vs. metals? Miners were entirely unable to resist the recent slump in the market, and seem vulnerable to continue their streak of underperforming as the bear market decline continues.

    The fact that gold didn't correct more sharply is making it difficult to jump in to a big position. Hopefully we see another failed daily cycle, but hoping never ends well.

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  30. Mr M,
    Just getting caught up, don`t know if somebody answered this already. Right at the bottom of your stockcharts chart is a tab that says annotate. Click on that, it will bring up another page and across the top of that page are all the goodies. Thanks for all you contribute.

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  31. 86d4life,
    Well. whadder ya know.. Thanks!

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  32. to all Interactive Brokers users, do you know if there is a symbol for spot gold & silver? similar to $GOLD in stockcharts?

    thanks

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  33. Wow! Steve Jobs has passed away. Very sad day.

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  34. i believe these comments from Dan Norcici have hit the nail on the head about these markets lately-Its not about TA or cycles



    It seems everytime we get the least whiff of more bailout or rescue talk coming out of Europe, up go the Equity markets, most of the commodity markets and of course, gold. That happens mainly because down goes the Dollar and up goes the Euro. Quite frankly there is nothing more disgusting to a trader than sitting around waiting for some fresh fundamental news to come out of some monetary official's mouth because you never know what the hell words of "wisdom" that they are going to come up with next, which words I might add will either immediately sink your trading account into the netherworld if you guessed incorrectly or make you look like a veritable wizard.

    If it is the latter you can wait by your phone for a call from Jack Schwager to include you in his next sequel to Market Wizards where you can pontificate about your expertise and what you look for in a market when the truth is you just happen to be one lucky SOB.


    On the other hand, if you guessed it wrong, they have another category of book that they can include your name in. It is called, Famous Trading Recipes, under the heading of Road Pizza, because that is what you will look like if you were on the wrong side and could not run quickly enough to prevent yourself from becoming steamrolled by eighteen gazillion hedge fund managers whose computers all hit the market at the same moment in time.


    Seriously, we are back to trading whatever the hell is coming out of Europe next. Who knows what the final package, if any, will look like. All I do know is that once again, just about the time every technical indicator on the planet turned to the sell side in the S&P 500, with headlines flashing the official entry into a Bear Market, up goes the S&P as if nothing happened once again punishing all the short sellers for their impertence in daring to sell stocks in the financial markets of the US. Tsk, Tsk, boys - did you not know that such activity is unpatriotic at best and treasonous at worst?


    Truth be told the monetary authorities of both Europe and the US are terrified of the price charts and probably watch them more closely than we traders. They simply cannot have them casting off belittling signals as to the health of the economy.

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  35. Robert,
    If that isn`t the truth of it there. It`s the faster rat syndrome. I really wonder what it`s going to look like when the music stops. What, the whole planet, minus the central bankers gets burned. Good luck to us all.

    I did hear a rumor that Eamonn is working on a dessert island deal and maybe some of us SMTers can go hang out with him until everything blows over :)

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  36. Thinking on Gary's climbing, and all of the fascinating side interests and conversations I've enjoyed on this forum, two events from Jobs' obits stood out for me: That he dropped out of school, returning only to audit a CALLIGRAPHY class, and that he quit his first corporate job at Atari to go rucksacking through India.

    Cheers to the independent thinkers of SMT!

    GoodSpeed to Wherever comes now for you, Mr. Apple!

    To Eamonn's island, we?

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  37. If cycles aren't working then how come we got the daily cycle low on day 39? Right in the middle of the timing band for a bottom.

    And we initiated our positions the very next day. Sounds like cycles are working pretty good to me.

    There's been multiple hints of a bailout. The one that stuck was the one that occurred in the timing band for a cycle low.

    Someone is just making excuses for why they can't trade this market successfully. The real excuse is that this has just been a very tough market.

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  38. STEVE JOBS-

    apple computer .......has died,

    Sad.


    Markets may react tomorrow if appl collapses

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  39. CME margin for 1 silver contract: $24,975
    CME margin for 1 gold contract $11,475
    CME margin for 1 basket of insolvent too big to fail banks: $ 3,500

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  40. You left out the best part

    Facilitating manipulation for cartel traders: PRICELESS

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  41. Apple weighs about 12% of the Nasdaq. Hopefully the news won't do much damage...

