“Don’t buy wigs that come off at the wrong time – Morrie’s wigs don’t come off! Even underwater! And remember, Morrie’s wigs are tested under hurricane winds.”
Even underwater, it is worth remembering that bottoming, much like balding, is a process, not an event.
And therefore when we see weekly charts like Alpha Natural Resources continue to frustrate coal bulls, it may very well be part of the bottoming process in lieu of another leg lower into bankruptcy.
We saw plenty of these types of random swoons lower even as solars and natural gas tried to put in bottoms in recent quarters. Back then, I had noted especially with natty that the bottoming process can be long and tedious, but given the steep move lower and building bullish divergences the market started to change to punish latecomer, complacent shorts.
I can also assure you that as sexy as some soft commodities look here, they too will endure these sharp moves lower.
And, of course, there is always the bear case that the coal stocks go to zero virtually across the board.
I am not sold on that last point at all.
However, it is a good reminder, something I stress often, that the levered ETF’s, long and short, for the commodity complex represent short-term, very aggressive trading vehicles and nothing more–You are in, out, and on your way to the next trade.
That approach has enabled us to minimize losers while capturing excellent alpha to the upside dating back to last summer inside 12631.
Even this deep underwater, the coal stocks might still be bottoming…
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you have hit your stride these last few weeks. Well done Chess!
Thank you, sir. Great to be working with you.
Speaking of leveraged, I got out of JNUG today with a 10% profit. Nothing huge, but you know if you scalp 7-10 of these a year, who laughs last?
Also UNG – bear flag forming as winter hopefully ends? I’m considering DGAZ for a few percentage if UNG breaks below 22.40
Exactly–Big natty reversal this afternoon.
“…bottoming, much like balding, is a process, not an event” Lol!! For sure, neither stop where or when their victims want them to…
LoL
I know $CSCO isn’t cool… But look at the long-term charts. I think I see a potentially major breakout in progress on weekly or way back on monthly. Nice channel forming with just above 20 as support.
Shorter trendlines make it either look right at resistance or already broken out.
Gapping around earnings lately. Folk on StockTwits all over the potential for downside on earnings this arvo. Maybe. It wouldn’t take a big downside gap to break below the channel I’m looking at.
I’ll hold onto some long-term shares I picked up around $15 in 2011. I’ll probably buy more if it tanks – right around $20 looks about right. Below that and it could mean purgatory for the cisco kid.
ps: I don’t do coal. The thought of any sort of fine dry powder makes my skin crawl – it’s like fingers on a chalkboard for me but more tactile. And have you not seen zoolander?
Hahaha, Zoolander. Go drink your orange mocha frappuccino.
I think zoolander will just keep getting better with time. Probably a generational thing though.
This is a classic, you say? http://www.youtube.com/watch?v=v9ny0HT1gQg
(imagine that I’m doing the weak little sissy cough-cough for my black lung. i’m heading out for homo-erotic gasoline fight now…)
LoL
‘do the jitterbug’ in a topless jeep driving through manhattan? perfect…