What's wrong with being wrong

Here's a share chart for a change

You all know of the struggle I've had with gauging the direction of the market over the last few weeks. I've been waiting for a fall that never came, finally accepted that I was wrong and switched my position. I accepted that the bulls were in the ascendant. But joining a bull run after it has already made a lot of ground means that you are probably paying too much for the shares you buy and they are poised to go down. I have attempted to mitigate this risk by looking for shares that are moving in a regular wave pattern and are near the bottom of the wave.

This is a risky business because there still is the danger of a big fall in the market which will leave all ships stranded. But  nothing ventured nothing gained. In the last post I listed my fist batch of shares bought on the 25th. Here are the ones I have bought since then. UK QQ. and IRV. US PGN VZ TE SO. (no recommendation just some shares to look at).

We buy , we hope

Of all the shares I have bought SVS is the only one that has done well and is the main chart today. TATE is running along the bottom of its channel so I show that too. I have a way to go before I can cash in and nothing looks close to a stop loss, so I am holding on. It feels good to be picking shares again.

My portfolio is now divided as follows: Gold 4% Commodity 5% Equity 46% Cash 45%

Monday was my birthday and I was taken out on a treat to the Hand and Flowers at Marlow. It was fabulous. It has recently been awarded its second rosette by the Michelin guide. I had a Parsley Soup with Smoked Eel, Bacon and Parmesan Tortellini to start, followed by the most wonderful fish and chips ever and for my pud I had Pear Soufflé with Poire William Purée, Sweet Cheese and Mace. It was all topped off by my lovely friends singing happy birthday. They pretended to be too shy but in the end they girded their loins and most sweetly they did it too.

The birthday celebrations continued on Wednesday when I was taken to a Burns night supper at a local pub called the Foxham Inn. It has yet to be discovered but has a fabulous chef. I had never been to a Burns night before and it was a lot of fun. The Haggis came in the form of a Scotch egg with the haggis on the outside and an quail's egg on the inside. This was to help us sassenachs to cope. It was a most enjoyable evening with poems from the bard punctuating the courses (melt in the mouth roast Aberdeen Angus with roast potatoes and neeps followed by cranachan - a desert made of toasted oatmeal, whiskey, honey cream and raspberries).

So many well known phrases come from Rabbie Burns; My love is like a red red rose, Oh wad some power the giftie gie us To see oursel's as others see us!  and, most appropriate when trading, The best plans of men and mice often go awry.

Chocolate and Cola Cake with Cola Float

Suntech Power Holdings - Ready to bounce?

I thought lighting had wiped out my internet connection but a restart sorted the problem.

I am happy to report a second good day despite the pullback in the markets. It is mainly the precious metals that have generated profits today.

But so did those shares that I bought using bottom fishing selection criteria. Today's chart looks at the best performer: STP. I bought it on Friday and lost a little money. Then it surged yesterday. Today it gave me the heebee jeebees by running up and down. It could still fade before the day is out, but at present I am sitting on 16% profit. Since Friday! The others have not done so well and EK is losing me money. But I buy on the principle that you spread your risk across a number of shares and you don't attempt to cherry pick.

STP is a share that came up when looking for shares that had a reasonable fundamental value but had  dramatically fallen in price. In the big August fall, the price had been beaten down to a quarter of its previous value. By the time I bought it on Friday it had already started to recover and had risen by 20% in a fortnight. So it was a reasonable bet as long as it was in amongst other shares with the same sort of characteristics.

I am not kidding myself that this is a one way bet. The tricky bit will be persuading myself to take profits before there is a turn in fortunes. For now its fingers crossed time.

Was taken yesterday to a favourite local pub which has been awarded the Good Pub Guide dining pub of the year award and very well deserved too. It is the Potting Shed in Crudwell. Had beautifully gamy wild boar and plum burgers with triple cooked chips. Followed by a divine chocolate and cola cake. So soft and light it wasn't true. Accompanied by a true blast from the past: a cola float (ice cream floating in CocaCola). This is how to live.

Sell Away

The support lines have done their stuff. As soon as I saw that the FTSE was strengthening this morning and there was no follow through on the fall on Wall Street in the futures market I concluded that the support lines were bringing out the bulls. I sold more than half of my shorts on the FTSE (SUK2) and then more than half of my shorts on the DOW and S & P (DXD and SDS) as soon as the US market opened. (I was taken to lunch at the Moody Goose in Midsomer Norton. The food was fabulous. I thoroughly recommend it.)

I was very well fed but I was flying blind when I sold the shares but it turned out all right and I pocketed a healthy profit.
I also cashed in a decent profit on silver (PHAG). The market was weakening this morning after a poor performance yesterday and it was following something that looked like a peak.
Gold turned down after I went out so I had no chance to sell. Some of it will probably go tomorrow morning. I am sitting on a healthy profit.
With the indices back inside their range tomorrow may be dull but I intend to stay alert because this market is so jumpy.
I am now 83% in cash, 10% mostly gold and 6% in shorts.