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  42. AAPL is #1 on selling on strength on Wednesday… Seems like some people knew that the bad news was coming and sold the shares early?

    http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow-20111005.html?mod=mdc_pastcalendar

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  43. Gold has now backtested the c-wave upper trendline twice and failed to break above it, on 9/27 and 10/4...also crawling the 150sma.

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  44. I don't think SOS on aapl was because someone knew. Big disappointment no iPhone 5. Just an iPhone 4 with a glorified camera.

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  45. Stoker, I don't believe $GOLD is spot price but a continuous contract of the latest expiry in GC. Just follow the Dec contract and it should be the same as $GOLD.

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  46. Actually gold hasn't really even gotten close to breaking the C-wave trend line.

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  47. Interesting interview with DeMark on Bloomberg. He is suggesting Gold bottomed at his target of $1603 and will head back up to test $2000.

    Also interesting that he used the 1973/74 stockmarket crash as a roadmap for the 2007/08 crash in SnP with some success. We are following a similar path now (as a few of us here have noted) and he expects a 14% rally from the current bottom either tuesday or a possible retest in a few days.

    Interview
    .

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  48. Gary,

    You have the lower trendline drawn, I mentioned the upper trendline that is basically parallel to that lower trendline and is drawn from the highs of the last A-wave, along 12/03/09 and 5/2/11 highs, the channel which gold broke out of on 8/2/11 and went parabolic. Gold broke back into that channel and has now backtested that upper trendline twice and failed to break back out of the channel.

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  49. 70% of all bear market rallies run from 3-6 weeks. The average gain is about 14-15% just like he suggests although we have seen bear market rallies last up to 10 weeks and gain 30%.

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  50. If I had to guess I would say this one may be a little larger than normal and briefly make it back to the 200 DMA, certainly to the 75 week moving average.

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  51. If this is what you are talking about it seems like kind of a meaningless line.

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  52. WW

    Are you talking about pinky on this chart running from March 2008 top through May 2011 top...

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  53. CME raises copper margins 15%. No change to PM margins

    http://www.kitco.com/reports/KitcoNews20111005DeC_breaking.html

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  54. Gary,

    It looks meaningless when you use a chart of GLD, use /GC and you'll see what I mean.

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  55. Don't you guy's ever sleep ;-)

    I've been up through two markets now and am ready for a nana nap here......

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  56. Silver,

    On my chart 9/27 and 10/4 are actually tagging the trendline, your trendline is lower for some reason, did you draw it across the highs of 12/03/09 and 5/2/11 highs?

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  57. Yesterdays late day pop

    Say what you want about the Bernank, but he ain’t stupid. He knows, at 3:10 pm, after the bond market closed, he only had to deploy $4.5B within five minutes to get a 100 $COMP point (or 40 $SPX points) swing. Once VWAP was taken, 1099 was going to be taken. If you kept shorting the tape at that point, I’m glad to have you on the other side of my trade. VWAP -> 1099 -> 1114 -> 1120 with extreme bearish sentiment, simple as that.

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  58. WW

    No mate, I just drew it as shown here to intercept the tops you were talking about. I can see where you drew yours though. I have a slightly different trend channel to yours.

    When are you going to learn to post charts :-)

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  59. Silver,

    Yeah I have to get around to posting charts don't I...lol
    I have to install something, maybe tomorrow, time for bed my eyeballs are going to leak out of my head :)

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  60. If the NFP print on Friday is sub 0, especially given that it would already include 45,000 Verizon workers coming off strike, then there's a chance the recent pivot could fail and still keeps the band timing intact. ADP had a massive miss last month too.

    Worst case in that scenario is price down to an almost pivot fail, only to trap you over the weekend for some of that infamous Sunday smackdown and a nice big gap below the obvious stop for Monday.

    And not that history repeats itself, but in terms of rhyming... the SPX went from a high of 1153 on 10/3/08 to a low of 840 on 10/10 - followed by a 200 point 2 day rally to 1044, and not to exceed that high again till 9/11/09.

    Just call me a nervous nellie.

