Monday, June 20, 2011

QUIT DIGGING


What do you tell some one that is on the wrong side of a trade and keeps adding to his position. Often time a trader is so sure of his fundamental and/or technical analysis that they violate their own predetermined trading rules to try and "make it fit".

If for instance one has determined that the major support for an index that they have a position in is violated they know that a danger zone now exists. They could sell their positions or at least a significant percentage and wait to see if there is buying volume and the stocks cross back over to confirm the broken support as resistance once again. Unfortunately many traders refuse to believe what they are seeing on the charts and try to add to their positions to try and catch a bounce at these levels. After all how can it not go up after it has corrected over 25%. Well we all know the answer to that question, yet many retail traders make these same decisions over and over.

We are in one of junctures right now. Many of the miners that we have been playing such as SLW SSRI GPL ANV etc. have corrected as much as 40%. Those are bear market numbers...so one must take notice. Is this an attempt just to push you out of your shares on a short term basis or is this a much larger correction coming for the miners. I happen to believe that we are nearing a bottom in the miners that will at least provide you a nice trade. On the other hand I am not willing to bet the kitchen sink on it. I established a trading core about a month ago and have tried to trade around it with limited success. After taking a beating on the core for the past several weeks I am not going to chase the miners until the boyz show they are ready to shut down their short position. Until we see evidence of miners performing better on overall down market days with volume confirmation (like GPL and PZG lately) then it is best to stand clear and wait with your precious fiat. Would I try day trades on paricularly bloody days on individual miners? Of course. GPL was an excellent example of that a few days ago when it touched 2.55 again. That was a very profitable trade. On the other hand longer positions just show continued leakage and catching a falling knife right now may apply.

If you are all cash and are not a quick trader in front of a computer then establishing a core now may make some sense. Otherwise we may still have a little more blood in the streets to be established in the miners before the trade resumes.

Physical is to be bought now however and that is not debatable. gl all

This chart is a must look...look at friday's volume confirmation at the turn off the 200ma


So is something brewing?

15 comments:

  1. SLW at 30 held which means for the scalpers provided nice day trade, since bounce is around $1, thank you SLW once gain, heheeeeee!

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  2. Reading Nancy's comments yesterday...

    http://www.zerohedge.com/article/dodd-frank-precious-metal-trading-prohibition-could-make-hedge-fund-fx-trading-illegal

    http://www.zerohedge.com/article/cmc-provides-update-why-it-halting-gold-and-silver-futures-products

    I think I liked those jokers (Dodd-Frank) better when they were doing nothing. Okay, maybe not, had they and others been doing their job we might have avoided some of this mess.

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  3. In regards to yesterday's tech comments including red's cheery remarks...

    http://content.usatoday.com/communities/technologylive/post/2011/06/lulzsec-anonymous-declare-war-against-governments-corporations/1

    Is more government control coming our way? National/Internaitional?

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  4. In case there is any confusion on the ANV chart......I like it!

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  5. Sorry guys.....computer on the fritz today...Happy belated Fathers day to all.....Joe, I see RNN has much activity...whats the tape looking like?

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  6. I guess this is one of those technological advances spoke about yesterday that will render humans irrelevant. Our National Priorities are in order........

    http://www.nytimes.com/2011/06/20/world/20drones.html?ref=technology

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  7. SVM is doing nicely today due to following:

    http://finance.yahoo.com/news/Silvercorp-Announces-Share-iw-1254295096.html?x=0&.v=1

    http://finance.yahoo.com/q/ks?s=SVM

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  8. $hui update: http://swingcycles.blogspot.com/2011/06/hui-gold-bug-index-06-21-2011.html

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  9. GORO should have bottomed since I sold my last shares today @25.45 ;). Maybe I'll get the chance to buy back, but am trying to raise cash here due to not seeing s&p holding above 1300 for now, maybe not ever even in spite of qe3...guess we'll see. Not certain what the fx spot ban and cmc futures ban mean, don't even trust what was said by the Australian spokeswoman. Imagine that!

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  10. In regard to Gold miners, keep your eye on RIC!

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  11. chart looks like virtually every other miner .....so when's it gonna pop is the question....does have a low float

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  12. unable to look at its main holders.....

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  13. RIC volume very low on slight down day...

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  14. All,

    I like the float/outstanding shares on RIC which is low and that tells me the CEO is not in the business of diluting and printing shares, the company is profitable and here is more detail on their Gold from street.com, if it drops another 10% to 20% from current price due to Gold retracing or manipulation then I will be on it, if I see volume pick up on daily then I won't hesitate:

    http://www.thestreet.com/_yahoo/story/11158348/1/8-mining-stocks-to-watch.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

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  15. http://finance.yahoo.com/q/pr?s=RIC+Profile

    http://finance.yahoo.com/q/ks?s=RIC

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