Wednesday, 25 April 2012


I have not been updating because there is so little to say. Here we are waiting, waiting, waiting. And it's a painful wait. It's so hard to get the timing right. When the market shoots off in an upward direction it takes massive courage to hold onto shorts which are losing money, particularly when my capital base is so small. Result is that I cut my losses and then I'm not there when the market moves off in the direction I expect. Fear of the bear trap is ever present. The best I can do is to control the money I put at risk so that if I do get it wrong my loss will be manageable. I then hold on tight and go with the ride as long as I can bear the pain. The notes on the chart show why I am holding on.

Wednesday, 18 April 2012

Those damned bulls

I am feeling the jaws of the bear traps gripping my ankles. Who'd have thought it: straight through the 13000 level and sticking there all day long. No volume spike but we are back to those days of huge daily price movements. I have yet to throw in the towel. If it goes on like this I am going to have to sit on the sidelines and watch developments that I lack the skill or resources to handle. I cannot afford another year like the last one.

Today is decision day and its going to be hard. But the first rule of investing is that you must, above all, protect your capital. If you fail to do that you have no chance of re-entering the game. Take your losses and wait for better times.

Sunday, 15 April 2012

I did it

The market recovered on Thursday and then fell on Friday. I bought more shorts as I planned. Now I wait to see if the slide will continue or if I have been suckered into a bear trap. No real way to tell until it happens.

The market held above that support line of 12880 for most of the Friday and only slipped in the last 30 minutes of trading. Perhaps this is a good sign for my position. Only time will tell. That waiting game again.

Thursday, 12 April 2012

Climbing back on the horse

It is hard when you have lost a lot of money to get back into the market, but you need to grit your teeth anddo it.

I indicated in my last post that I am now bearish about the market so the only way to go is short. I bought short positions on the US and UK markets yesterday through SUK2 and DXD exchange traded funds. I turns out that I went in too early for the market continued its retracement today. I'm holding on and planning to buy more when the up-tick has come to an end. 13000 is the strongest resistance point and it also represents the half way point of the downward move.

Not much more to say. I wait to see if I am right.

Tuesday, 10 April 2012

Woe is me

Back after three week of absence and at the beginning of a new year for my portfolio. On the 5th April each year I cash up, review my performance for the previous year, revalue any holdings at their market price on the day, and start with a clean sheet.

 My performance last year was disastrous. Almost half my losses were chalked up during the last three weeks. I was too slow to cut my losses. I was holding a portfolio that was far too risky to be left without proper supervision and I lacked full access to data which would have warned me that a major shift was taking place in the market. Too late now to grieve, I just have to work hard to make up the losses.

A quick look at today's chart shows what has happened and also what I should have done if I'd had been able to see events unfolding more clearly:

  • the support line, respected by the market since October was broken on the 6th March
  • it looked like a false break down because the market recovered within a week
  • support was broken again on the 20th
  • this followed a sharp spike in volume on 16th, the day of a new high
Those last two events should have been my signal for retreat. I actually held my positions until the 29th March by which time my losses were dramatic. To add insult to injury one of my US holdings had it's listing suspended on 28th March. I have written off that holding and this accounts for about a third of the loss accumulated during the past three weeks.

So where are we now? Yesterday the Dow closed bellow the critical 13000 level and faces a couple of previous resistance levels which are now potential support levels. I do not hold out much hope for a happy outcome. Share prices have been riding high and we are approaching the summer which is rarely a good time for the market. I enter this period with almost 90% cash and so I am now protected from danger and will be well placed to take advantage of any rises. For me the best outcome would be a sharp market fall which would mean that bargains would reappear.

Precious metals and commodities have done no better than shares. I have no precious metals but still have my cattle holdings which are not doing well. My other holdings are tiny.