Short the Miners
Thursday, March 27, 2008 at 08:48AM Not too long ago I mentioned the weakness in hard commodity prices and producing companies. Most of these stocks are at an interesting point right now, which ought to confirm changes in their trend.
BVN- Looking like a great opportunity to buy puts
GG- Likewise
GOLD- See...
You can lump all other miners into this category, they all look the same. As you can see this is the early stage of a trend reversal. While I am not bearish on the yellow metal itself, I am bearish on the mining companies as a whole.
In closing I'll throw a bullish idea at you (again).....
NFLX- If you didn't take it down at the flag breakout (which is the last time I mentioned it) I like like it here today.
By the way, basketball starts back up today. I am not sure if I told you this, but the pot has reached $2k. This means that I will be passing out $1400 for first place, $400 for second, and $200 for third.
I'll be back around this afternoon.
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Reader Comments (351)
VA Beach,
I just tried to catch up in the comments from this morning, and I saw you mentioned I was going to be teaching something.
Where did you find this?
Jeff,
Do you see gold retracing back to the 850 range before resuming its climb up to 1200? Has it kissed 950 before sinking back again?
http://online.investools.com/spotlights.iedu
I was going to ask you this morning if you knew about it...sorry to be the bearer of bad news.
Apparently you're doing it on April 4th as well.
VA Beach Girl- Jeff's been pretty busy lately to worry about his side job at Investools. :-)
Jeff:
You are listed on the INVESTools "Spotlight"
FRI., @ 5:00pm ET presentation featuring:
Volitility Market Spotlight/J.Kohler
Jim
Berkshire,
I take no offense at what you said. It was an emotional reaction on my part to question my reasons for entering the number of trades I have. Normally I have only 1-2, sometimes 3 positions on at any given time. But yesterday I saw entries on three so I took them - total 5. I just remember back to the new year when I had free time to put on a bunch of trades for some good diversification and my best performing month to date.
In any case, I've been keeping my position sizes to about 0.5% since the fall so I could use this time to practice and perfect my skills w/o having my head handed to me. I just started reading Trading in the Zone this week - a Godsend for where I am in my trading abilities.
And Berk, I always appreciate your input. I'm not the type who gets offended very easily.
OIH is simultaneously breaking a Sym Triangle, the 0-line on the MACD and my heart.
Thanks for the heads up.
Stan,
You're right. Lately (since the break-up of the cast) I have been working from home.
I mean trading from home :)
UHAL - came up on the TOS Sizzle Stock Hacker
Cam,
Thanks. Sorry...I am "light-headed" and emotional from dealing with banks and dentists the past couple of weeks. I may have come off a lot sharper than I intended.
Berkshire
PETD seems to be working its way back up to 72.50 resistance on low volume. Possibly a triple top.
Berk,
I didn't think anything of it. seriously.
GG I like this one the best from your post. Took down some Apr $37.50's.
NFLX Own stock. Sold a call Tues. to protect the downside expected move.
Cool.
I am having trouble interpreting my tone. It seems cool to me, but I am having trouble keeping in touch with others.
Berkshire
BVN spreads are too high for me, but I like that setup the best for E/E.
Jeff,
JPM Did you trade this at the top of the broadening pattern? If so I'm wicked jealous as I missed it.
I know a pattern isn't a pattern until it's confirmed but...the entry at the top in the event of downward pressure was nice.
Cole,
I hear ya on that one. Does anybody actually feel comfortable with 50-cent bid/ask spreads on BVN? Seems like a bit of a lost cause.
VABG,
Nicely done.
Cam,
I have successfully traded larger spreads. But I would need a much larger price target,
Go ahead and throw it in at the mark 1.25. You should fill fast at 1.30.
(Assuming APR 65 Puts)
Berkshire
RIMM - earnings next Wed & it really wants to get back to $120 Plus, the options are strong on the Apr 120s. So I'm watching the 15 m bar to take a poke for a few days work.
Jeff, you should ask a trading question every week and the prize is the addict gets to choose the intro song on the watchlist. Or you can just play "southtown" by P.O.D. :)
GTLS
Jeff-
You say you're not bearish on Gold just the miners, but if you overlay GLD (which tracks the metal) on top of these miners stocks, theres a near perfect correlation. In other words, as go the gold metal, so goes the gold miners. So it seems inconsistent to me to say youre bearish on the miners but not on the metal.
