USGL rockets forward...

Added more to my already established USGL holding today right at the open today ($8.40/shr.); +8% on the day, not too shabby...I plan on selling GG in the morning. The chart just isn't moving like I expected it to. I'll take the small gain. Anyways, here's a link to a good article by Robert Kiyosaki, the author of Rich Dad Poor Dad...

http://finance.yahoo.com/columnist/article/richricher/4795

To the owners of Capital

Very interesting post and comments on Bill Cara's wonderful site...

http://www.billcara.com/archives/2006/05/insider_trading.html#more

Bill's site should be part of everyone's daily reading.

Not a bad day...

Well the getting just got too good for me today. The gold stocks finally worked themselves down to around RSI's of 30 and I was just aching to get in. I looked mid-morning and saw the metals and oils were getting smacked again; USGL was down 15% on no news. Which is ridiculous. Well that was my cue. I bought USGL at $6.21. Well, it's early, but USGL closed at $7.05 up a cool 13.5% from where I bought it. Not bad at all if you ask me. At that rate, I'm going to be richer than Warren Buffett by the end of the year. Well USGL started my spending spree...I bought GG at $28.74 (it ended at $30.17, up a modest 5.0%). I didn't finish with just the metals either. Suncor, one of my "watch list" oil stocks reached an RSI of just a hair above 30 and I decided to pull the trigger. I added SU at $74.62 (it ended at $77.04, up a modest 3.2%). Well I'd like to say that my one day average (really 1/2 a day) gain of 7.2% is well, how do you say...damn impressive. One more year like today and I can buy my boat and sail into the sunset. But, I'm not sure the direction of these stocks quite yet...So, I left some coin in the coffers just in case these puppies comeback some more so the kid can load up. The move down was shockingly quick. I figured it would be a few weeks before these stocks got in my trading range again...it ended up taking little more than a week. The major trend for gold and oil is not dead, even if the overall markets trend is. Bet on it. I suspect Gold at $800+ by year-end and oil to $80 probably before year-end.

Right, Left, Uppercut.

Wow, the Dow was down 214 points, nearly 2%...quite a move. That makes it a cool 4.2% off the high 7 days ago. Core inflation rose above expectations and that's not the worst of it in my opinion. The idea of "core inflation" to me is a joke. It's an idea created by the fed to take out the volatility of goods that everyone and every company has to pay for. People eat and people use oil. Volatility in prices creates problems for fed policy makers. Anyways, I called the knockout punch last week see my post at http://theskinnyreport.blogspot.com/2006/05/spxa-knockout-coming.html

The metals, and most of my current "watch list" stocks, continue to get crushed. PEIX is down 9.2%; it's pullback is getting it close to the 50 day MA as well as an RSI of 50 (normally possible buypoints in LT trends) but I'm sensing continued weakness there as the preceding rally was largely speculative in nature. The gold stocks have continued their slide as well. GG is off 3.8% andUSGL down 1.4%; this despite GLD be down only 0.7%. The GLD's pullback has been very small in comparison to the gold stocks. The fact that the forward price remains strong compared to the gold stocks indicates the markets belief that going forward gold and gold stocks will continue their longer term trend despite the short to intermediate pull back. My normal buy point rules may not apply here since the overall market is so very weak. I'm thinking an RSI of 30-40 will be better than my traditional entry point for the golds and oils.

I'm thinking the Dow could have another 2% to go down this week alone. Please take note of one of the popular explanations of the cause for the 1987 Market Crash per Wikipedia "Another common theory states that the crash was a result of a dispute in monetary policy between the G-7 industrialized nations, in which the United States, wanting to prop up the dollar and restrict inflation,tightened policy faster than the Europeans. The crash, in this view, was caused when the dollar-backed Hong Kong stock exchange collapsed, and this caused a crisis in confidence. Jude Wanniski stated that the crash happened because of the breakup of the Louvre Accord, a monetary pact between theUS, Japan, and Germany to keep currencies stable. Just prior to the crash, Alan Greenspan has said that the dollar would be devalued." Hmmm...this sounds oddly familiar. Do your homework before entering this market. This long bull run for the overall market is over as of last Thursday.

