December 15, 2011
Briefly I wanted to pen a quick post here on what I am expecting to see over the next few days and my intentions heading into 2012. I’m visiting New York City for the first time and have closed all positions while I intend to be double fisting watered down beer, blacking out for another NFL game, and touring the famous concrete jungle (not a big city guy, so I expect to breathe a huge sigh when I return to laid back Canada).
Without dabbling too much into specifics as Jake, Cain, and others touch on the US Dollar and forex almost daily, I suspect we take a breather here or slight flag out and test the 80 level again. For equities this should spark another quick short covering bear market rally, which I hopefully embrace (see long term below). I think there is opportunity to enter the market, especially on gap down, on Thursday with the intention of holding positive positions with stops through the weekend (talking 10-30% invested long here). Obviously, I would not be a good investor if I didn’t advocate sizeable cash, or at least straddling, position bases in your aggressive portfolios. Below is my drawn Ascending Triangle formation that I believe will resolve in the bull trap of traps heading into 2012. Upside target still in the 1260-1300 area, and would begin layering into long term shorts at 1280, add in as we go higher towards (possibly if obtainable) 1340 highs. I will be working on my short allocation, especially how I intend to attack certain geographies, sectors (well financials is a no brainer…), and broken down companies with an incomprehensible amount of debt in a credit crisis or large economic downturn. This I intend to complete over my few days off around xmas.
With that simple and really not helpful post, I look forward to more of these. My life went through a career upgrade whirlwind recently so between packing, moving, and rearranging all my accounts it has been one hell of a month. Cannot wait to kick back, eat some holiday grub with the extended family and returning friends from around the globe.
Any NYC suggestions please let me know, will be staying in the Financial district.
July 4, 2011
Well the title really says it all – but what you might know is that I’m leveraged short heading into tomorrow morning. I bought it knowing my $TZA calls would likely expire worthless, but it is a hedge worth owning after what defies both logic and statistics dubbed the ‘“Gotcha Bitches”-Ben Bernanke’ rally. So the real question is, if the majority of traders hedged up similarly like myself, are we in for an even larger squeeze tomorrow? Remains to been seen, the indicators say down, but a squeeze tomorrow and maybe we can officially call it the next leg up? (I don’t buy that sentiment either).
Toronto performed very well today raised by (you guessed it) higher commodity prices in Gold, Silver Crude, and building off the strength of Friday we saw breakouts in Iron Ore miners. Without the NYSE open, I had cash burning a hole in my RRSP. I took time to add into some of my winning positions (core) that I intend to hold until my grave. Alderon Resource Corp ($ADV.vn – Canadian Venture) had immediate dividends to my new addition. I mentioned this in my last post as my favorite junior iron miner and it did not disappoint following through above $3.00 and rocketed to $3.30 into the close.
I’m still long half of my $X position I started on Friday, I reached my intraday plateau (a new rule I’ve adopted) where by any call (individual) that appreciates $1 within a day, I have to take half profit. Depending on my love for the trade or stock, I evaluate closing the entire position. My reasoning was by removing half I could add in again at a lower price. See the notes on the chart below.
Finally, worth taking a look at (I’m probably going to nibble [1/4 position] on strength): Genco Shipping and Trading $GNK. First of all, let me spit some numbers at you:
1. Book Value per Share: $32.8
2. Total Cash per Share: $7.84 (right about where its trading).
3. YTD Return: -47.60%
4. 55% is owned by Institutions
So, if this company’s debt is really bogging it down, why haven’t all the institutions bailed yet? This company, long term, definitely has the potential to regain its glory days. We may be in somewhat decline, but global shipping demand for everything from dry bulk to containers is sustainable. I doubt anyone can say with a straight face “Emerging Markets are bad for global shippers”. I’ve posted a weekly and daily chart below, notes on the charts. Some people consider shipping companies and their movement to be linked to the Baltic Dry Index, sure maybe they are correlated (http://www.bloomberg.com/apps/quote?ticker=BDIY:IND). I make this sort of trade based on the risk, reward, and underlying fundamentals.
So the question on everyone’s mind is will we continue to move higher? As I stated Friday – any profit I make being hedged will be turned into new longs. I will discuss some of my favorite Canadian Energy companies later this week if I have a chance.