TraderWise

A long time reader was kind enough to point me towards A-Power Energy (APWR) and its recent activity. This was a name I stuck with for a long time (9 months), while amazed the market could care less about its single digit PE ratio. All it did was drop - no matter what good news they released. Finally I threw in the towel in early March [Mar 9, 2009: Closing A-Power Energy], and you can guess how the story turns out from there.

There are two ways to play the Banana Republic - short the dollar or long the gold. Since the world is still awash in fear, they are running into dollars. (how perverse) So that will be the long term way to play this; in the short run I am going to finally start building a gold position - I am using the double long ETN (for gold) to get some pop - but it's basically just a straight gold play instead of messing with miners.

Friday, March 27, 2009

June Gold and May Silver are expected to continue to feel downside pressure as long as they have to compete with equity markets for investment dollars. The short-term picture has turned bearish since the stock markets began this current leg up. Longer-term these markets should find support because of the potential of inflation heating up.

We have an extreme rarity this morning - while U.S. markets often gap up, they rarely gap down anymore.  The excuse is weaker European data but frankly with such an overbought market, once it is ready to finally sell off any reason will do.  For personal reasons I find the gap down annoying because I wanted to get aggressive on index shorts once the S&P 500 sliced through 1130 (during the market day) ... rather than seeing a swoon in premarket that I cannot participate in.  The market rarely makes life easy does it?

The first of June is the opening day of “Hurricane Season,” which makes it an excellent time to consider insurance companies, again, in terms of whether or not they should be in our portfolios–if, indeed, anything much ought to be other than metals and sound energy sources.

Now that Labor Day is going to be behind us, the moment of truth arrives for this market. Specifically, can volume finally perk back up to respectable levels?

We’re probably going to need it if we want to get out of these trading ranges in the major indexes, but historically we do see volume begin to pick back up post-Labor Day, so the odds are in our favor.

This article was written a couple of years ago and I thought I would post it again. It should help you distinguish a “dip” from a “top”. When a stock has had a “nice run”, the first material sell-off (10%+) gains attention. Traders are trying to access if the highs are finally in, or if this is a great entry point for a long position. I look at both the technicals and fundamentals to help me decide “which camp I’m in”. From a technical stand point I start with a long term perspective.

A heckler left a stupid comment (that I did not allow to be published) on a post from 2005. And while the comment was stupid the post was interesting and one I did not remember. The post was short, here it is in its entirety;

CNBC Asia had a very interesting interview with Vernon L. Smith who won the Nobel Prize for economics in 2002.

“Gold must hit $2,200 an ounce to match its real peak of Jan. 1980. Or so almost everyone thinks…”

What’s in a number? Ignoring the day-to-day noise, more than a handful of gold dealers and analysts reckon gold will hit $2,200 an ounce before this bull market is done.

Why? Because that’s the peak of 1980 revisited and re-priced in today’s US dollars.

Simple, right? Too simple by half, in fact.