Lesson Learned: Pay Attention to Your Charts

simpsons-doh

We all get busy, so I know this problem plagues a lot of us longer term swing traders and investors.    You take on a small position, justify your trade, and then when it starts doing well, maybe you take a look at selling some of it, but then, having done so…  forget about the rest?

Well, that’s what happened to me with [[EXK]] .  Remember how well that one was doing?  And I even came out and pointed out that it was battling with it’s trendline… here’s the original chart, for reference:

exkweek

Well it approached it and crashed.  I sold about a third at the time, which is my usual response.  Unfortunately, if I was paying closer attention to this weekly chart, I would’ve sold more on the more obvious retrace direction.  Hindsight is 20-20, but I should have anticipated this result:

exkweekii

Major takeaway –  I need to limit my positions, so I can pay better attention to even small positions like this one.   Think about it, not only did I miss a good opportunity to sell more or all at a significant resistance, but I psychologically barred myself from buying more at the lower support.   Via these mistakes, we breed poor performance.   I will try to do better for myself, and for you, faithful reader.

I still like EXK, by the way, as I do a lot of my smaller miners for the long term.  I just recognize that there will be myriad opportunities to make money in short swing trades in names like one, even as this bull advances.

What of the Rule of Law?

 

Some weeks back, before the auto industry bankruptcies were effected, an observer objected to Alpha Dawg’s depiction of the Obama Adminstration’s handling of the Chrysler bankruptcy as “fast and loose” with our traditional respect for the rule of law.   The Obama defender said that it was not true that the Administration sought to circumvent traditional protections for senior creditors that have been laid out in corporate law since the beginnings of the industrial age, and that such machinations would not occur.

Well now we know different, and it appears that members within the Administration (as well as certain key Congressional members) have taken it upon themselves to re-order our formal capital infrastructure along lines that are, at least in the short term, more politically expedient for them and their key constituencies in Labor and the Environmental Left. 

The question arises as a matter of linear reasoning — for how long will our “best system” survive such repeated violations of the ground rules?   As with the examples of the ratings of bogus bond agencies or the corrupted evaluations of  compromised underwriters, the credibility and cost of capital does not easily survive an uneven — and worse — arbitrary playing field.   Moreover, when the font of such arbitrary rule is the far less checkable Executive Branch (thanks to the “Imperial Presidency” that’s been on the march since Teddy Roosevelt’s day), we must ask what price capital will demand in order to stay seated in the U.S. casino?

I submit that our government’s increasing propensity to interefere on the “front end” of our private sector malinvestments raises the price of doing business in this country for everyone, from the lowliest pizza franchisee to the largest and most independent of private employers.   As a nation of commerce that must support an increasingly burdensome government debt, the U.S. can ill afford to become as short sighted with the levers of our economy as the typically historically benighted Latin American dictatorship.  

Therefore, the first thing we must insist upon — starting today — is strict adherence to the rule of law in adjudicating the many bankrupticies that are sure to follow those of our recently ill starred auto industry.    I think the only way to do so is to firewall the Executive Branch, and yes, even the Legislative Branch from these crumbling companies.  No more bailouts for cronies or interest groups, no more “temporary” takeovers, and most important, no more use of regulatory or fiscal authority to pit one competitor, employee pool or supply group against another.  If this need be enacted via judicial suit or non-violent protest, it must be our first priority.

The reason is simply that our families’  futures depend upon re-establishing our national credibility as a level playing field for business.   For if there’s one thing I’ve said here before that I’d repeat until I was blue in the face or until every short term thinking government “fix” proponent got it, it is this short slogan:

“CAPITAL IS MOBILE!”

If you think that capital will stand passively by for continual abuse simply because it’s being housed in the heretofore “land of the free”  and home of the “#1 economy”  (never mind “the brave,” we’ll let that one go for now), you do not recognize the power of the global capital markets in assessing risk.  

Believe me, after the embarrassingly thuggish “rescue” effected in the video above, the U.S. auto industry will be subject to that lesson in sudden and exquisite detail for as long as it takes this country to win it’s credibility back.

Don’t hold your breath.  Instead, get out in front of your Congressional advocates.   Let them know you take the reshaping of our legal infrastructure seriously.  And that you will hold them accountable for their silence.

Call for Enlistment!

With the summary dimissal of [[TSO]] this week, I have an opening in the ranks I’d like to fill.   In fact, I may open the barracks to two or more if the stars align properly and there are attractive combatants ready to take the pledge to hard money and portfolio longevity that our General Jackson demands.  

