The silver and the gold

Lots of resistance to a further upward move in gold

Well I did it. I sold up all those shares I bought leaving a tiny rump of Hong Kong shares. So far it is uncertain whether I was premature or not. The Dow is hovering uncertainly at its high. But I have put a substantial chunk of money into my pocket and have the emotional energy to look dispassionately at gold and silver.

Before I do that, let me examine my emotional state. I climbed into the market a little early on the 18th when I still thought that the 11700 support line was important. VectorVest was showing that a bullish strategy had yielded positive results over the previous week when the market was falling, so I thought I would give it a go. Bad move! I sat watching money drain away and I had to take losses on the worst performers. None of that cohort of shares did much good except CISQ. A lesson learned.

My next two moves were well timed UK purchase on the 22nd and US shares on the 25th. And I used share picking strategies that I know, as a result of lengthy back testing, work in these circumstances. More purchases on the 28th and 29th yielded more profits. In the US I went for systems that picked large cap shares which disappointed - I was going for safety - not always so smart.

And then belatedly I went for Hong Kong which yielded meteoric returns in a day. I have problems with Hong Kong because I only start to think about it in the evening. I buy my Hong Kong shares in a SIPP and not all the shares have been vetted to show they qualify for a SIPP. I have to get the TD Direct Investing to check, and the department that checks has gone home. They do not return before the market closes in the morning so I am stuffed until the next day. I could have upped my stake in the shares that are pre approved but then I am increasing my risk. This time it would have paid off handsomely another time it might  have been a disaster.

So how did I feel while all this was going on. Frankly it was grim. I was not too worried about the risk to my capital. I am used to that. I am still sitting on an unpleasant loss for the financial year and can take that in my stride. It is the short term unpleasant feeling that here I am sitting on a hefty profit after just a few day. Am I going to lose it? A decision is needed and it is hard to make. Next thing to work on.

Now those pesky precious metals. Gold is coming up to a horrid looking diagonal resistance line, it is sitting at an intermediate resistance level and yesterday's price movement indicated uncertainty about a continuing upward move. I shall have to consider selling some of my gold to reduce risk. However, I am constrained by all those warning sirens that are being sounded by ministers and bank chiefs. What is the best place to be when the S hits the F?

Silver presents a confusing picture

Silver presents an altogether more untidy picture. It has broken down through several support levels but in a rather unconvincing way. The chart provides no decent guidance and I suppose sitting on the sidelines is the best strategy. Lightening exposure is second best. My instinct, however is to hold onto both gold and silver. The battle rages in my heart.

Trials and tribulations

DJI 1st November

At 2:15 I was woken by the dog slurping up his water so I went to look at the Hong Kong market. It was displaying weakness but nothing terrible. I placed my orders to sell my Hong Kong stocks and went back to bed. In the morning they were still showing as pending and the market had dived. You have to put in limit orders on the HK market so I thought that I had screwed up on the limits in a falling market. A bit of investigation revealed that this was not so. I waited till 7:30 when the TD Waterhouse staff started answering their phones. It was then that I discovered they had a problem with their systems - because of the change of clocks of all things. Computers take time too seriously and screw up.

Anyway it seems that TDW were inclined to do the right thing and roll back to check whether the trades would have gone through. And if they found that the trades should have gone through they would honour them. Big sigh of relief. Until in the afternoon I discovered they had accepted three trades but had cancelled three others. Luckily for me the HK Exchange has a reasonably nifty web site that tracks prices and trades. I had a look and accepted that one of the trades would not have gone through, a second was debatable, the third was clearly in my favour. The Exchange data is not crystal clear so I am now waiting to see what TDW make of it all. It did not help that the people who were making the corrections thought that 2:56am GMT was 13:56 HK time (It's actually 10:56). I have sent in my complaint and await the result with interest.

All this stopped me fretting about what was happening on the market. I had been right to pull out it seems. Most of that euphoria that had pushed the DOW up to 12284 has smashed into the shards like a broken Hellenic urn (I turn my hand to the purple prose when I feel like it. And I have been stressed all day.). But I am keeping my anxiety in check. Remember all those support lines that I pointed out yesterday. They are still there and the 11720 seems to be doing its stuff as I write. It was the thought of those support lines that stopped me from buying shorts - that and the speed of the fall. But it's a long time till 8pm when the US market shuts and things may change. The important support line is still 200 points lower.

In the mean time gold and silver have been thrown out with the bath water once more. And that hurts because I still have big holdings.