Wednesday, August 24, 2011

Flat indices, metals trashed

6:09 am (Hawaii) Well, this is the other side of my "late" sell of DGP yesterday. I waited until I was down almost $4 from the top to unload my modest position at 68.57. It continued lower into the 67+ area, then came back to 68+ by the close. Today? DGP is struggling to stay above 64, which is the level I re-entered at last week. Glad I'm out.

You can be as bullish on gold as you want, but human nature is what it is. A huge run will lead to profit-taking sooner or later. So I'm fine just sidelining and being prepared for the next timely entry point. I don't mind re-entering a bit late. I just have no interest in jumping back in while the momentum is clearly still downward.

Besides the PM spot prices and ETFs, miners are getting head-slammed. XG is at 9.10, up from its low of the day (8.76). It's down 8.1%. GORO (-7.6%), UBG (-7%), EXK (-6.9%) all at the bottom of my Metals list (19% green, 81% red). AGQ is at 214+, down roughly 36 bucks since Monday. SLW, which had been hawwt, is down 6% to 36.45.

One of my favorite bloggers/traders of all time, StockGuy22, has been short gold since near the top through DZZ, which I tried to trade last week with no fortunate result. DZZ is above 4.60 today. It closed at 4.34 yesterday and opened at the same price, oddly enough. It's up 7.1% to top the Metals list. DUST, ZSL, GLL, DGZ all lead the list.

My Regular watch list is 21% green, 79% red. Quite broad while the indices are all less than 1% down. Not a bullish sign at all following yesterday's 300+ gain in the Dow. This info about $1.5 billion leaving GLD notes that GLD had surpassed SPY as the largest ETF. I saw one analyst mock this event, as if SPY were untouchable. It just felt to me like doubters who mocked AAPL as its market cap began to swell a few years ago.

Gold itself has moved up because of reality, not because of fantasy. It's movements have sometimes reminded me of AAPL, especially the dropdowns after reaching new highs. Swings. The obvious difference is price control via margin hikes, like the one in Shanghai — making it two hikes in one month.

No significant news today. I'm not watching any TV, just surfing the net with a view of the sunrise. There's little point to staying exposed to every bit of white noise until Jackson Hole in two days. Even then, if Helicopter Ben says nothing of essence, I'm fine staying 100% cash. Like AAPL, there are times to wait out the downswing. There are times to sit out before entering the water again. This time with paper gold, it's the latter for me.

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