Sunday, January 25, 2009
So GOLD is showing its Bling, and Crude is threatening a 50% rally. Oh yes I forgot, the US Dollar is rallying and the Stock Market is threatening a Serious Bear Market Rally.
The only thing I can take from this is that, as usual, In Extremus, the tide flowed out of assets and into cash in such measure as to leave treasures stranded high and dry for all to reach. Those wanting it will hold back fearing the ominious ultra low tide before a tsnumami, but the bold ones will get some treasure. Ultimately the crowd will go in and get its share, and just as invevitably, the tide will come back in, but probably not in the measure of a tsunami, not just yet.
I will not be telling the market what to do, but I will be observing the tide and setting my craft to rides its gyrations. Fashion your craft accordingly, tie your lashes carefully, make sure your craft is properly trimmed and balanced.
My job here is to help people stay on the correct side of the markets action.
This bear market rally aside, and any rise in commodities not withstanding, have you considered what you will do next >? Position planning, just like position in playing billards is part of a successful operators DD & HW ! ! !
FHC is a thin stock. Face it, most of these stocks qualify for the Motley Fooll Test, Ignored, Unknown, and undervalued [ paraphrase ]. THEORETICALLY it should go lower, but getting it lower is another thing altogether. IMO, $3.75 is nice for FHC
MAG Silver [ MVG ] playing mouse hockey with Fresnillio's UNDERBID Offer of $4.54. IT feels as if Fresnillo has had a STUPID ATTACK, worsened with a case of arrogance. I guess the only antidote is a falling silver price, from Fresnillo's point of view, but that is not in the cards now, IMO. If I was buying more, I'd be happy in the $5.00 - $5.50 range. So far this is the only Listed Silver Stock with decent market action. The majors, range from the slightly winged to the walking wounded, to the totally crippled. I am happy with my MVG in the $5.00 - $5.50 range./>/> Onward
GORO - well accolades all around to these guys. The only thing they could do better is get the stock listed. Here I am trying to buy the stock around $3.00.
Good Luck to ME !! LOL. OK for real, if your an optimist, you could place a LIMIT BUY order in around $3.25-$3.50, and you might get some.
ROGERS SUGAR TSX -RSI/Un.to, on Stockcharts, RSI.un on the exchange. RSGUF in US
Pink Sheets. Totally tight, together and boring. Also thinly traded. Just keeps adding a few cents a day in basic trading. Boring dividend. Loonie keeps hoping all over, and makes it hard to buy. Bids for RSGUF now might work in the U$D area of $ 3.25-3.50. I'd hate to see how hard this is to buy at these levels if the Loonie starts moving up. As basic as a food stock can get, RSGUF is part AG, part Commodity Stock, part Food stock, and oh yes pays the US annual equivalent of 9.5%, paid monthly. Totally boring !
DHT Marine. Double Hulled Tankers, owned in part by OSG, but operating not as a subsidiary. Double Hulled Tankers and SuezMax vessels, all leased to guess who?
Its div yield makes it hard to buy, 19 % at these levels. I'd be trying for $6.00 or
so, maybe $6.25. Lots of people want this stock, so its a boomerang, but strong.
So the quandary we find ourselves in is this : Do we use Momentum Tactics to get aboard strong stocks, or do we bottom fish right at support ? Well, you decide.
Me, I set some limit orders a little ways off the bottom, because when they hit support, they arent usually there very long or for very much volume, in the case of a strongly trended stock, so only a couple of lots change hands there. IMO, its better to be a couple notches higher and get the stock if the trend is strong. If you think the trend is weakening, then you can go lower with your order with more confidence. The numbers I threw out there in this post, are a bit higher than rock bottom support, and the kind of bid I have used to capture strongly trended stocks such as those listed. Whatever you do, DYODD & DYOHW.
Well, What we DONT have here is a failure to communicate, ala "Cool Hand Luke".
After spending some time running a series of technical scans, I came up with 11
stocks [ I thought it was 20 but some Old Favorites showed up], that showed a few
characteristics that I thought you'd be interested in observing.
The first characteristic is a breakout,
The second is staying in breakout mode,
The third is being close to support,
The fourth is having upside room to run,
and the Fifth, is developing the momentum to make that run.
We will cover the old favorites seperately.
VAALCO ENERGY > EGY has options
TALISMAN ENERGY > TLM has options
KINROSS GOLD CORP > KGC has options & wts.
GERDAU AMERISTEEL > GNA has options
NORTH AMER. GALVANIZING > NGA
MINEFINDERS > MFN has options
OVERHILL FARMS > OFI
BLOUNT INC > BLT has options
HEWLETT-PACKARD-COMPAQ > HPQ has options
NAT'L SEMICONDUCTOR > NSM has options
ADAMS-MIDLAND-ARCHER > ADM has options
So this group includes ENERGY, GOLD, STEEL & METALS, CONSUMER, TECH & AG.
I did NOT analyze them by sectors, but if you go here http://stockcharts.com/
and put up the GALLERY CHART, scroll to the second chart from the bottom :
which appears at the TOP of this page. Please note the BOTTOM panel in this chart, which matches the stock in question against the S&P 500, which roughly speaking, plots the RELATIVE STRENGTH of the stock in question. Dont hesitate to plug in all or any of the symbols that interest you in the GALLERY chart [ or any other for that matter, that suits you ], and make your observations, thats part of your DYODD & DYOHW.
OUR accounts seldom buy market orders except under two conditions : The stock is a hard one to buy, and we see some price weakness > BINGO, we enter a market order.
The second is where we have a tailing stop in place that is HIT on the Brokers in-house computer, and sent to the trading floor as a MARKET SELL. Other than that,
we attempt to define the support levels, by observing the charts, and enter a LIMIT BUY ORDER at such and such a price OR LESS.
Part of your HOMEWORK is to attempt to define SUPPORT LEVELS and then find a likely level of the stock, somewhere around support WHERE YOU CAN ACQUIRE SOME if you think it prudent to do so.
Please think this thru carefully, do not act in haste, but once in motion, act decisively as IMO, this will be a Bear Market Rally, no matter how long or short.
Should I be wrong, you at least will be on the correct side of the action.
There, enjoy. The next post will cover some old favorites we have been buying and selling since the Oct/Nov Bottom for our INVESTMENT EDUCATION SIMULATION PORTFOLIO.