Talking Up The Dollar

Just when you thought it was safe to jump back in the pool the dollar bulls come alive and down goes gold in a major dump as the greenback squeeze and dollar bull calls coming from far and wide. I have to admit I was deked out some by golds bottoming action then up move and thought we had the possibility to at least hold the $1100 area but that looks to be a dicey proposition.

After a $120 dump on gold the spec longs are going to be very weakened and if there is any serious "intervention" to dump gold further then now is the time before it can gain some strength. There is alot of shorts who will take profits before year end which exasberates the problem. I am returning to my mid $1050 - $1075 call from a week back. It may still take several days to play out as once again gold is back up $9 overseas.

One important item is some of the juniors are holding in well and not getting totally wiped out as usual in a correction like today. That will bode well as major money can still be made mining at $1000 gold and $16 silver. Part of cause of this action was todays jobs numbers so called "disapointment" of 7000 more jobs lost. Are we talking McDonald's burger flippers here or what ?

On top of that Bernake claims no chance of interest rate hikes anytime soon yet more Fed related types are verbally warning they could go up sooner than expected. Yes we have heard that before too many times the past month with no effect but now it matters ? Unless it is a major move in one shot, a 25 basis point raise will have a short lived effect on the US dollar. There is too much paper out there and todays action is a sign of the "talking it up" effect by the FED to keep the dollar from tanking. Signs of desperation to me.

Trader Psychology

One of the hardest parts of trading or investing is keeping our emotions in check when buying and even moreso when selling. I can easily still find myself sitting on a winner knowing I should take profit then watch it fritter away back to ground zero where then that trader now reluctantly becomes a long term holder.

Nothing worse than new found enthusiasm being quickly eroded into complacency and false reasoning why it's a home run, only to possibly end up even losing on what was originally a winning trade. Happens to the best of us, that is why I am way more focused now on keeping the emotional side at bay and clicking that mouse when the time is right. ?

But how ? Practice, plain and simple. Make paper trades hundreds of times,even if you just keep a mental scorecard. Drilling home that mental AND verbal command to hit the sell button and then give yourself kudos for pulling it off. It is critical to changing the mindset that you are going to miss out on even more profit which most time you don't. Reward yourself right after with a treat,beer,Canucks tickets or whatever. Sounds like animal training doesn't it ? :)

Practicing is critical if you want to be an active/short term trader,theres no time to waste humming and hawwing. You have to almost take a piece of paper and tape it to your monitor that says " Why The Hell Am I Even Here ? To Take PROFIT !!! " You may find that helps, it does for me.

When we get into these kinds of markets where we are basically flatlining/range trading, it is a good idea to use a couple valuable sites to keep you mentally in the game but not destroy you with information overload. The site I go to in times like these is who I refer to as The Godfather of Trading Psychology, Dr. Brett Steenbarger. The guy is frigging incredible and it is all free. The man is a trading psych machine who provides tons of charts and insight you will find no where else. You will find him at http://traderfeed.blogspot.com . He's on Twitter as well.

The second site I like to go to is Bernie Schaeffer's site for his weekly commentary which never ceases to amaze me on how bang on this guy is with his market insight. When the herd is leaning one way, he will lean the other but back it up the other with facts and stats that are so easy to understand. He has helped me many times when I see uncharted waters ahead. He's at http://schaeffersresearch.com/ .


Hope you find those two sites helpful as education is the key to making money and I love to help others make some cash as well as have some fun at the same time.

Cheers !

Dear Santa...

Coming into the last full week before the markets shut down to a crawl, I have a request for Santa for one last favor for the year....now get your mind out of the gutter. One last push up would be reassuring to the masses that yes, Obama and the boys at Goldman are still running things and they could care less how high gold goes. Sounds like a reasonable request doesn't it ?

We have gold up a ten spot tonite, and the markets overseas flatlining as the US dollar takes a step back. Tomorrow will be interesting to see what happens to the dollar and if the latest rise really has legs. I won't rule out some more volatility but we are due for a bounce here, my indicators show a short term bottom. C'mon Santa, just one more kick at the can.

Uptrend Intact

Came across this excellent gold chart that shows us that as long as we stay above the 50 Day Moving Average at $1099, we will be in fine shape. The Fast Stochastics is looking good and has formed a nice bottom.

I never used TA charts as much til after last years melt down. I am now of the mindset that more money can be made by playing the overbought and oversold TA peaks and valleys than to try and time the moves on basic fundementals alone. Note: I am referring to blue chip stocks with a healthy and steady volumes that gives the chart a true read.

Thinly traded juniors (like what I talk about mainly on here) are a different beast entirely ,and company news events/financings etc is what influences their cycles. Charts are reliable on them when there are breakouts after long periods of dead action.

When I look at the S&P 500 SPY chart I see a choppy range trade that looks very scary yet could burst higher in the new year but that will depend on company earnings. When I look at the gold chart above I can see a decicive line in the sand that helps me make crucial decisions that may ulitmately effect my junior picks as well as any blue chips or options trading.


You can't discount these crucial lines in the sand as all the hedge funds and institutions almost solely rely on them these days more than any other time I can recall. Propriarty trading firms amd black box institutions trading desks live or die by TA charts. It is a must to learn the basic skills and not rely on the latest stock picking site that seem to be popping up on Twitter and Facebook like a bad disease.

My concern with the gold chart is if that $1099 level is busted,what does it say about the state of the DOW and other world markets ? Will the US dollar shoot back like a rocket if this number is broken ? I would bet it would as the flood of dollar shorts covering will be frigging massive. Now is the time to watch the charts closer than ever but I don't expect the risk factor to rise til after Christmas.

On the bright side, the GLD chart I posted last night is showing very close to a bottom so if gold bounces nicely off this critical level, then the precious metals and the metals stocks may be ready to both launch into the next power upwave and take out the old $1220's high and that indeed would be sweet !

Short Term Bottom ?

Today's whipsaw action in gold was most interesting. On one hand it was looking like maybe we had hit a short term bottom with gold up $17 plus at one point. One click later at mid morning and gold was back to even, then down $15. That was quite the drop, a $32 swing, and I have never really found out what was the exact reason but the US dollar did not seem to move any serious amount to effect this.

On the other hand the XAU index was up all day and the metals stocks showed some good strength. This is an important signal if we are to be in a short term bottoming process. As per the chart above for the GLD ETF, the signals are nearing bottom in the next few days. I like to use the 3 month Stockscores chart as it has been very reliable in most cases, especially when looking for overbought and oversold conditions.

With Christmas on the horizon and a slowing market, we'll be bound to have some more profit taking and weaker bids so I won't rule out a couple of more shots to the downside here. Remember that the metals stocks and the metal itself don't always move in tandem but movement in the stocks first after a pullback is a very positive event but it is just one day so don't go all in at first spike.

It Was 29 Years Ago Today...

Hard to imagine that today is 29 years since John Lennon was mercilessly gunned down and not a year goes by where one wonders what magic we were denied. The possibilities are endless when you let your mind wander. You can bet he would have continued to be an outspoken person against war and many other injustices in the world as well as creating more timeless music. Always a moment that I remember where I was when the news broke. Not many people other than one's immediate family have that kind of power to most of my generation these days.


On to the markets. The gold correction continued in spades today closing down another $28 breaking thru the $1135 first support area. There is no doubt the shine is off the metals bull but I did notice some of the popular junior stocks are holding up fairly well with some closing up today albeit in the few perentage points and that could change if gold keeps getting pounded.

The GLD chart tells me we have a few more days to go still before it bottoms out and builds for another run. With Christmas coming I doubt we will get much of a rally off the bottom with the market thinning out on the risk taking long specs.


