Wednesday, 31 August 2011

It's all about being brave

The American market has risen to recover half of the fall that occurred between 7 July and 9 August. Is this a break out or is it the end of a retracement? I had the courage to buy just a few more bombed out shares in the US (MOTR, TSPT, HMPR). I will be quick to dump them if the market resumes its downward path and I'm holding tight to my shorts despite hefty losses so far. Hedging my bets
I lost most of my morning while I had a new carpet fitted in my study. Result no internet so I was too late to pick up shares in the second day of bounce in the FTSE. Maybe that's a blessing in disguise, tomorrow could see the end of this rally.

Tuesday, 30 August 2011

Phew! There's a stroke of luck.

I was out for most of today. But before I went I bought some more gold and held on to my silver. Came home to a tidy profit. The chart shows the support line that I used to justify buying the gold. Sliver is looking a bit less positive, but I have a nice profit there too (see chart from a couple of days ago.)
The Dow is more of a worry. It has poked its nose above the resistance line I drew, but not enough to be a convincing break out. The bulls are pushing but the bears are still out there. Volume has declined.  The picture drawn by the S&P is slightly more bullish, but nothing to write home about.
Most of my UK bottom fishing stocks (bought at the bottom of the fall continue to do well (KFX, WLF, NWR, ISAT).
The balance of my portfolio is: Gold and Silver 19%, Equities 17%, Short Index ETFs 9%, Cash 56%.

Monday, 29 August 2011

Funny old day

UK market closed. Dax dragged up by US strength (196 points as I write). Still comfortably within the trading range established since the market stopped its fall. (See chart). Gold and silver both started well but the glitter has faded as the day has gone on so my gamble has not paid off so far. Losses on my index shorts have been compensated by my stock picks. In particular GTIV on the Nasdaq has shot up 24% (after costs) since I bought it on August 12. KFX in London has also managed 17%. Let's see what tomorrow brings.

Took advantage of the Bank Holiday to watch an amazing film with Robert Duvall, Bill Murray and Sissy Spacek called Get Low. Very unusual and moving examination of guilt.

Friday, 26 August 2011

Where angels fear to tread

I have bought some gold and some more silver despite my worries yesterday. I may regret this reckless move. But the silver chart looks promising (It is moving upward in clear steps - see chart) and gold has bounced off a support line.
Dramatic daily stock market movements are inflicting vicious whipsaws and perhaps I should not be there at all.
I am flush with cash that I have been holding for a couple of months. I sold off most of my shares when the market flattened and looked as though it would fall. (Tiny pat on the back.) All that cash is now burning a hole in my pocket and I want it to generate some profit. Should I be more patient in these uncertain times and return to holding close to 100% cash?

The importance of 11000 for the Dow Jones Index

Look at the chart and you can see that the 11000 area has held up the movement in the DOW on two occasions in the past 18 months. Current price action, for all its volatility represents the third time this has happened. The only thing to do now is to watch carefully for the moment that the pause is over. The sharp rise in the volume of trades suggests that when that happens many traders will be smiling while others will be crying.

Thursday, 25 August 2011

Bulls and Bears fighting to the death

We are in an ugly place.
The market has fallen sharply and is now consolidating. It is trading in a range with violent movements both up and down. The price action does not give the smallest hint of how it will turn out. Very, very hard to make money here. I have bet each way: small positions in short index ETFs and small positions in stocks poised to move higher if the market recovers.
Precious metals are in retreat but could easily resume their upward path. So no easy money here either. I have kept a little silver but have taken profits on the rest and on all of my gold. I have thrown in the towel on palladium.
Bonds are doing well but could also reverse. I maintain a small short ETF position.
Only solution is to bunker down and wait for some clear signals.