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  61. Robert,
    Dan Norcici and his master Jim Sinclair are a couple of low life slime balls. They are always full of excuses when things don't go their way. Take anything they said with a grain of salt.

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  62. Silver's MACD indicator is curling up and the MACD-Histogram is threatening to flip into positive territory. That's why I dumped my silver short. Silver could get a nice little pop. But when/if the Histogram does rise over the zero line I will consider shorting silver again. Not sure yet.

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  63. SFGF said "Say what you want about the Bernank, but he ain’t stupid"
    I am getting the same impression with the man. August change interest rates to at least 0% for 2 years, get the public to rebalance the 2 year to zero so he can sell the short-term notes in order to in Sept buy long-term notes......now I fully expect the full plan to come to order in short order...

    Which is to say deflation is here, and with these keep rates and a surging dollar start the printing presses again. The main objective is for the FED to own all the GOV notes, since this is the real issue...probably the last step is for the US to default on the FED, actually the FED will forgive the US debt; chopping it in half. Multi decade plan perhaps...also expect the next round of QE to be much more clever in the sense that it will be continuous, and will somehow relate to the growth in deficit spending...

    All this does is buy time and even not that, but zero problems have been solved.

    SB, you should be happy to know that I have been nibbling away for the turkey play(modfied turkey-I will still sell at parabolic moves)...:) I think your conviction will reward you well.

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  64. WW,
    I get the same chart when I use GC. ONe of the problems I have with charts is that you can adjust the axis and get a chart to say pretty much anything you want it to say.

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  65. andy,
    If the market wants to go higher then it will find a reason to do so no matter what the job number is. If it's negative the market will just assume QE3 is coming sooner than later.

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  66. Good morning all.

    Glad to hear you're getting on board, Keys. I've been waiting for Gary to give the green light on GDX before I added again, so when he mentioned mid-day yesterday his plan, I bought half of what I was planning to add immediately, and the other half at the close. Still, I only dialed up my total risk to portfolios by half a %, bringing it to 8% total and looking to add another 2% TR the remainder of Oct.

    I will also trim some, but not all, into parabolas or very overbought conditions. It keeps me focused on what I should be doing rather than what I want to do. :)

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  67. "If the market wants to go higher then it will find a reason to do so"

    it took me a few years to catch onto this but it's the absolute truth. extra fun because it's so counter-intuitive.

    still holding my meager SPY position, hopefully today sort of chops around and perhaps gaps down friday on whatever jobs report is coming out. expect to be fully loaded by that point.

    conservative target is the 233 DAY sma on /es, currently at 1267. the 200 day is 1275. shrug.

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  68. For example, I sold 70% of my PHYS position around a month ago, keeping the other 30% for the long haul.

    With miners, I won't likely trim as much as long as we're past the Oct/Nov period, maybe 30-40% but even then only into a very overbought situation. I will not sell any to avoid what I feel might only be a few days pullback, but will instead look to add into an anticipated pullback when we get there. Point is, I need to keep most of my holdings for the rest of the secular bull.

    I'll add that if Gary is sure we're not yet to a D-wave I'll be inclined to trim more than usual into the runups b/c this sure felt like a D-wave to me! lol

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  69. 1 hour /es & /gc with effective volume subgraph

    http://i56.tinypic.com/20k65tv.png

    gold is not looking good at all. excellent recovery by /es after a scary friday/monday. volume wise price should be around 1160 here.

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  70. Gold and silver are both coiling for what is likely to be a very explosive move.

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  71. I'm also going to add back my PHYS when Gary eventually believes a D-wave has run it's course. that was one easy and comfortable trade from beginning to end. Never gave me anything to worry about, and shouldn't be at all difficult to hold the remainder of the bull mkt.

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  72. This morning my upro feels like it`s getting the shanks........

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  73. Looks like market changed its mind. Doesn't want to go up anymore.

    Le Fou

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  74. Gary said
    "Gold and silver are both coiling for what is likely to be a very explosive move."

    the question is which way :-D...

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  75. Le Fou,

    we're 4 minutes into the day, no??????

