Hi Condor re: ["With all due respect, you are awfully self-forgiving of your u-turns.....So, a post as aggressive as the June 27 one has no place in a responsible recommendation."]
Self-forgiving ?
For what ... a so-called "U-Turn" that locked in very significant profits on a well timed Portfolio weighted trade ?
What's to be forgiven ?
I'm not trying to be condenscending, but the readiness, willingness and the ability to turn on a dime, or as you refer to it - "making a U-Turn"... is the single most valuable tool in any successful traders arsenal and that concept should hopefully have been acquired at the "trading 101" level ?
In my world, within the Oilpatch & Gold and PM Sectors, the inherent volatility within these sectors makes "U-Turns" an absolute pre-requisite for not just maximizing Profits, but in minimizing Losses as well.
ie:
Far too many Goldbugs just got decimated by a 5 Month - 100 Point Death March in the Goldstocks that occured in just 5 months from November to April.
The last half of this correction was especially brutal and swift - as the HUI collapsed from the HUI 225 range in mid-March .... down to HUI 175 in less than 20 trading days.
This took the HUI:GOLD ratio to an extreme divergence and as reported by Hulberts Digest, John Hathaway of the Tocqueville Fund et al - it also created a complete and total "sentiment" washout within the Gold Sector.
To have Profited from this event, required Traders to have exercised at least one of two "U-Turn" Trading Options:
1. To already have exited & have been "out" - which would have required one making a "U-Turn" from Bullish to Bearish at some point in time prior to the washout.
and/or -
2. To have made a "U-Turn" from being bearish and "out" to being bullish and "in"...directly into that final tsunami washout of the goldstocks and gold bugs.
This recent volatility in the Gold Sector shouldn't be a surprise to anyone here, anymore than the readiness, willingness and the ability to make "U-Turns" should be...
And it isn't going to change anytime soon - it's always been a highly volatile sector and always will be.
Another primary example of having to be able to "turn on a dime" was earlier in the Gold Cycle in 2002 when the HUI exploded from a low of HUI 112 on May 16th - up to a high of HUI 144 in just 4 trading days... and a few weeks later in June, the HUI imploded from a high of HUI 155, down to a low of HUI 114 in just 5 trading days !
32 Points Up and 41 points down - a total of 73 HUI Index points all occuring in a total of just 8 Trading days !
...now that's v-o-l-a-t-i-l-i-t-y.
It you blinked, froze, or hesitated as a Trader...you became roadkill on the Yellow Highway.
This is not a buy & hold sector...you MUST be able to turn on a dime and make a U-Turn within days, not weeks.
And if anyone thinks this is a buy & hold sector - they need to have their money being managed by their broker, or in a Mutual Fund - period.
Traders in this sector need to be able to make U-Turns within hours, or days... not weeks, or months.
On this recent washout bottom that saw the HUI collapse 50 points in the final 20-some days.... we only had 3-4 days in late April and then again, 6-7 days in Mid May in which to get "in" at the bottom between HUI 165 and 175; as the HUI then did an immediate "U-Turn" itself, broke out from it's low and "V-Rallied" 40 points straight up to HUI 200+ in about 20 trading days.
The Lesson here is really quite simple:
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~ If the Sector does "U-Turns" in both directions and on a frequent basis ... it should be pretty obvious that Traders had better be able to do the same ~
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Making "U-Turns" is not an option...it's a pre-requisite.
We can never control how the market reacts to events, but we can control how we react to the market.
To think otherwise is like saying you want to be a Rodeo Star, but then complain about the bumpy ride ?!?!?!
Welcome to the U-Turn Universe...
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