Hi rails,
Not meaning to ignore ya, just happened to conk out before I read your post(s), ggg. Yes, I'm dabbling in PM's again, adding to positions. BTW, thanks for the symbol on Corner Bay, although it doesn't work for my broker,
as they don't do non US listed canadian stocks. Guess I can always open another account somewhere.
I've had a number of US listed canadian golds that pay dividends, I just give the paper work to my accountant and let him handle it. The thrill of doing my own tax work [sic] faded for me, as soon as I could afford someone else to do it, a long time ago, ggg!
Would have preferred XAU/HUI hold recent lows, looks like that might not be the case today. In a post a week or so ago I suggested that current holders be prepared to hold into the HUI 57 and XAU 48 levels.
That's a possibility on the charts and one we should be prepared for. 57 is one way of measuring, there is also another possibility of HUI 54-55 where there is strong support. Guess I would be concerned if that one was broken, but you have to watch for the running of the stops on these levels and a quick rebound also. TA is a bit iffy on the gold/silvers here, it's tricky bottom stuff and gets to be tea leaves with the PM charts lately.
Despite that, I am not pessimistic on the pm stocks, it just seems there is some downside likely before payday comes. And OTOH (seems a goldbug chartist needs a LOT OF HANDS the last few years, ggg) there is also a case to be made on the longer time segment charts for a reversal here.
I will further note that for now I am ignoring the descending triangle from the May highs on the HUI/XAU, but if we break recent lows convincingly, going to HUI 56-57, then the potential effects of this have to be watched for because they could take us down to area of "Slider's PMbuyin' Heaven".
Seems like I'm talkin' trash here, but that's just what I see on the charts and why I've taken so many short term positions and reversals here. It's the same old game of the last few years TA and that's how I survive it. On one of those other hands, the fundamentals have improved substantially over the last six months and the TA is a bit more promising, albeit not any less confusing.
So how will I play it? I prefer not to be fully invested except for short term moves at major supports. The short term moves could always end up being THE long term move, so jumping in at supports makes sense as long as one is willing to jump partially out when or if it turns down again. I'm talking the difference between being fully invested and just having some LT holds. The logic of being in heavily at support levels is if we start a major rally from one of them, then you are there. If it turns out to be a minor rally one then starts withdrawing some profits as it begins to turn down. By the time you are back to support you are out of all the positions you added on and back to LT holds. If it rallys again its the same all over. If support fails then it's a tape read, short term TA skills, on whether you trim positions from the LT or hold'em, but it's critical to be correct on that because you want to sell at a profit and avoid wash sales for cap gains (not much of a concern for bugs last few years) or if you are not concerned about that, you still don't want to lose your basis if we rally hard.
For most folks that short term positioning on the LT holds is not worth the effort and they are better off holding some LT.
For me, I'm not going to take a 25% shellacking in my LT holds, I'll trust my short term skills and be out within a few percent of that but keep some (how much depends on my ability to guess the % of drop). Adding on at these levels is rather painless for me who rode the pm stocks up from the lows, albeit in and out on the waves, it still amounts to the same or even greater gain, but is insurance against the losses on the drops.
Say we have a big gold rally tomorrow and the HUI jumps 8 or 10 points in a day. I always watch it, even at work (thank God for the webphone) and it's fairly easy to see it start. I'll be there likely within a few points.
If it really looks good, I save my sick days for such occasions and what the heck I'll take a few days off! I did exactly that in September 99. I was positioned near 100% on Sept 24 and added on margin first thing on the 27th catching most of that humdinger of an 18 point one day move(I believe 12 points of it) on margin plus all of it nearly fully invested plus most of the ten points HUI gain the week before. Buying on major supports can really pay off!
That 18+ point one day move was one of the strongest XAU moves of the decade (93 and the 98 move from early Sept lows was nice also), my only regret in handling the 99 one was that options instead of stocks would have turned it into a triple digit one week gain and gold calls were far into the triple digits. Much more risk though of course, I knew one trader who had a bunch of gold calls and had near ten baggers in 99. I pleaded with him to take at least half profits, but he was a neophyte and thought it was 1980 and ended up with a much smaller profit. Big one day moves tend to end quickly, but not always, could always be THE BIG ONE, ggg, even so, I thought taking half profits would have been the way to go.
So that's how I've played it in the past and similar to how I will play the XAU/HUI in the future and perhaps this will explain some of the method to my madness (quick turns in positions) on the thread.
PS, while writing this post I reviewed the daily charts for the last ten years and am more optimistic that we hold at these levels. Not gospel though, ggg.
Best Regards,
Roebear |
