Tuesday, April 12, 2011

Sold All Kinds of Stuff

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As many readers know, I am a full-time public school teacher with a very thin amount of *personal reflection time* during the hours the stock market is open and trading.  During this morning's precious metal volatility I looked at the 25 or so positions I have in the three accounts I manage and said to myself, "too many positions, too complicated to keep track of with little to no time to be optimally effective - enough".
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Gold had made a swing high signalling the likely top in its current daily cycle, the daily TSI on both gold and silver signalled a sell, and sell I did.  I sold until there was just about nothing left to sell.  I wanted to simplify my investments, move forward with clarity and that goal has been accomplished.
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My outlook is that the US Dollar has likely not yet bottomed.  It needs to do that first, then rally to begin a new daily cycle.  Each of its most recent daily cycles have headed higher for a handful of days and then rolled over - and in the process the dollar made a lower low before the conclusion of that particular daily cycle.  I will very selectively buy positions when the dollar begins to roll over in its next daily cycle.  I anticipate that will be several to quite a few days away. And when I do buy I will keep it much simpler - no more having 25-30 positions to sell, that's for sure.
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Today's sales in my TSI trading account included: SFMI, AGQ, GPL, SVM, NXG, SLW (options), SIL (options), and ANO. I have noted the sales prices in my TSI Trading Record.
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My TSI Trading record has been updated and for the nine months since I began this blog the cumulative total is now 600.7%.

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22 comments:

  1. trond56April 12, 2011 at 8:54 PM

    Hi John! I'm happy that you liked it.

    'From your chart I am guessing that silver needs to hold yesterday's low for the comparison to hold water (which would be great, if true)'.

    So it held yesterdays low(silver at least..) making it even more similar, in posting a large back to back green and red candle-pair just as in 2006, and then starting a tentative rise now as then.
    (See the red arrow on the updated insertion (as of this evening) -which now also is shrinked to the correct logaritmic scale).

    http://www.flickr.com/photos/58720171@N08/5614561935/sizes/l/in/photostream/

    ReplyDelete
  2. FungApril 12, 2011 at 9:19 PM

    Hi John,

    Any suggestion on when to reenter into precious metals again?

    Thanks,
    Fung

    ReplyDelete
  3. SCApril 13, 2011 at 12:12 AM

    Mr Townsend,

    I would like to bring to your attention that your calculation of total return is in error. You have added up individual trade return as cummulative return. But that is not the actual total cummulative return of the portfolio.

    If I have $10,000, and I buy 10 stocks. If each stock makes 10%, I do not end up with 100% return. I would have 10% return on my $10,000, with each stock earning $100 (+10%). The only way I would have earned 100% is if I take the whole $10,000, buy 1 stock, make 10%, and repeat that 10 times. If I spread it out on 10 stocks, then I couldn't have made 100%.

    Likewise, the only way you could have made 600% is if you invest everything in one stock, pocket the gains, then move on to the next one, and then add up the result, and you would have 600%.

    But, checking your trades, you couldn't put everything into 1 stock at a time. You have multiple positions most of the time. So you have spread your portfolio across different stocks. With that, your portfolio returns need to be calculated on a weighted basis. The proper way to calculate the total portfolio returns would be to multiply each return by the % weight of asset you invested in that trade and then sum up the weighted returns of the trades.

    Sincerely,
    Kenneth

    ReplyDelete
  4. 23t870April 13, 2011 at 4:37 AM

    Fung,

    I believe John said that he is waiting for the dollar to roll over (form a swing high) as his signal.

    It is the dollar's collapse that has been the driver of this precious metals bull run so it stands to reason that the dollar needs to continue its plunge to key this next leg up.

    ReplyDelete
  5. EdwardApril 13, 2011 at 5:37 AM

    Excellent Mr Townsend.

    sold all at 10.34 AM Mon 11 Apr being both 45 minutes late & 45 minutes early for daily cycle high, donating 1%, all's well for the moment.

    ReplyDelete
  6. John TownsendApril 13, 2011 at 6:22 AM

    Edward - nice going!

    $$$ - excellent explanation!

    Kenneth - your understanding is generally correct. The cumulative total % gain of all my trades is 600% and the weighted average method would yield the overall % return on the capital I had invested.

