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At last nights close the NYSE composite had created a pattern that suggested a two-thirds chance the broad market would fall in price. Did the “Power of the Pattern” have any idea what global news would take place? NO!!! Yet the patterns do have a great ability to see what could take place around the corner. (seeing around the corner)
Please respect the “Power of the Pattern and the Power of Deflation!” Patterns suggested over THREE WEEKS AGO, that DEFLATION/LOWER PRICES were in the near future. (see trend reversal/deflation post here)
As a reminder, due to the patterns of late, we are attempting to score on defense by owning SMN, DUG, PSQ as well as long the Dollar and TLT. My focus now will be when to harvesting these defensive positions.
TJ…Trailing stops took us out some time back. When buying an investment, I have found the first thing that should be done is setting stops. In my opinion TJ, protecting values/risk management is one of the most important things we can do! It is ok to be wrong, no matter how hard I work I am still wrong a third of the time, yet the key becomes “not being wrong for long!” If we buy these tools at a quality price point, which took place with SMN and DUG, both gained right out of the shoot, so we had some initial gains and the trailing stops adjusted. Then as the reversal came the stops had adjusted and came in very handy.
I shared on the blog and dshort, that the 500 was on suppport, VIX was against resistance and the number of bullish investors had made a huge decline. If history was any guide, this combo usually did not bring about lower prices. At that time the 500 index stood at 1,256. I shared in that post that the combo has brought about much higher prices.
https://www.kimblechartingsolutions.com/2011/03/big-drop-off-in-the-number-of-bullish-investors/
Hi Chris,
Enjoying the ride in SLV, GLD and GDX. What are your thoughts on SMN and DUG? Missed setting a trailing stop and regretting it now. Are you riding them through yourself?
Many thanks for the insights. Patterns give a portfolio some real potential.
Regards,
TJ
Stemphos… See this post for game plan in SLV. Do I suspect that Gold and Silver will head south if the deflation theme continues? YES!!!
https://www.kimblechartingsolutions.com/2011/03/silver-update/
Mike…Trends started changing on 2/24 See the post below. The Power of the Pattern helped me see that protection was the key due to the potential that stocks and commodities would fall in price. Patterns suggest this is bigger than the story in Japan…. Rough rice and copper peaked before any of the Japan news, weeks before.
https://www.kimblechartingsolutions.com/2011/02/key-trend-reversals-at-hand/
Chris…not a technical pattern but maybe the time to harvest is the day the Japanese put out the nuclear fire.
Hi Chris,
What about SLV? I know you mentioned that you were overweight a few days ago, but if Silver is going to go down with the market (i.e. down 5% today) then maybe I thought your view might change.
Have you changed your stop on SLV?
thanks
stemphos