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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (31586)	7/27/2003 12:05:46 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 36161

misheldo re: ["You said this all the way down and were right but of what use? No buy call anywhere close to the bottom"] Misheldo; there are many ways to trade...and the foundation of what has best worked for me in commodity cyclicals is to leverage the early cycle bottom formation and then the inevitable initial pullback's & trading ranges...and then to exit as the underlying fundamentals & trader sentiment peak....and then NOT re-entering long on the later cycle Higher Risk/Lower Reward pullbacks...but, to rather patiently lie in wait for the time to go short at cycle rollover and make money on the downside cycle as well. For my trading plan...there was not an adequate risk to reward environment to "buy" this late cycle pullback...and very rarely will there be late cycle in commodity cyclicals. "THE" bottom that mattered the most was THE bottom...back at HUI 35-40 that formed in Q4 2000. The only High Reward/Low-Moderate Risk bottoms were the initial violent rollover back in July/August 2002 where the HUI violently contracted nearly 60 points in days/weeks to the July low's of HUI 98...then the Oct 2002 pullback to HUI 115 into still strong underlying positive catalysts for Gold. This most recent bottom of 115ish in March was not attractive to me on the longside...but, this rally here is attractive to me... on the shortside. Everyone should have a trading plan and plans should be flexible by design as the market is not static, but rather dynamic. But, when things are going according to one's plan; there is no reason to deviate from it, or to fix what "ain't" broke... that's why this pullback held zero attraction to me for a longsided re-entry...and it also wasn't a particulary attractive level to short either. One doesn't have to always "be in" the market and it's imbecilic to try to trade each and every twist & turn of a cycle...and only fools, stock-casino addicts and amateurs try... When cyclical transitions occur - where the odds of Rewards diminish directly into ramping Risk - I prefer to step aside...and that is how I read this most recent pullback in March. BUT ! - now this rally has changed things. NOW, imho; the Risk to Reward ratio's have morphed to High Reward/Low-Moderate Risk on the Short Side...as 4 of the 5 primary catalysts for rising goldstocks have diminished and only the "temporary" catalyst of a So African Miner's strike and what I view as irrational expectations of significant, or runaway inflation are propelling goldstocks here. The time for cyclical rollover has "perhaps" arrived & at the least; the opportunity for an attractive short-sided trade has ... As always; we shall all just have to wait & see.