Hi Roe..... A Little Shake Out Action here...but, what's new about that ?
I got stopped out on a few shares yesterday, right after talking about using tighter stops than normal...but, I'm not going to give back much of this trade....we worked too hard for it.
The best part of this trade for me was some June Calls bought during the April/May washout...and some Put's sold for premium on the retracement that never came into the money and became retained premium/cash - that worked out very well. So, I've been willing to ride with the bulk of my position so far...BUT -
The Goldfunds either get another round of fresh cash inflows off of this China Re-Peg News to crank up the Volume and break the HUI thru this 200 dma WALL that we just can't seem to penetrate... or they won't.
It's just that simple.
The "cash" that was out there both Individually & Institutionally; was already deployed during the late April/early May washout.
If we don't see substantial inflows of fresh Cash to the Gold Funds... we're going to re-test this move and soon imo.
As I mentioned earlier (although I am hesitant to type the words here (vbg) - I am really surprised that we haven't already re-tested the HUI 185ish level, as I really thought we'd see a 50% retracement & re-test of the HUI 165 to 205 move.
But, so far... no re-test.
We've had an amazingly narrow Trading Range of late and the HUI 200 level has been pretty "sticky" as the HUI has traded during the day at, or above HUI 200, for 17 of the last 27 trading days... which has been 70% of the trading days over the last 6 weeks.
That's TIGHT... no real retracement and only a maximum spread of 11 HUI Index points from the closing low - to the closing high during the last 6 weeks.
That's basically only a potential 5% tradeable spread/range...not real favorable for active trading on a risk:reward - cost:return basis.
Here's the last 5-6 Weeks of the HUI:
Date.........Open.....High......Low....................HUI Close
25-Jul-05 201.92 202.02 199.33 199.34 0.... 199.34
22-Jul-05 201.28 201.92 200.30 201.92 0.... 201.92
21-Jul-05 196.10 201.46 196.10 201.28 0.... 201.28
20-Jul-05 193.93 197.29 193.93 196.10 0.... 196.10
19-Jul-05 193.13 194.11 191.62 193.93 0.... 193.93
18-Jul-05 194.08 195.94 193.13 193.13 0.... 193.13
15-Jul-05 196.99 196.99 193.78 194.08 0.... 194.08
14-Jul-05 203.33 204.57 196.99 196.99 0.... 196.99
13-Jul-05 204.68 204.68 202.32 203.33 0.... 203.33
12-Jul-05 205.01 206.87 203.28 204.68 0.... 204.68
11-Jul-05 199.88 205.35 199.88 205.01 0.... 205.01
8-Jul-05 200.22 202.97 199.24 199.88 0...... 199.88
7-Jul-05 198.24 200.48 197.59 200.22 0.... .200.22
6-Jul-05 196.63 200.02 196.61 198.24 0 .....198.24
5-Jul-05 202.07 202.07 196.24 196.63 0......196.63
1-Jul-05 201.56 202.27 196.25 202.07 0..... 202.07
30-Jun-05 203.10 205.46 201.13 201.56 0..... 201.56
29-Jun-05 194.42 203.10 194.38 203.10 0.... 203.10
28-Jun-05 196.45 196.45 193.20 194.42 0 ....194.42
27-Jun-05 199.21 199.22 196.45 196.45 0.... 196.45
24-Jun-05 197.70 201.03 197.45 199.21 0 ....199.21
23-Jun-05 196.42 200.72 196.42 197.70 0 ....197.70
22-Jun-05 198.95 198.95 195.38 196.42 0.... 196.42
21-Jun-05 196.87 199.98 194.36 198.95 0.... 198.95
20-Jun-05 202.16 203.74 196.56 196.87 0.... 196.87
17-Jun-05 201.44 204.52 201.44 202.16 0.... 202.16
16-Jun-05 194.34 201.92 194.34 201.44 0.... 201.44
I'm hearing that there are "some" inflows into the Gold Funds here...but, as I said - the Oil's are just inhaling the majority of funds earmarked for any Natural Resource/Commodity oriented plays here.
Hopefully all we are seeing here is the MM's and some Hedgie's trying to shake loose & scoop up a few cheap shares on this low volume before any inflows off of the China Re-Peg news start getting deployed.
The next 5-7 trading days are KEY for determing how this Rally Leg plays out ... we either get Strong Upside VOLUME from fresh inflows of Cash to the Gold Funds and break through this 200 dma Technical Wall and extend this Rally for another 20-some Points, before coming back and retesting the 200 dma for support; or, we go back to some very choppy trading and WILL retest this move off of the April/May bottom.
Don't be afraid of locking in gains people and to use tight stops... we can always re-buy on the breakout of this trading band and a print at, or above HUI 207 will kill 2 birds with 1 stone - taking out both the prior high of this move from July 12th (206.87) and the 200 dma which now stands at 206.55.
So HUI 207 is our TA "powerball"
We can't do anything about whether enough fresh money comes into the Gold Funds and in enough volume to re-lite the Gold Fuse here...but, we can protect these Trading Profits.
Untill we see a breakout on VOLUME - indicative that Gold Funds are getting some fresh cash inflows to work with here... It's time to play DEFENSE.
Job #1 - is to NOT give back much, if any of these well earned and hard fought for 30-40 HUI points.
If we don't get strong fresh inflows of Cash to the Gold Funds off of this China Re-Peg news; it may take a couple of more TIC reports and a bit more time for the Market to digest the China Re-Peg and for some of this long US Dollar spec money to unwind before Gold get's it's 2nd wind here....and that 2nd Wind is still a when, not if - proposition in my opinion.
In the meantime, remember we won't get paid for Backing Up the Truck in April & May untill we ring the Cash Register.
Don't give it back... and HUI 207 is the important hurdle here over the next 5-7 trading days.
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