Wednesday, February 23, 2011

Take a Time Out

Take a Time Out
After the quiet of the past few months I guess a little crazy was due for a visit. No, not your old Auntie stopping in, but a schizo market all over the place.

There is so much going on right now I cannot even pick a place to start. Some things to keep in mind for longer term planning:
-FED member Hoenig put to words many of the structural problems now embedded in our system via FED intervention. I know it sounds crazy but at some point the FED will have to exit the markets. What will that look like?
-Saudi Arabia pulls a Bahrain and hands out big cash money to the little people. Uh oh.
-President Obama's speech on the Libya issue was about as weak as could be. Big miss.
-For a two day downdraft the run to Treasuries and the dollar was no place to be found. Write this one down if it is not an outlier going forward.

In the near term I am seeing many either:
-Wanting to really load up and buy the crap out of this dip
-Wanting to get into cash to plow into metals and oil

I was stopped out on all positions for my trading account. COCO (+3.9%), PRSP (+2.3%) and AMRC (-9.6%) are all closed. For my first 8 trades of the year I am 7 wins and one loss. I felt the itch to get involved again tonight, but what I did was take a time out. It was a good idea.

I am a long term gold and silver bull (long physical of both in my core holdings since a long time ago) so you know I am not anti metals. I have traded metals and metal miners for a long time and what I am seeing right now is not jumping out at me as a time to get more involved. Silver plays especially are all hitting the triple top area and only SLV (most closely mirrors physical) has made the big breakout. Gold has lagged silver here for a bit, and plenty of stalwart gold miners are still looking poor to me (KGC for one). In short, metals are harsh and they will break your heart short term. Be careful out there.

Energy as well looks too aggressive and I don't think oil can get to $140 this time. The last run up had the peak credit bubble behind it for gas money, this time no one has a job or home equity.

I do not give investment advice here, clearly! I just offer my take on things. What I am going to do is wait until tomorrow night to do some work on screens based on a couple of scenarios:
-Civil unrest in various places get better, QE3 talk hits the weekend discussion rounds, overall more quite environment
-All hell breaks loose
On Monday I will review market action against what positions I may want to enter and have at it, or maybe not if that makes more sense. I am cautious by nature.

I know, I am not making any real concrete near term prediction here. I simply do not have enough information to do that and I fail to see how anyone else could either in this mess. Offer any ideas in the comments section on what you are thinking about or looking at.

Have a good night.

No comments: