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  • Tag Archives S

  • So here comes Santa, I think

    Posted on December 14, 2011 by Administrator

    I look at my charts and ask myself the all important question: Am I seeing what I want to see, or am I seeing what is really there?

    First of all, my DZZ is performing nicely and gold is still under accumulation, which means people haven’t caught on that it’s in a sell-off, which means there is a lot more downside to go.

    I believe the dollar is in a double top, which has bullish implications for the SPX.

    Tuesday’s dip in the SPX was, I think, because banks were getting capital ready for Wednesday’s scheduled $8B t-bill auction. I do not think it was in reaction per se to the Fed, which surprised nobody except some fools who were speculating about QE on StockTwits.

    As a part of Operation Twist the Fed will next be buying ~$11B long term bonds, which means liquidity will be coming back into the market. So I expect a bounce today in anticipation. Thurs and Fri, prices will probably be pinned at the point where they hurt the most people, and this would be UP, mind you, because everybody thinks the world is collapsing. So I would say Mr Market is going to pump up and pin itself there so that all the shorts and puts can lose their money.

    After this we would have the Santa Claus rally.

    The Company holds physical silver which is hedged with DZZ, S (why did we buy S?) options, and a very large stake in Jan and Mar GE options. We are 90% invested in GE.

    NTRFI (really fabulous website if you haven’t seen it) http://www.ntfri.com/data/GE.html shows GE in a buy signal. There has been nothing but good news about GE. As per my original plan, I want to liquidate around Dec 27, however this is only 13 days away and is starting to seem unlikely. I might need to hold into Jan. The Jan options I want to liquidate as quickly as possible, of course.

    I may well be crazy, and I make no claims of any real intelligence or sanity N.B., but I see GE consolidating under accumulation (note the huge volume yesterday) just below major resistance at 16.63. I also see /ES and /YM in bull flags.

    One blogger I find interesting is Market Anthropology and he is speculating about a “blow off top” http://www.marketanthropology.com/ and I am mildly inclined to agree. This blow off top would climax around the end of Jan, I think.

    I agree with the ABC pattern analysis on http://chart.ly/ey4mhxm which would again suggest Market Anthropology’s blow off top.

    I believe the positive correlation between gold and the SPX is about to break.

    This entry was posted in dollar, DZZ, GE, gold, S, silver and tagged , , , , . Bookmark the permalink.

  • 14 Nov 11

    Posted on November 14, 2011 by Administrator

    1. Forgot to mention, last Thurs the company bought a small position of S. Value play.

    2. Seeking Alpha reports,

    6:58 AM Goldman Sachs raises its outlook for gold – backed by a scenario of continued low interest rates in the U.S. and support from an ongoing European financial crisis – now seeing prices jumping to $1,760/oz in 3 months and all the way up to $1,930/oz in a year. The firm also boosted its forecast on silver to $29.40/oz for 3-months and $32.20/oz for a one year time frame.

    Hm, Goldman reading my blog? The Company holds a lot of silver.

    3. There has been plenty of good news for GE, for example today Seeking Alpha reports,

    10:09 AM General Electric (GE -0.7%) also gets a piece of the action in Boeing’s (BA +2.5%) big UAE deal, signing a $6B deal to provide engines for the new planes. “Emirates is the largest GE90-115B-powered Boeing 777-300ER operator in the world, and this order further solidifies its commitment to this phenomenal aircraft/engine combination,” GE Aviation chief David Joyce says.

    however GE is currently down amid market volatility.

    4. This European crisis is now starting to seriously irritate me, though I’m playing on a medium-term timeframe and can wait it out.

    This entry was posted in /SI, GE, GLD, gold, S, silver and tagged , , , . Bookmark the permalink.

  • 30 Oct 11

    Posted on October 30, 2011 by Administrator

    1. A problem I have with being bullish on gold right now is that the fear factor is evaporating.

    2. While we can expect a rise in gold because of the drop in the dollar, I’m not sure there is any room for movement above the recent top. This is partly because historically, when real rates go below -3%, the rise in gold tends to plateau.

    3. If we see a real increase in industrial production, silver and platinum would probably be wiser investments, but again, upside potential is not great. And there is the big “if”.

    4. One good thing about gold at the moment is that most investors don’t seem to have realized it’s in an uptrend, or don’t believe it. So now would be a good time for entry.

    5. Gold is expensive, it is not a value play. You can get a lot more bang for your buck buying blue chips. Conclusion: gold’s risk-reward scenario is not favorable.

    6. Added to the Company’s GE Mar options holdings, we how have a very large stake in GE.

    7. On a drop looking at FAS, F, possibly S, AA re-entry. But I don’t think there will be a drop. Gut feeling, sideways movement with an upward bias, or a continuation of the rally. The latter I find more likely.

    This entry was posted in AA, F, GE, gold, platinum, S, silver and tagged , , , , , , . Bookmark the permalink.


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    We are not day traders. We trade options with a 1-3 month window. Our discussion here reflects this.

  • The Cloud

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  • Quotes

    "I'm a great believer in luck, and I find the harder I work the more I have of it." --Thomas Jefferson

    "Markets are constantly in a state of uncertainty and money is made by discounting the obvious and betting on the unexpected." --George Soros

    “The United States debt, foreign and domestic, was the price of liberty.” – Alexander Hamilton, 1790, First Report on the Public Credit

    "There must be a beginning to any great matter, but the continuing unto the end until it be thoroughly finished yields the true glory." --Sir Francis Drake 1587

    "War was where a brave man found his truest sense of life." --Guy G Kay, Lion of Al Rassan

    "No! Try not. Do, or do not. There is no try." ---Yoda

    "Own nothing. Control everything."---John D Rockefeller

    “The game is rigged. But you cannot lose if you don't play.” –The Wire (the reason to play iron condors and butterflies)

    "Capitalism is the legitimate racket of the ruling class." —Al Capone

    "Only those who risk going too far find out how far they can go."---Fringe

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  • Philosophy

    Our basic theory of investing is that markets are chaotic, in that prices are not necessarily an efficient reflection of value; rather, prices of assets depend largely on the emotional reactions of traders who buy and sell them.

    We generally trade options to minimize capital risked. Our primary aim is to preserve our capital. We trade with a 1-3 month window generally; we focus on the macro picture and are not interested in hourly movements or short term trades.

    Opportunities can be found by carefully studying value; by this we mean both undervalued (buy calls) or overvalued (buy puts).

    Psychology is predictable and pattern-based. People are very slow to change. Thus in the markets, history often repeats itself, and the market can be predicted by carefully studying past performance, including correlating the performance of other asset classes or other markets; this is the repetitive geometry of markets. Patterns tend to replicate across or between assets, asset classes, and time frames.

    If everybody on Wall Street is saying something, it's probably wrong. We are contrarians.

    We generally advocate heavily concentrated positions in which we are extremely confident, rather than wide diversification.

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