One course I’m considering is having the Jacksons act as a 20-man platoon, with certain soldiers being held either partially or fully in reserve during times of either overvaluation or imminent reversal, whilst the others take up the battle against the Federal Reserve and it’s 12-battalion band of Redcoat brigands.   I believe I will represent this through a “going to cash” metric that I will include in my daily reports. 

For example, my sale of TSO resulted in a net cash position of $9,357  (a little more than a $640 loss from the original $10,ooo invested).   While TSO will soon come off the roles entirely, I will keep that cash for reinvestment purposes going forward, thereby keeping the Jacksonian Portfolio to the same accounting I’m using in my own portfolio.  

This method will also help better track my partial sales, like my “one third” position sale in [[TC]] the other day at $11.21, which would have yielded me an additional $5,250 in cash (keep in mind, the original $10,000 in TC was invested at $7.11 on May 1st.  Therefore, even after having sold a third, I have over $11,000 in value remaining ).   

So given those two sales, my cash position is up to $14,600, and burning a hole im m’ pocket.

I will work on adding these cash parameters so you can have a better idea of what I’m doing every day in my portfolio, and a better view on how I’m hedging the port against cyclical downturns.

In the meantime, I welcome suggestions with regard to additional Jacksons.  I can tell you now that the precious players will have a leg up and [[GG]] and [[AUY]] remain in the top contenders.  That said, I will look forward to your calls here.   Remember that I like liquidity, and volatility is not a plus in the Jacksonian fold.  Long term value trumps all, however, especially in the context of an inflationary or continuing deflationary market.  

Best  to you all.

___________________

Addendum:   Forgive the indulgence.   I have one last tribute for my girl’s nativity.  Appropriately, it’s a song about a heart-stealing Kentucky woman, from the master himself, back before his voice went out altogether:

 

Bloody Redcoats!

Today was that rarest of days — an entirely red painted day for the Jacksonians.  Even when the PM’s are having one of their regular group regurgitations, I can usually count on MON or NRP, or one of my less precious groups like TC , sturdy TBT or even blessed Mr. ANDE to come to my aid.   But not today.

All bloody red.  Impaled on the hard cold grounds of Boston to the tune of  some 2.5% down.  

 But that’s the breaks when you are building a hard money portfolio that was up some 25% in a month.  You are going to have to expect some pullbacks and yes, drawdowns.  We will talk about certain hedging strategies over the weekend and I will have a later post tonight to go over the specific individual Jacksons and some of my other picks in more detail.

For now, it’s off to a well-deserved libation and the start of my weekend.   I will see you all later tonight with the roundup.

Addendum:  I did add some today but just a bit.   1,000 shs of [[TIE]] at $11.01 and 1,000 shs of [[CDE]] at $12.50.   They looked like they had pulled back to some stability.  We’ll see, as I plan to add more of both in future.

Special Addendum:  Vincenzo explains to Fly what happened with the servers this afternoon:

 

____________________________________________

Update“Bloody” Jacksonian Results for Today:

Name 11-Jun 12-Jun % Change   Comments
ANDE  $   30.70  $ 29.79 -2.96%   Nice move down, next stop 20day–$26.40
EGO         9.15       8.79 -3.93%   Hung right on the 50-day @ 8.74
GDX       40.92     39.54 -3.37%   50 day at $38.39
GLD       93.70     92.17 -1.63%   POG under $940.
IAG       10.08       9.85 -2.28%   50-day @ 9.44.
MON       86.85     86.54 -0.36%   Relative strength is strong here.
NRP       24.21     23.85 -1.49%   Right on the 20-day line at 23.63
PAAS       22.61     22.04 -2.52%   Tested 20 day holding here.
RGLD       43.92     42.64 -2.91%   Bounced off 50-day EMA @ 42.22
SLV       15.13     14.63 -3.30%   PO Silver down 56 cent.
SLW       10.26     10.05 -2.05%   Held 20 day trendline pretty well.
SSRI       22.81     21.95 -3.77%   Closed just a hair below 20 day EMA
TBT       57.52     56.59 -1.62%   Continued pull back. 20 day @ 54.90
TC       12.13     11.76 -3.05%   Even TC needed a rest today.
TSO       14.98     14.98 0.00%   Flat, sold out.
AVG (daily)   -2.35%    
AVG (monthly)   -2.67%    
AVG (inception)   22.40%    

 

Down is UUP And UUP is Down

uupweekly

UUP is our proxy for the dollar as you recall.   It’s right at make or break here hanging about it’s 61.8% retrace.  Now, on my other graphing software, the 61.8% — Golden Ratio — retrace line is at $24.07.   No matter, we want this sucker below $24 to feel good about the dollar not threatening this rally again.  

