Gold scores a minor Victory 8/26/12

Gold has been going sideways in a triangle for 3 months now and finally broke out of the triangle heading upwards, scoring a minor victory. See the chart below where I drew in the green upper triangle line and the red lower triangle line. If it had broken to the downside, that would not have bode well for Gold buffs.

As it stands, GLD is now bumping up against another resistance level shown by the blue bold line touching the tops of a larger triangle. For now I am on the long side of GLD and saw a modest increase in my holdings.  See the entry signal. It had been a little confused before and had been consolidating.

The contrary picture is of course the US Dollar. As GLD has gained strength, the dollar has weakened, This is the Yin Yang of currencies - a strong negative correlation in statistical terms. As holders of UUP (US $) take flight, there is a rise in GLD. Of course if you were simply trading the US$ you could also place your money into UDN which is the reverse of the US$.

UDN goes up when UUP goes down.

Gold is much more beautiful though and any time I take a look at my wife’s 1 oz coins or better still, her Indian 22 kt jewelry, I am awed by its shine and luster.

In trading however, GLD or IAU is the way to buy Gold holdings. No emotions there. When there is the down signal, I exit and sell…

Is CREE finally changing? 8/18/12

CREE has had a rough going over the last year. Reaching a high of $72.47 in 12/10/2010 it has tumbled all the way down to $20 before recovering and sitting at $28.35 and right at its 200 day exp moving average shown as a black line on my chart below.

Is the worst behind CREE now? Has all the selling ended?

Hard to predict the future very far out but the technical analysis certainly shows a change in character. Why I say that is because CREE has now established a higher low for the first time since it started its dramatic drop in December 2010.. Next step for CREE will be to achieve a higher high above $33.10. Or it may go sideways for a while before it picks up from here. Still, this is encouraging for the stock.

Maybe the world of LEDs is looking up for CREE finally…

Otherwise, SPY is still pointed up. PCP turned in an Up signal and I am long in it now. Same with SCCO. Still long on SNDK and GLD. And still hanging on to my losing Q’s  put options for no reason at all other than the market has to take a breather somewhere! I have been violating my system direction on the Q’s which has been pointed long for a while and have felt the pain for doing so. Fortunately the max loss is a small limited amount based on my holding a small option position but this is exactly why traders lose – having a plan and not following it. Can happen in a hurry… and get out of control... I will need to learn my lesson here and change direction.

Yin and Yang 8/12/12

Yin and Yang. Two complementary principles of Chinese philosophy. One is negative and dark and feminine and the other is positive and bright and masculine. TLT and SPY are like Yin and Yang in the market. Currently we have an Up signal for SPY whereas last week TLT dropped and produced a Down signal. That is the current state of the market today.

I was expecting a drop and then a strong buy point but the market chose to ignore the drop and just went up. My system triggers were spot on.

I am much more heavily biased towards the up side in my 401K as I wrote last weekend. But I do have some offsetting put options and a position in TLT that I closed last week when I confronted the sell signal on TLT. I remain holding put options on PCP and HOG which still point down. I am long on GLD, and have been for a while as it stays in a sideways position. Also long on SNDK. I closed my position on Ford F with a small profit. And I am guilty of incurring losses on put options on the Q’s and copper against the up signal that my system gave me. I felt that the stochastics were reaching high and it would soon take a breather and go down, and I would exit. Wrong… best to just follow the systems.

I need to continually remind myself that I do not know what the market will do next; but my portfolio will do fine if I just follow my well tested systems in the long haul...

401K Analysis - 8/5/12

The S&P500 (SPY) points long. This sets the stage for going deeper into equities in my 401K and less in bond funds like Fidelity Government Income.

I am expecting a pullback in August and then a push up but it will be hard to time that and easier to just follow my monthly analysis. In any case, the fund selections are somewhat mild and weighed with bond funds to partially neutralize any steep drops.

Going into my current company’s 401K the top funds selected by my monthly analysis are Fidelity Equity Income, Fidelity Fund and Fidelity Government Income fund.  See charts below on all these funds. I will move some money out of the money market and place it into Fidelity Fund and Fidelity Equity Income Monday. I already have monies in Fidelity Govt Income.

As far as the 401K analysis on my previous employer’s funds, I see that top of the picks is Cohen & Steers Realty fund that I have already been invested in. No change required for that. Next picks are PIMCO Real Retn Admin and American Century Equity Income Instl..  I will move money away from the PIMCO Glbl Bond and Fidelity Contrafund into these two on Monday.

Fidelity typically requires you to keep money in funds for 1 month minimum, 30 days I think. Otherwise they hassle you with real threats to freeze you from changing investments and make you feel like a common criminal. Some funds have longer requirements for investing otherwise they charge a redemption fee. I think the funds selected here are not affected by that; but it always weighs on my mind.