Here’s an audio post with my thoughts on Uranium as the uranium mining stocks are now setting up for a potentially great trade in 2012. The audio file is roughly 18 minutes. Enjoy!
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Uranium Sector Overview Chart Once opened, simply click on the chart to view the additional 3 sector overview charts on my public list.
Good trading is not about being right, it’s about trading right. If you want to be successful, you need to think of the long run and ignore the outcomes of individual trades. – Curtis Faith
Harry S. Dent commenting on what he sees developing down the road. ‘Down the road’ meaning the time period 2008 – 2023 according to his analysis. His analysis and conclusions are derived from trends in demographics. The baby boomers are going to spend less. Combine that with what he calls the ‘greatest debt bubble in history’… Tough times ahead for sure. I tend to agree as I see ‘global deleveraging’ as the most important macro theme going forward. Enjoy the vid and have a great weekend!
Something traders should keep in mind during tough times:
Human beings are risk seekers when faced with negative outcomes and risk averse when faced with positive outcomes.
A Happy New Year to all my readers! I will probably take another week off and then start updating the website again. Going forward I will spend more time with non-blogging activities. Although I haven’t made a final decision yet, my plan is to change my approach to running my website. I will move towards providing more audio and video content as writing posts takes a lot more time. In terms of frequency I intend to go for a weekend market overview video post and a mid-week audio review either going through special situations or commenting on the technical development of various markets, sectors, individual stocks and commodities. I will keep updating my public list on a regular basis. Actually checking my public list is the best way to monitor what I am looking at, how I change my mind and how I adapt as the technical situation evolves and new chart patterns emerge.
Obviously no predictions for 2012 as it is a fool’s game. Looking at the charts, I think it is worth monitoring the following sectors very closely as we could see surprises to the upside.
Another thing I am going to closely monitor is when GDX and GDXJ i.e. the gold mining stocks start to seriously outperform their underlying. In plain English: If the gold bull market isn’t over, and for now I don’t think it is, the mining stocks at some point in time will outperform bullion again. Think of it as a natural money rotation process. Early birds have lots of profits in bullion and might take some profits in order to allocate more funds to mining shares. Something well worth monitoring very closely going forward.
The big theme for years to come though is continued global deleveraging. Debt levels are staggering and unsustainable. There will be consequences. Keep that in mind as we continue our journey navigating the financial markets.
Here’s an interesting view on Europe and America from a European’s perspective. James Turk interviews Volker Hellmeyer who addresses quite a few issues Americans simply do not focus upon. So for those of you interested in analyzing the current situation from a different angle, this is a must see video interview. It never hurts to get exposure to contrasting views in order to stay balanced. In a nutshell he sees much higher gold prices in 5-10 years, he thinks Europe is not in such a bad shape and he talks about the structural problems America needs to tackle.
Something that comes to mind here is what bull and bear markets are all about:
Bull markets are about unity, bear markets are about division.
What we are witnessing right now is nations focusing on other nations weaknesses. America is bashing Europe in order to distract from their own problems. Europe is pointing to America’s structural problems and accounting issues in order to distract from their problems. My point is: This is not about being right or wrong. The name of the game is “rotation”. The focus is now on Europe. It’s everyone’s guess how long that will be the case. Then the focus will shift. Then we repeat the process. As a trader my job is to keep in check strong opinions. Instead, I try to gauge sentiment and then focus on timing my trades. Then I manage risk with open positions. Enjoy the video!
If you can’t wait for good setups, you will be ready for them with less cash to trade. – Dan Zanger
Actually I thought about going for ‘Stay defensive’ as an alternative headline choice. The stuff I read and watch makes me want to use that famous Shakespeare quote that ‘something is rotten in the State of Denmark’. The evidence that all is not well is overwhelming. Still, and that is a very important distinction to make, when it comes to trading the markets this has to be considered ‘opinions’. What is important is the charts’ message. Put another way, how various markets discount and react to pieces of information.
So, on to the charts. Exactly the same message. Choppy, sideways trading action. No clear and strong trend. If you are not one of the nimblest traders out there or if you aren’t willing to significantly shorten your time-frame it is best to stand aside.
Here’s an excellent interview with Kyle Bass. Having extremely low exposure to the markets has its benefits. It’s a great time to do a lot of research, read and watch plenty of market related videos. For those with short attention spans, this is not for you. For the rest the video is most interesting as Kyle Bass at some point reveals the conversation he had with some guys at the Comex. He then reasoned it was in the best interest of his clients to get delivery of his gold. The MF Global scandal is a picture perfect example of what can happen if you trust futures contracts or any kind of paper gold to offer you any kind of protection or insurance. I’ve been advocating holding physical gold and silver bullion held outside the banking system for the past 3 years. What happened at MF global therefore shouldn’t come as a surprise. Kyle Bass’ favourite macro short play is Japan due to the country’s demographics and at the same time being as what he describes as one of the most xenophobic societies. To make a long story short, most of what he talks about revolves around the following:
“Too much debt.”
The Kyle Bass AmeriCredit 2011 Session is now finally available for viewers in Germany as well. Enjoy!
In the interview Kyle Bass mentions a piece he deems was the best read of the past 2 years. So if you want to know where he’s coming from you can check it on Taleb’s website. The Black Swan of Cairo - How Suppressing Volatility Makes the World Less Predictable and More Dangerous Nassim Nicholas Taleb and Mark Blyth:
As I mentioned MF Global as a picture perfect example of what can happen here’s a must read. The “MF Global re-hypothecation scandal explained” if you will.
Current market action still doesn’t make me want to put on big positions or trade aggressively. That’s why I am spending a lot of time doing research, watching market related videos and why I do lots of scanning in order to find new ideas. One sector that is starting to provide some good looking charts [...]
Silver is a tough one here. As you can see in my updated long-term weekly silver chart annotations there are two possible outcomes. We could see a complete breakdown if the trendline is broken and the double top pattern comes into play. One could also interpret this as a complex bearish head and shoulders reversal [...]
I could literally list thousands of quotes on why at times it is important to stand aside, why you need to know when it is best to do nothing and to stay in cash when the market is not conducive to trading big or trading at all. In my opinion it simply comes down to the [...]
Protecting one’s self-confidence is key to long-term market survival. If I had to sum up what’s going on in the markets in one sentence it probably would be the following: This is an extremely dangerous market, hence it is best to stay out. The current market environment is one of the most dangerous, treacherous and [...]
Interesting video with Eric Sprott and James Turk. The key sentence of the entire interview is ‘Governments will break their promises’. What is happening right now will ultimately have consequences when it comes to pension plans and other promises made by governments. I obviously agree with that take. That is one of the many reasons [...]