Good thing we are in PM’s and heavy metals as they are negotiating this squall just fine today.   On the gold side, [[ANV]] continues to show real nice relative strength, to the point where its making me wonder if there’s not something going on.   [[PAAS]] and [[PTM]] are doing well as well, and you may want to have a sally at [[NG]] as it’s getting bootstomped for no particular reason while [[NXG]] is up.  Perhaps it’s the “X” chromasone?

I like [[TIE]]  and [[TC]] is just insane.  I may sell the calls after this posting, in fact.   In the meantime, the golds and silvers are hanging tough, and [[TBT]] is right at my intermediate sell level (high of about 59.50 today).   I may sell the calls on that one as well, depending on what the dollar does to the close.

On other crazy stuff, [[ENTR]] is finally breaking out, while the [[HEB]] takes it in the shorts.   Watch that one, along with [[IMGN]] as I think they’ll both “be baaahhk” like Arnold.   Another Fly buy is [[OVTI]] which I’ve had for a while now, and is finally perking.

Queries welcome.

Here’s a great theme for today.   Whether we’re talking the dollar or the market, you gotta love this humble boy from Northern Florida.  Fantastic rendition, too, the way he gets the blase LA crowd to sing the whole first verse (Hat tip to Boomer):

Update:  Funkier version from Hamburg, sorry about the “non-embed” you can see that one on Youtube.

__________________________________

 Update:  Sorry, no calls to sell on TC!  Therefore I am selling one third of my position here at $11.21.   I am risking that I won’t get the better price to reload.

Update: Bot 1k more [[GDX]] @ $40.88 for shizzles and gizzles.  Hanging on the 61.8% fib.

Update:  Re: [[UUP]]– she ended up at $24.00 on the dot.  Isn’t that just like a woman?

_____________________________________

iBC Rumours (sic) Department

I’ve liked this Hans Christian Andersen movie since I was a little kid and they used to show it on Channel-5 (Metromedia-NY).   I hadn’t realized until now that this was Hank Paulson’s first turn before the cameras.

Developing…

________________________

Lesson Learned: Pay Attention to Your Charts

simpsons-doh

We all get busy, so I know this problem plagues a lot of us longer term swing traders and investors.    You take on a small position, justify your trade, and then when it starts doing well, maybe you take a look at selling some of it, but then, having done so…  forget about the rest?

Well, that’s what happened to me with [[EXK]] .  Remember how well that one was doing?  And I even came out and pointed out that it was battling with it’s trendline… here’s the original chart, for reference:

exkweek

Well it approached it and crashed.  I sold about a third at the time, which is my usual response.  Unfortunately, if I was paying closer attention to this weekly chart, I would’ve sold more on the more obvious retrace direction.  Hindsight is 20-20, but I should have anticipated this result:

exkweekii

Major takeaway –  I need to limit my positions, so I can pay better attention to even small positions like this one.   Think about it, not only did I miss a good opportunity to sell more or all at a significant resistance, but I psychologically barred myself from buying more at the lower support.   Via these mistakes, we breed poor performance.   I will try to do better for myself, and for you, faithful reader.

I still like EXK, by the way, as I do a lot of my smaller miners for the long term.  I just recognize that there will be myriad opportunities to make money in short swing trades in names like one, even as this bull advances.

What of the Rule of Law?

 

Some weeks back, before the auto industry bankruptcies were effected, an observer objected to Alpha Dawg’s depiction of the Obama Adminstration’s handling of the Chrysler bankruptcy as “fast and loose” with our traditional respect for the rule of law.   The Obama defender said that it was not true that the Administration sought to circumvent traditional protections for senior creditors that have been laid out in corporate law since the beginnings of the industrial age, and that such machinations would not occur.

Well now we know different, and it appears that members within the Administration (as well as certain key Congressional members) have taken it upon themselves to re-order our formal capital infrastructure along lines that are, at least in the short term, more politically expedient for them and their key constituencies in Labor and the Environmental Left. 

The question arises as a matter of linear reasoning — for how long will our “best system” survive such repeated violations of the ground rules?   As with the examples of the ratings of bogus bond agencies or the corrupted evaluations of  compromised underwriters, the credibility and cost of capital does not easily survive an uneven — and worse — arbitrary playing field.   Moreover, when the font of such arbitrary rule is the far less checkable Executive Branch (thanks to the “Imperial Presidency” that’s been on the march since Teddy Roosevelt’s day), we must ask what price capital will demand in order to stay seated in the U.S. casino?

