Wednesday, December 31, 2008

Taking Stock: Say ... ahhhhhh ...

Just so you know, at the moment I am chanting in my head, "Break out!! Break out!! Break out!!". From my perspective, the wedge that has been forming is a BULLISH wedge, not a bearish one, you just have to adjust your trend lines a little bit. It now appears as though the market might break across the 50DMA and break out to the upside. I would love to see the bear market rally that I have been impatiently waiting for, the market going to the 200DMA. I'll look for my precious metals stocks to move to at least the 200DMA, and maybe some others. There needs to be more volume, though.

With that in mind, I actually looked at my account, and thought, "Wow, I still have some cash on the side? Let me fix that ...".

I'm still watching the Baltic Dry Index (BDI) for it to find support in the 50DMA, and then start to move higher. If it does, then Dry Bulk shippers should be a good trade. The BDI is an index of the spot market prices for dry bulk shipping, so dry bulk shipping tends to track the BDI.

I also noticed that oil prices are at least stabilizing, if not starting to move higher. I would like it to be out of sync with precious metals, which it looks as though it will do that.

In a twist of fate, my Axsys Technologies(AXYS) stop loss order did not go through. It is now moving higher.

Monday, December 29, 2008

Taking Stock: My New Wish

Working on wishes and prayers is not a good trading strategy, but I'll try it anyway.

My new wish, albeit that China is truly back in action, is to see the Baltic Dry Index find support on the 20DMA and start to move higher again. The BDI is the index to watch when trading Dry Bulk shippers, and demand from China can be a definite aid in driving the spot shipping prices higher.

From an armchair perspective, it seems as though gasoline prices have stabilized. I would actually like to see them start to move higher, which they more than likely will soon enough. Like Dan Fitzpatrick mentioned, the price of oil will definitely not go to $0. It is only a matter of time before the price of oil starts to move higher again.

From what I have read, and other observations, the stock market does not wait for the actual economy to turn around, it only waits for the conditions to be in place for it to turn around. From what I see, the stock market has already started to turn.

I'm still heavy in gold and silver, which has been moving higher lately. I'm quite sure that I have mentioned that I added to my gold and silver positions a month or so ago, which I'll trim back soon enough. It looks as though I will get one of the things that I wanted, because my energy stocks are lagging behind precious metals in turning around. I like that, because it will let me trim back precious metals after they have run for a little while, and roll it over to energy.

I still have my position in the infamous Crystallex (KRY). The way I see it, one of two things will happen with that saga:

1.) Crystallex & Rusoro will split the mine
2.) Crystallex & CVG will split the mine

Hugo Chavez has a personal problem with Tejera Paris, a UN Ambassador, having an association with Crystallex. What Hugo wants is for gold mining companies to go to a 50/50 Socialist Joint Venture model, which I am now betting that Crystallex will go along with. I had a feeling that Chavez wanted something, which I figured it was to have someone else operate the mine while he collects a portion of the gold. If Chavez really wanted to kick Crystallex out, then he probobly would have done it by now.

I had to sell my Axsys Technologies (AXYS), since it is breaking down, and I have no idea for as to if it will ever turn around. With energy and other commodities, we are in a multi-year cycle for hard assets. Energy trades with the CRB and the price of oil.

According to Stephen Leeb, and Dan Fitzpatrick has also mentioned it, there is a substantial amount of money sitting on the sidelines in Treasuries and the Stimulus packages. It comes out to being around $4T that could come flowing into the economy.

Friday, December 19, 2008

Taking Stock: I Noticed

Something that I have noticed lately is the trend changes and reversals in some stocks, or at least starting to change, for instance:

Transocean (RIG) - the 20DMA has been flattening out
Ultra Petroleum (UPL) - the same condition as Transocean

Yamana Gold (AUY) - trend reversal. It appears to have broken resistance through the 20DMA and has now found support on it as it begins to move higher.

Pan American Silver (PAAS) - the same as Yamana, and quite possibly for NovaGold (NG)

On a somewhat twisted note, depending on your perspective, I am looking forward to when inflation sets in, and commodity prices go higher.

I'm thinking that there will be a rally soon enough, but probobly only a bear market rally.

Tuesday, December 16, 2008

Taking Stock: Ah-Ha!

Down goes the dollar, and down goes the Fed Funds rate. If that is not a good recipe for higher precious metals prices (gold & silver), then I don't know what is.

I found out what has been driving NovaGold (NG). They apparently are going to be able to make the bridge loan that they were having difficulties with. Now, what I would like to hear, is they get the final permit issued for the Rock Creek mine that they had operational. It is still a potential good trade, but with a good stop loss of course.

It looks as though the Baltic Dry Index is going to go higher. Even if it is not true yet, I'll say it in advance anyway. Welcome back, China. We missed you, at least I did.

Maybe now commodities and the CRB will start to go higher again also.

Monday, December 15, 2008

Taking Stock: The Events That I Have Been Waiting For

The Dollar is falling, and the price of Silver and Gold is in rally mode. The price of oil has not increased at the rate that I would like, (no offense to those enjoying the price of gasoline lately) but it more than likely will soon enough. I'd like to see the precious metals mining stocks rally out of sync with the energy stocks, so that I can take advantage of it. In that case, I could trim back my gold and silver mining stocks, and roll it over into energy (I secretly wished for that to happen several months ago).

Somehing that is baffling me, along with several other people, at the moment is just exactly what is going on with NovaGold. Why the rally? I'll keep my eye on that one.

Check out the steel producers index(es) along with the China's stock market indexes. The Baltic Dry Index (BDI) has also been inching up. Welcome back China?

Wednesday, December 10, 2008

Taking Stock: A Quick Note

If, by some chance, you got in on the Eagle Bulk (EGLE) or Excel Maritime (EXM)on my behalf ...

Congratulations, and you are welcome. I quite honestly was not really expecting that much of a run to happen so quickly! Wow! I primarily had the yield in mind, and was taking into consideration that the economy (namely China) will turn around soon enough (I was thinking several months from now). For example, DryShips went from ~$4 per share to almost $11 per share.

11/4 = ??

I'm still in the camp of getting a major market rally soon. My first thought when I heard that the NBER had announced that we were in a recession was "Wow, maybe now the market will turn around and go higher for a little while, at least a bear market rally". We shall see.

One of the things that I have noticed with stocks is that the majority of them have a tendency to follow a very similar pattern to the broad market. Not necessarily an exact pattern, but very close. That is probobly why quite a few people trade the S&P 500 indexes rather than individual stocks.