The fundementals and the technicals need to come back into alignment as this was just too much too fast. In the meantime, sit back, play some Lennon tunes,chill out, and stay warm, this precious metals bull has a very long way to run and lots of money to be made.

Gold Bear Coffee Break ?

My prediction of a nasty follow through started out looking bang on til someone named Bernake opened his mouth and as usual things started going the other way. With gold down $24 bucks, our market savior teased us with more comments on no interest rate hikes anytime soon, and an improving economy is upon us. It's these kinds of events one cannot predict and gold responded by rallying to down only a $1 before closing down in the $5 range.

Is this it for the gold/silver correction ? I am not convinced yet, though gold is up over $7 tonite. We still had one big nasty sell signal on Friday with record volume on the GLD and today being another down day. So before the charts can give us a new buy signal we will have to see a nice $20 plus gain to bring back the spec players who will be very cautious after Friday's power dump.

I hope to bring some new trade ideas to the blog soon in the blue chips as we move into a possible Santa rally next week. If this fails to materialize, I will be adding some of these ideas into the new year for sure, as well as my current penny plays and some daily top trader as a possibility too. Be cautious out there !

Golden Bear is Lurking

Friday's crushing of gold and silver answered the proverbial question of "when will this bull run cool off ? ". Well it's here in my opinion but is a much needed pause to allow things to settle down while the dollar shorts cover their winnings then wait to reload for the next step down.

As we speak the markets are open overseas and gold is down $9 which tells me tomorrow is day 2 of a possible 3-4 day nasty correction. Considering the record levels of shorts I will bet that somewhere in the range of mid to upper $1050 range could be the true bottom. It's always quicker on the down side than the up and what we have witnessed the past couple of weeks is not usual behavior and the long specs are going to get killed as they always do buying at the top.

So in other words "everyone out of the pool". I am bullish long term for gold and silver but the higher we go, the more volataile the swings will be so we best get used to it and watch those stocks that are able to withstand the selling.

I would much rather be a bear in the woods than a "tiger" these days anyhow. ;)

Tax Loss Presents

As much as the markets are flying high, not all stocks are following suit due to various reasons in their development cycle. Thus they can be victim of the notorius tax loss selling season and provide some true gifts to the nimble investor.

Those who are impatient sell and take the loss/gain or just need the bucks to pay for Christmas. They're also selling with the intention/hope to buy them back after the 30 day selling rule for the same price or less. I look for stocks that won't be on sale long and the New Year will bring news flow to their sectors, primarily the precious metals sector and the junior tech/biotechs that meet my criteria.

Below is a list of stocks that "may" be in a position in the next 30 days to pick up on sale and make a nice present for one's portfolio.

Note: I may or may not own shares of these companies and may trade in and out so please don't take my list as investment advice and do your own DD as I am not responsible for any of your decisions, they are yours alone.



#1 AHC - Artha Resources, naturally my number one favorite precious metals stock. Not sure how much cheaper it will be getting in here as today there was some true gifts in the 16 range. I see stocks with less trading for 2-3 times right now so this is a steal where it is.


#2 EMG - EmerGeo Solutions has already been on sale the last few months but I expect better things in the New Year. Yesterday their financials came out with a 100% revenue increase to over $1 million for the quarter and margins rising to 36%. A specialty emergency disaster software company with explosive potential for 2010, it's been a long time coming.


#3 CA - accumulating land in Colombia near VEN but a bit expensive for where it is in it's exploration cycle. I would be buying in the low 30's,can trade a little thin so use the stink bid.


#4 TNG - software gaming deal with Intel, say no more. Anything back in the 70's would be a deal.


#5 PRX - a prostate drug for those dudes with BPH. I am hearing good things on this one and looks like it could be big if the next results prove up. Bio's are always highly risky but they seem to on the right path. Anything back to the upper 50's to low 60's would be a good spot to focus on.



Don't forget to use the major markets as your guide before diving in,they can be a bigger cause of selling than just for tax loss reasons.

Happy shopping !