Good afternoon all!
This post will be concise and to the point so I can get off to my lunch break and then back to work. Before I summarize the morning we just had, allow me to grace you with my losses and new adds for this week:
- Stopped out of SNDK @ 13.05 for a -0.79, -5.7% loss
- Holding ABX @ 32.75 with a stop @ 30.70
- Added DUG @ 22.18
- Added SSG @ 37.15
Although I am somewhat upset with SNDK getting stopped out, I have moved on from my ball-in-corner-crying mindset and have decided to put the money I had left from that trade and buy SSG. But what is my trading rationale with regard to SSG? Why did I choose it, and why should you? Let's take a look:
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SSG 3 Month, Daily
Although the volume isn't the best, SSG is the inverse ETF for the Semiconductor industry. With solar about to drop alongside oil, SSG is your best bet to get an edge on the short term semiconductor destruction.
With that being said, the following tickers are tickers to watch when the Semiconductor industry begins to reverse from its bearish decline:
- JASO
- LDK
- SOLR
- SOLF
- SPWRA
- STP
- SOL
- ENER
- LSI
- MCHP
Moving on, I've chosen ABX (Barrick Gold Corporation) as my bullish position because of the feeling I have in the future of gold. I've slapped together a comparison chart of GLD and USO to show how you would have done over a two year period if you would have invested in both of these ETFs at the same time. Let's check it out:
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GLD - USO Comparative Analysis (2 Year, Daily)
As you can see, the GLD path over a two year period of time was the path that lost you no money. Oil over the past two years has become ridiculously volatile, and is a place where a ton of money can be made and lost. From a security standpoint during declines like the one we're about to experience, however, I prefer gold over oil because of the lack of volatility within the hard asset's industry.
But Musso - out of ALL of the companies that are based around gold, why did you choose ABX? Let's break it down technically:
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ABX 1 Year, Daily
Technically, I've chosen ABX because of the one year trend seen in ABX and the pinch it's currently experiencing against its 39.10 resistance price. Fundamentally, I've chosen ABX because it was one of the lower priced, larger capped corporations that has done well over the past year within the gold industry. Weathering index declines like the one we're experiencing is one of ABX's fortes.
That's all for now. This morning has been nothing but a thin volume, choptastic, lack of conviction morning. I'm preparing myself for what lies ahead of us and I'm not looking back at the things I've done wrong. I'll be writing a post this evening that deals with the current oil atmosphere and when it may be a good idea to begin dipping back into the oil names. For now, I'm sticking with my DUG position and allowing it to build over the course of a week or so. This length of time is not a normal swing trade for me, and I am treating this position with the utmost care. To be quite honest with all of you, I'm not surprised that the NYMEX Crude Oil price is doing what it's doing so far during this boring trading session.
Until later...
ZM
nice haven't thought of SSG as a way to play solar...but makes sense though. have fun at the tweetup (not meetup) boy-o!
We're gonna miss you over there son!!
SSG is something I just found a couple of days ago. I had seen in before on the UltraShorts, but never gave it any thought. Time to hop in, for solars are doing the pop-and-die again.