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  76. JG,

    with such extreme negative sentiment readings I think the direction will be up. :)

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  77. The CEO at EXK has been buying a decent amount of shares over the last week or so:

    http://canadianinsider.com/coReport/allTransactions.php?ticker=edr

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  78. gdxj may come back to test 5 dma..

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  79. Rob L,

    Just poking a little fun at all the talk of the market having a mind of its own. ;-)


    After all, I am . . .
    Le Fou

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  80. Le Fou,

    of course. Still early on the west coast. :)

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  81. Speaking of coils...arent the initial moves out of a coil usually false, and reverse in a couple of days Gary?

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  82. 70% of the time that's true, but I doubt that will be the case if the initial move is up. The COT is to bullish and sentiment is too bearish for an upward break to reverse.

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  83. got short gold here (1645) until i see a lower low.

    normally i don't like to hedge but there does seem to be an advantage to being long stocks and short gold here since one looks great and one looks horrendous despite the same dollar correlation.

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  84. This comment has been removed by the author.

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  85. I wonder if more and more of activities similar to "Occupy Wall Street" will occur, as economic conditions deteriorate. Perhaps talk of riots and looting are not far fetched either.

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  86. Gary,

    If the C-Wave is still on like it seems. What will happen to the dollar? Will it just head into an intermediate correction? or will it extend and have a final 3 year low next spring finally breaking the previous 3 year low?

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  87. If the dollar rolls over here and breaks the May low then we will have a failed three year cycle in progress.

    That would be very bad.

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  88. Andy - nervous here too about the job report. Gary seems calm, so perhaps I should just log off the broker website.

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  89. What makes you think that possible ? Is it because sentiment is so damn high on the dollar?

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  90. WW

    What's your read on gold and the coiling action? The 10-day SMA has dropped under gold, as you've observed in the past, and may provide the test of support that gold needs to start it's uptrend?

    Thanks!

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  91. Hey Gary, May low is a long way away... this would be very GOOD for gold correct? Are you just implying that it would be bad for the dollar to be so weak without even instituting QE?

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  92. If the three year cycle were to roll over now it would signal a failed cycle. A failed cycle this early would probably mean severe inflation is headed our way.

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  93. I'm curious how high you guys are expecting this first rally to take us, and if you believe PMs will not see their lows again this year. Personally, I am dubious about silver's near term fate. But time will tell.

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  94. No idea but silver is setting up for an explosive move any day now.

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  95. Ver,

    I dont see a coil in gold, in silver yes. Gold is crawling the 150sma. As you mention.. I was waiting for the 10sma to act as support, but it is to early to tell whether or not it will hold, I have seen the 10 break many times and I believe it may not hold now. I think when people start chasing the market money may get sucked out of gold. I have no desire to go long gold yet, have to see how things playout.

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  96. I thought silver might wait till tomorrow but it looks like it's breaking out of the coil now. If so hang on tight. We could see 10-20% in a matter of days.

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  97. I mentioned last week that silver will bounce before gold, it is stretched too far beneath the 150sma.

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  98. I agree silver is setting up for an explosive move. But I would not be surprised if the move is all over within a week after the explosion.

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  99. Danno,

    I agree, but I can see that happening only if gold breaks down. If gold bounces around for a bit silver will push back up to the 150sma.

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  100. Pretty unlikely with the COT and sentiment where their at.

    Folks when you get all the odds in your favor you just have to take the trade.

    It's been a long time since the PM have been set up like this.

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  101. Danno,

    I am al for calling slime balls, slime balls, buy to refer to Jim Sinclair and Trader Dan as such, has me wondering if you have ever read their work. Jim Sinclair has never recommended anyone but professionals trade gold. He advocates buying and holding physical only. Therefore there is " no trade" that could go against him. Trader Dan provides commentary on mostly on PM's, pm stocks and commodities. I have never read once any position he has taken. I have never read once where advocated anyone take any position on anything. I am quite confident in saying Jim Sinclair knows more about the inner workings on the Crimex and LBMA than you. Using their commentary as trading advice is your mistake.

    Lastly you can ignore Gary's on the latest position, however, you must realize why this blog is called the Smart Money Tracker. You and I and everyone else on this blog are not the Smart money in the Pm market. If the smart money is telling us something, best to listen.

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