    ReplyDelete
  7. theworldhaschangedApril 13, 2011 at 7:13 AM

    Mr. Townsend,
    I have lost track. Please reply with open positions. Thanks.

    ReplyDelete
  8. John TownsendApril 13, 2011 at 8:39 AM

    theworldhaschanged - any positions I have open are on my TSI Trading record. I believe there are three now.

    ReplyDelete
  9. sierra_hpbtApril 13, 2011 at 8:45 AM

    John,
    How does this look now for our silver parabolic move?

    ReplyDelete
  10. John TownsendApril 13, 2011 at 4:40 PM

    sierra - nothing has changed in my opinion. still extremely bullish.

    ReplyDelete
  11. RobApril 13, 2011 at 7:18 PM

    I too find I have to many positions, which take to long to track. I have noticed that AGQ outperforms every other sliver stock, as well as Gold stocks. I am considering just trading that.

    ReplyDelete
  12. 23t870April 13, 2011 at 8:04 PM

    Rob,

    Here are 3 things that I like about AGQ

    1) Tracks silver (2x!)

    2) It is much easier to manage one trade than many.

    3) AQG avoids company specific risk.

    4) Tracks silver 2X!

    ReplyDelete
  13. trond56April 14, 2011 at 9:06 PM

    Ok! Congratulations on selling silver at ~40$ just after I sent that similarity chart indicating an impending takeoff. Try trade on daily wiggles just before the chance of a parabolic surge is called 'not seeing the forest because of all the trees'. :)

    Here an updated 2006 similarity chart, with the latest development added, the grey circle to the right. The script from 2006 seems to be traced like a shadow:

    http://www.flickr.com/photos/58720171@N08/5620883312/sizes/l/in/photostream/

    ReplyDelete
  14. John TownsendApril 14, 2011 at 9:37 PM

    Trond - I am cheering for you!

    ReplyDelete
  15. trond56April 14, 2011 at 10:18 PM

    Hi! Thx. Well as usual I'm somewhat arrogant after making a right guess :)

    I can't find scary corrections before the 2008 and 2006 takeoffs, but probably such have happened on earlier occations.

    ReplyDelete
  16. 23t870April 15, 2011 at 4:35 PM

    Am I reading something that is not there ?

    It looks like there is a trend line break on the tsi and a potential crossover on the upp chart.

    Do you agree?




    http://i53.tinypic.com/30xaanp.png

    ReplyDelete
  17. John TownsendApril 15, 2011 at 6:16 PM

    $$$ -- UUP has a bullish trend line break as of today, true. But at -53 we are still a long ways from the bullish ZERO crossover. Remember, so long as the TSI is BELOW ZERO, any time the TSI falls, price is falling. ie to make it from -53 to ZERO without a single down day is somewhat unlikely.

    What is more likely to happen is what we saw at the end of this past January. As the TSI heads towards ZERO it has down days that pull it south, creating positive divergence(s).....which are then buy signals.

    My hunch is that the dollar is about done falling, but has not made a final bottom. The positive divergence created on Feb. 1 and 2 nicely identified the true bottom.

    ReplyDelete
  18. crashjpApril 15, 2011 at 9:13 PM

    john have you taken a look at tinka/tkrff ?

    ReplyDelete
  19. troyApril 16, 2011 at 6:54 PM

    tinka tinka tinka!

    ReplyDelete
  20. FungApril 18, 2011 at 1:13 AM

    Hi John,

    At which point, i.e. prices of silver, will you consider precious metal has already made a low, and is ready for the final C-Wave? It feels like I am not going to get that correction I was looking for last week.

    Thanks.

    ReplyDelete
  21. John TownsendApril 18, 2011 at 7:18 AM

    It *appears* that the US Dollar has bottomed and gold/silver have topped. I guess we will know that for sure in a couple days. Anyway, it should be another week before the final show begins.

    ReplyDelete
  22. Adam ChalmersApril 18, 2011 at 10:26 AM

    I'm starting to regret not selling my CDE June $45 calls last week when I was up 10%

    I have a really bad feeling the powers that be are going to liquidate until the Fed comes out with QE3 in a few months. This is really frustrating!

    ReplyDelete

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