I reduced the amount of short exposure I had for precious metal stocks. This has been a very good and pleasant drop and I was heavily short.
I put some hedges in place, and the rest will go on stops. I will try to do a detailed post some time soon.
S&P 500 – May 15, 2012
-
Bottom Line: Long term trend is up. Mid-term trend is down. Short-term
trend is down Weekly S&P stage is Late Advance (2-C) Daily S&P stage is
Strong Decli...
1 year ago
Posts
2 comments:
Hey Piazzi,
Sorry for the long absence!!
I was wondering when started shorting the gold stocks. I know we talked about it before, but I waited until after the end of December to see if there was going to be another push higher. The funny thing is that gold stocks almost followed the same pattern as last year. I am weary though of shorting this late. Given this nice drop, should we be on the lookout for a bounce up soon? Also, what do you think the bullion? The correlation seems to be out the window as bullion broke 1000 while the stocks hardly responded. This divergence is strange, and given this has gone on for a long time, I am questioning whether or not the gold stocks will have more downside. After all, this appears that this is the "C" wave correction now. Secondly, bullion is only buoyed by investor demand now, and despite all that has gone on, people are still not pouring into this as a safe haven. They look to treasuries.
As a general comment, I think we might be in for another bear market rally. I see a long term five wave down structure from May to now, and given the recent confidence in bank stocks (at least up here in Canada), it seems likely that a thrust down will occur to let the bears clean out the bulls only to have short covering and renewed interest.
It seems that is what is taking shape: On BNN a day or two ago, I saw Prechter on Squeezeplay suggesting to cover the shorts. I am starting to agree with him. He didn't suggest to go long however, but a tradeable rally seems to be in the cards. Thoughts?
JK
Hi JK,
all good and thought provoking points. It seems like you have been reading my mind, I am working on two posts for the weekend, one on S&P, the other gold stocks, and some of the points you brough up were on mind as well.
stay tuned ;-)
Post a Comment