Berkshire,
Holy todledo! I didn't even look at the other strikes. How about that April 70p 2.30/3.10? What happens when we've reached our target and we have an 80-cent spread to deal with
good entry on CNW on retest of breakout? Volume going down on last 2 down days.
Cam,
you split the bid and ask before the target is reached (i.e. sell into strength).
Usually anything within .10 or the mark (mid-point between bid/ask) especially when it is moving in your favor.
I am not saying I enjoy this. Just if the move is there, the move is there.
Looks like some people have tightened up the 65's right now... Spread only .15.
Berkshire
Though I also remember my first trades with FFH.
Bought and promptly lose over 1.00. The spreads were about 3 apart. It was a very fast lesson.
Berkshire
AXA
Weak volume double bottom breakout.
We shall see what the end of the day brings.
Wow! Filled at 1.25 immediately. Should have tried for bid ;-)
Liking calls on COL, CP, FWLT, EK, MO, BNI.
Berkshire
Berk
I am still in PRGO...do you see it breaking 38 today?
Thank you for all your help, I too hate dentists...I suppose this makes me an anti-dentite..if you follow Seinfeld....thanks is advance.
Eddie
Berkshire,
How did you get the idea for a call on FWLT? Was it from the Put I entered on it the other day? ;-)
Cam,
Just remember that other times spreads are large.
I have been know to put in order above or below to try to "artifically-reduced" the price. I then cancel the other orders once I have been filled.
Berkshire
I'm cutting FWLT today, and I think AMLN is done for, too.
Anyone know whats up with JAKK? The options just don't want to move.
Berkshire,
I think I've tried that a few times, too. Right after I placed my order. the 1.20/1.30 spread went to 0.90/1.30. Doesn't look good on the P/L sheet.
Matt,
It may seem that way, but you are wrong :)
Cam and Berk,
I've enjoyed your repartie over wide spreads. I've given up buying options with big spreads as I always had trouble getting out of them.
Always.
When they went against you they were absolutely impossible to sell except at fire sale prices. Maybe one day... after my S cubed IPO is over-alloted... I will try again.
nice little topping candle on the futures
No Cam.
First off. FWLT...It doesn't go down (at least not when I own puts on it).
Second off. Check out ALL of the previous major lows in FWLT. Notice the HUGE spikes...
I also know from missing my last set of FWLT calls, that even though volume is weak. The stock doesn't really stop moving up. I think this one will be one that is headed to new highs.
Also, from the 1/23 high, it has traced out a text-book Elliott Wave corrective pattern (it really is a beautiful picture). Two oscillatore were divergant (bullish) since 11/27/07.
I traded it as break-out (no volume) on 3/24. It broke from diagonal resistance. A retest towards $55 should be in the cards. But looking at FWLT's other rallies, it seems to only stop when it wants to.
I will probably sell part of my position. I have been selling partials at anything around 40% profit this week, and just re-entering.
Berkshire
I'm on the fence about ESRX right now, but I'm leaning towards cutting it free. It's getting too friendly with this upper resistance.
I could maybe convinced to buy puts on SBAC today.
Is it just me - or is everything setting up on the put side of things?
Are you guys finding more call or put entries today?
Cam,
What's your stop on ESRX...I love the huge decline in volume, and it is at some over-head resistance.
I would hold on til the end of the day (which I think you usually do). It might look a little prettier.
Berkshire
Jodi,
That is a great one too. Check out a line chart...right at resistance (diagonal and horizontal). Cheap options, and at least a 10% move.
I can twist your arm a little too if you would like.
Berkshire
Xavier vs WVA a war...there will be blood.
Grabbed a few puts on GFIG. Bouncing downward off diagonal resistance.
Ascending triangle on MikeyD's. Ya ok not sexy but you could become a menunaire!
Looks like the dow touched its 50dma today, so maybe it can push up to 12700 now. Then things will be interesting again.
Sorry jym, I would like to help but I don't know JAKK....just ask my wife.