I submit that our government’s increasing propensity to interefere on the “front end” of our private sector malinvestments raises the price of doing business in this country for everyone, from the lowliest pizza franchisee to the largest and most independent of private employers.   As a nation of commerce that must support an increasingly burdensome government debt, the U.S. can ill afford to become as short sighted with the levers of our economy as the typically historically benighted Latin American dictatorship.  

Therefore, the first thing we must insist upon — starting today — is strict adherence to the rule of law in adjudicating the many bankrupticies that are sure to follow those of our recently ill starred auto industry.    I think the only way to do so is to firewall the Executive Branch, and yes, even the Legislative Branch from these crumbling companies.  No more bailouts for cronies or interest groups, no more “temporary” takeovers, and most important, no more use of regulatory or fiscal authority to pit one competitor, employee pool or supply group against another.  If this need be enacted via judicial suit or non-violent protest, it must be our first priority.

The reason is simply that our families’  futures depend upon re-establishing our national credibility as a level playing field for business.   For if there’s one thing I’ve said here before that I’d repeat until I was blue in the face or until every short term thinking government “fix” proponent got it, it is this short slogan:

“CAPITAL IS MOBILE!”

If you think that capital will stand passively by for continual abuse simply because it’s being housed in the heretofore “land of the free”  and home of the “#1 economy”  (never mind “the brave,” we’ll let that one go for now), you do not recognize the power of the global capital markets in assessing risk.  

Believe me, after the embarrassingly thuggish “rescue” effected in the video above, the U.S. auto industry will be subject to that lesson in sudden and exquisite detail for as long as it takes this country to win it’s credibility back.

Don’t hold your breath.  Instead, get out in front of your Congressional advocates.   Let them know you take the reshaping of our legal infrastructure seriously.  And that you will hold them accountable for their silence.

Call for Enlistment!

With the summary dimissal of [[TSO]] this week, I have an opening in the ranks I’d like to fill.   In fact, I may open the barracks to two or more if the stars align properly and there are attractive combatants ready to take the pledge to hard money and portfolio longevity that our General Jackson demands.  

One course I’m considering is having the Jacksons act as a 20-man platoon, with certain soldiers being held either partially or fully in reserve during times of either overvaluation or imminent reversal, whilst the others take up the battle against the Federal Reserve and it’s 12-battalion band of Redcoat brigands.   I believe I will represent this through a “going to cash” metric that I will include in my daily reports. 

For example, my sale of TSO resulted in a net cash position of $9,357  (a little more than a $640 loss from the original $10,ooo invested).   While TSO will soon come off the roles entirely, I will keep that cash for reinvestment purposes going forward, thereby keeping the Jacksonian Portfolio to the same accounting I’m using in my own portfolio.  

This method will also help better track my partial sales, like my “one third” position sale in [[TC]] the other day at $11.21, which would have yielded me an additional $5,250 in cash (keep in mind, the original $10,000 in TC was invested at $7.11 on May 1st.  Therefore, even after having sold a third, I have over $11,000 in value remaining ).   

So given those two sales, my cash position is up to $14,600, and burning a hole im m’ pocket.

I will work on adding these cash parameters so you can have a better idea of what I’m doing every day in my portfolio, and a better view on how I’m hedging the port against cyclical downturns.

In the meantime, I welcome suggestions with regard to additional Jacksons.  I can tell you now that the precious players will have a leg up and [[GG]] and [[AUY]] remain in the top contenders.  That said, I will look forward to your calls here.   Remember that I like liquidity, and volatility is not a plus in the Jacksonian fold.  Long term value trumps all, however, especially in the context of an inflationary or continuing deflationary market.  

Best  to you all.

___________________

Addendum:   Forgive the indulgence.   I have one last tribute for my girl’s nativity.  Appropriately, it’s a song about a heart-stealing Kentucky woman, from the master himself, back before his voice went out altogether:

 

Bloody Redcoats!

Today was that rarest of days — an entirely red painted day for the Jacksonians.  Even when the PM’s are having one of their regular group regurgitations, I can usually count on MON or NRP, or one of my less precious groups like TC , sturdy TBT or even blessed Mr. ANDE to come to my aid.   But not today.

All bloody red.  Impaled on the hard cold grounds of Boston to the tune of  some 2.5% down.  

