Sunday, April 24, 2011

follow up to "where is the market going"

First off, beware what you read on blogs. Case in point, I mentioned in my previous post that Canada did not have much debt as a country. Not true, I decided to check on that, and Canada has debt that accounts for over 50% GDP, one of the highest debt ratios in the world, and I see that its citizens are over extending themselves in real estate, with many articles talking of a Canadian RE bubble and collapse. Amusing. I just talked with someone who is involved in pink sheet Canadian REIT's, but he is obviously a high risk taker. Boy, bubble signs and worth looking into, might be a parabolic rally brewing there to catch, but I have not looked into it yet. I still hold firm on my disdain for Celine Dion.

The head and shoulders is still in play on the SPY, and the dollar continues to fail, so this is very bullish for the markets. Game still on, but really, we are still in a range, and choppy trading should be expected. I still am sticking with my earnings gap plays (daytrading, bread and butter low risk trades) and silver/gold swings.

On Thursday silver traded WITH the dollar throughout the trading day and UP off of flat gold, first time I have seen that. So silver is starting to show some signs of a parabolic move. How long it will last I have no idea, but as long as the dollar plunges, and as long as silver outperforms gold and the miners, it is the place to be. This is great validation for me on my trading strategy, as price action dictated SLV (or AGQ) as the place to be, and that is where I placed the majority of my metals trade. I am still looking for rotation to gold or the miners, so we will see. The lesson over and over and over again is: ONLY PRICE PAYS, watch the price action. Not what you think, not what the blogosphere is ranting about, not what Cramer is calmly telling you, not what your broker/co-worker/neighbor says who is convinced its all about solar. Price, price, price.

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