Originally Posted by
Dr. Dave
Hey guys, market is pretty ugly. As you can see, I'm not holding much... can't really count spng, since it's worthless, and I have to call in to sell it, can't do it online, but I only have like $7 worth anymore, as I had sold out most a long time ago.
Leaves me with 2 gold stocks.
If you look at gold stocks, and gold trading, it rides little waves. For normal stocks, I buy on breakouts out of patterns, ie. when there is a big move up on volume. For gold stocks, you try to see the overall intermediate/long term pattern but play the dips.
I bought AUY and NSU on a couple of dips, but rather than swinging out, I was hoping for another dip and a further move up. So right now, I'm down a couple percent today, as gold futures pulled back to the 34 ema.
So far it bounced off of that line, now looking for a reversal candle. At this point, the chart is a little predictable, so not sure if we'll get another rally here or not. So, keeping my stops pretty tight. Last time the GC (gold futures) pulled back to this level, there was the same type of volume, and a pretty good bounce. Entry would be after some reversal candles, and the first sign of moving up.
But in all honesty, the market is really tricky, and I'm pretty bearish. Germany I guess put in a halt on short selling some stocks. This removes liquidity, and as one of the guys I followed pointed out, when the US did it around the week of sept 15-22, when the sp500 (please look at a chart here) was at about 1200, it rallied for about a day or two to 1250... from there the market hit it's supreme downtrend to the 600's. You remove liquidity and the ability for people to trade one way, and also introduce fear into the market - ie. things are so bad, we have to ban short selling, then the smart money is left with the option of getting out of their longs (or go long, but who would do that after all these gains and with all the volatility).
Therefore, for me, I'm just basically kind of sitting out.
Regarding penny stocks, these of course aren't really linked to general market action, but I've also heard that buying has subsided a little - but who knows how credible that is, in pennies.
Right now, there is a decent bounce of off some fibs for the GDX (gold miners) and $HUI (gold bug index), so I'm looking to hold one more day.
Anyway, in 2008, I didn't have the market awareness that I do now, and that year hurt me, until I learned more on how to play with the general direction, and then I recovered in terms of trading stocks, hurt myself a little more with options, lol. But this time, I'm just sitting out, I won't really be going long any stocks. Maybe an odd OTCBB swing trade or a penny here and there, but with very small positions. That and keeping a close eye on these gold stocks.
It's easier when there is a less volatile trend going. When it's all crazy, I'd rather sit out.
Sure, there will be massive rallies, and such, but I'm not confident in my ability to time them at this moment, and also, I have a different trading style than you guys... our styles are different, so the way to play is different. Anyway, all the indicators that I use for the general market are bearish at the moment.