 But that’s the breaks when you are building a hard money portfolio that was up some 25% in a month.  You are going to have to expect some pullbacks and yes, drawdowns.  We will talk about certain hedging strategies over the weekend and I will have a later post tonight to go over the specific individual Jacksons and some of my other picks in more detail.

For now, it’s off to a well-deserved libation and the start of my weekend.   I will see you all later tonight with the roundup.

Addendum:  I did add some today but just a bit.   1,000 shs of [[TIE]] at $11.01 and 1,000 shs of [[CDE]] at $12.50.   They looked like they had pulled back to some stability.  We’ll see, as I plan to add more of both in future.

Special Addendum:  Vincenzo explains to Fly what happened with the servers this afternoon:

 

____________________________________________

Update“Bloody” Jacksonian Results for Today:

Name 11-Jun 12-Jun % Change   Comments
ANDE  $   30.70  $ 29.79 -2.96%   Nice move down, next stop 20day–$26.40
EGO         9.15       8.79 -3.93%   Hung right on the 50-day @ 8.74
GDX       40.92     39.54 -3.37%   50 day at $38.39
GLD       93.70     92.17 -1.63%   POG under $940.
IAG       10.08       9.85 -2.28%   50-day @ 9.44.
MON       86.85     86.54 -0.36%   Relative strength is strong here.
NRP       24.21     23.85 -1.49%   Right on the 20-day line at 23.63
PAAS       22.61     22.04 -2.52%   Tested 20 day holding here.
RGLD       43.92     42.64 -2.91%   Bounced off 50-day EMA @ 42.22
SLV       15.13     14.63 -3.30%   PO Silver down 56 cent.
SLW       10.26     10.05 -2.05%   Held 20 day trendline pretty well.
SSRI       22.81     21.95 -3.77%   Closed just a hair below 20 day EMA
TBT       57.52     56.59 -1.62%   Continued pull back. 20 day @ 54.90
TC       12.13     11.76 -3.05%   Even TC needed a rest today.
TSO       14.98     14.98 0.00%   Flat, sold out.
AVG (daily)   -2.35%    
AVG (monthly)   -2.67%    
AVG (inception)   22.40%    

 

Down is UUP And UUP is Down

uupweekly

UUP is our proxy for the dollar as you recall.   It’s right at make or break here hanging about it’s 61.8% retrace.  Now, on my other graphing software, the 61.8% — Golden Ratio — retrace line is at $24.07.   No matter, we want this sucker below $24 to feel good about the dollar not threatening this rally again.  

Good thing we are in PM’s and heavy metals as they are negotiating this squall just fine today.   On the gold side, [[ANV]] continues to show real nice relative strength, to the point where its making me wonder if there’s not something going on.   [[PAAS]] and [[PTM]] are doing well as well, and you may want to have a sally at [[NG]] as it’s getting bootstomped for no particular reason while [[NXG]] is up.  Perhaps it’s the “X” chromasone?

I like [[TIE]]  and [[TC]] is just insane.  I may sell the calls after this posting, in fact.   In the meantime, the golds and silvers are hanging tough, and [[TBT]] is right at my intermediate sell level (high of about 59.50 today).   I may sell the calls on that one as well, depending on what the dollar does to the close.

On other crazy stuff, [[ENTR]] is finally breaking out, while the [[HEB]] takes it in the shorts.   Watch that one, along with [[IMGN]] as I think they’ll both “be baaahhk” like Arnold.   Another Fly buy is [[OVTI]] which I’ve had for a while now, and is finally perking.

Queries welcome.

Here’s a great theme for today.   Whether we’re talking the dollar or the market, you gotta love this humble boy from Northern Florida.  Fantastic rendition, too, the way he gets the blase LA crowd to sing the whole first verse (Hat tip to Boomer):

Update:  Funkier version from Hamburg, sorry about the “non-embed” you can see that one on Youtube.

__________________________________

 Update:  Sorry, no calls to sell on TC!  Therefore I am selling one third of my position here at $11.21.   I am risking that I won’t get the better price to reload.

Update: Bot 1k more [[GDX]] @ $40.88 for shizzles and gizzles.  Hanging on the 61.8% fib.

Update:  Re: [[UUP]]– she ended up at $24.00 on the dot.  Isn’t that just like a woman?

_____________________________________

iBC Rumours (sic) Department

I’ve liked this Hans Christian Andersen movie since I was a little kid and they used to show it on Channel-5 (Metromedia-NY).   I hadn’t realized until now that this was Hank Paulson’s first turn before the cameras.

Developing…

________________________

2014 iBankCoin Investors Conference