Friday, November 28, 2008


I entered into a small SLW position on Wednesday as part of my move to build a commodities position. Obama + massive spending projects + bailouts = (long term) buy commodities and short the dollar.

Here's a chart of SLW:

A decent breakout might be in the works as we're starting to bump up against a trend-line from way back in March. My only concern is that this recent run-up has happened during a holiday week, and thus the volume indicators are not following through in support of a rally. You can also see that we've established a double bottom already, and so there should be good support at current price, minus a dollar. Why SLW? No reason really, but it seems like gold might have started to take off without me, so for a larger % gain, I should go with the equity that still has yet to breakout. ABX, GG, AUY, they are all on my watch lists for gold.

A look at the SPY shows that we're about to make a decisive move up or down, once again:

As noted in previous posts, a break above the 84-85 should easily get us to that 61.8% retracement level. We will likely see a test of that price on Monday, and that should dictate the rest of the week, as we will have the big boys back in play with regular volume. Note that we are getting quite a-ways above the 5 DMA, so we may start to see some consolidation early next week between the 90.63 level and its 5 DMA before making a move. We've still got room on stochs before we get into overbought territory, so I'm still waiting to pounce on the next short opportunity.

If we're going higher though, there's a lot of stocks out there that have a lot of room to run- a lot of the techs: GOOG, AAPL, BIDU. Also, the beaten down solars: LDK and STP of note, have more room to run, unlike others like JASO and ENER.

Anyways, I tried to force my last short position and totally payed for it. So,
patience, patience, patience....

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