Metal Melt Down

Well today was a very interesting day for the metals. GLD was down 5.2%, SLV down 8.3%. Previous holdings of yours truly were down as follows: GG down 9.7%, CKCM down 5.2%, USGL down 8.1%, and SLW down an astounding 12.7%. Here's what I had to say end of last week. I'd say my timing couldn't have been much better. Anyways, my watch list got pounded pretty hard today and that makes me smile because I know that those stocks will be reaching an accumulation zone in the coming couple of weeks. SU, PTR, PEIX, GG, USGL, SLW, CKCM and ADM all got hit hard. Watch for RSI's below the standard 50 trigger for strong bull markets. The metal stocks specifically were headed down ahead of the gold spot price. So once the GLD gets below 50 it may be time to look back at the metal stocks. Oil has strong support back around $65-$66 and a pull back to that level will likely be a good entry point to the summer oil rush (think Hurricanes, higher demand, and who knows what America will be doing in Iran). Keep this one idea in mind, unless the fundamentals change, the long term trend will continue. For gold and oil that trend is up.

SPX...a knockout coming?

Unbelievable end to the past week in the market. Back to back 120+ point days to the downside. And I'm hear to tell you I think this is just the start of a major pullback for the broad market. I think we could be heading for a knockout punch. The technicals don't look good and the current rally has seemingly had little basis (in my opinion). Interesting to see the government put out the deficit report this week noting that it shrunk. Umm...How? Not to over-exercise my first amendment right, but could this be a little embellishment of the truth by an administration that is well not doing so hot? Anyways, I think we could be seeing the tip of the iceberg here. If you took the time to read the link in the previous post, you'd probably agree the world economy has serious, serious issues. It's going to take a unified, world-wide initiative to stave off serious financial breakdowns in many key markets. Currency markets are in total disarray due to the breakdown of the dollar. Real Estate is slowing in a higher interest rate market. Inflation (oil and energy) are getting nastier looking everyday. So with that knowledge where do we go? I think the following are good ideas: long gold (wait for an RSI around 50 or lower, likely lower given the broad market weakness), long oils (same advice as for gold), short the dollar and the broad market with fairly tight stops. The broad markets have been trading in a tight range for several months now. We are at the very bottom of that range. One more big down day and the trend will be over. So the tight stop will protect any downside risk if the market holds the trend.

Thumbs up: Taylor and Liz Whitehurst (great wedding, great people)

Thumbs down: France (are they serious about wanting to extradite Zacarias Moussaoui)

China, The United States and the Liquidity Issue

Very good article about the liquidity issue China could face if they allow their currency to appreciate...

http://www.bepress.com/cgi/viewcontent.cgi?context=ev&article=1131&date=&mt=MTE0NzM3NzI4MA%3D%3D&access_ok_form=Processing...

I'm out, for now

Well the market has gotten ahead of itself if you ask me so I spent the last few days exiting positions. Here's a recap...sold USGL at $9.10 for a one month gain of 11%, sold GG for $39.02 for a 7 month, 93% return, I also sold SLW for the same price I bought it and sold CKCM for a quick 11% loss. I think the long term trend for gold is higher but I just wanted to take it off the table and take some gains while I know its over extended (GLD's RSI is around 80). That's not to say that events couldn't drive the price higher in the short and intermediate term. I just think its more likely that gold pulls back closer (maybe not all the way to) its 50 day MA. I'll be looking for entry positions in the oils and gold in the next month or two. As for other ideas...PEIX has been out of this world and I wish I would have bought it when I started following it about two months ago when it was sitting at nice price of about $19. Two months later its at $40 and I'm playing the what if card. You win some you lose some. I didn't want to chase and the stock didn't want to come back for me. I'll live to try again. I currently own no stocks, which is scary and kind of annoying. This a point where bad traders get antsy and make a mistake chasing something. I'll wait and find the right opportunity.

Tomorrow one of my good friends is getting married. The first of my close circle of friends. It should be a great time. I wish Taylor and Liz the best. Cheers.

Click Commerce rebound?

One of my favorite young companies, Click Commerce, is announcing earnings this week. The stock, in my opinion, is significantly undervalued from a fundamental standpoint. The have grown earnings consistently over the last 2 years and have established themselves as a powerful name in RFID technology (check out the client listing at www.clickcommerce.com). Earnings have tended to be on the high side of expectations; however, the stock has sold off since early February. I'm thinking earnings could be on the high side again, and with the recent sell off, this presents a potentially nice buying point. From a technical standpoint the stock is trading below its 50 day MA. I'd like to see it break through that prior to earnings to give it some technical strength. I'll keep track of this one; buypoint is friday's close of $22.57. Keep a nice tight 7.5% stop loss on it.
Gold had another strong week. The pullback is coming, more when then if. I'm waiting for another entry point. I'd love to load up on some more USGL at an RSI below 50. Looking forward to the discussion at the FOMC on Wednesday.