August 5, 2011- Quietly Amass Monumental Opportunities Amidst Gloom

Lyrics from Stand by Me

When the night has come
And the land is dark
And the moon is the only light we see
No I won’t be afraid
No I won’t be afraid
Just as long as you stand, stand by me  – John Lennon

_______________

When global selloffs and rebalancing happanes, when flushes and a glimpse of how fast trillions of dollars can be eroded in the markets in just a few days, traders and investors alike are reminded just how fragile the global economic recovery is.  Oh, volatility of 2008 of 4-5% swings in the index precedes 10-20% intraday ranges for volatile stocks.  John Paulson’s fund lost 22% during 2011- and when his funds need cash— those gold bugs will have margin calls.  This is why even gold wasn’t immune in yesterdays global selloff.    When a very big whale sells a stake, short term, you’ll get volatility. Let’s be clear here.  Everybody (ok MOST!) in the Philippines are holding Yap stocks – LC,MA,ZHI because let’s face it— a company with huge gold reserves and lots of tsismis surrounding mining licenses, partnership deals fuels the speculative nature of all the Filipinos.  Let’s not even name all the other penny stocks that rose due to all the excitement brought by PWR etc.  When risk taking goes so high, you need to stop yourself from getting carried away, even when you know that the setups have gone 40-50% in a single day, and you could easily have profited from the large ranges.  Perhaps, I’m talking like a stupid old man now.  Ok.  Call me stupid, and that’s fine.  True- to each his own trading strategies.

A quick check on the popular buzzwords around the market headlines and pundits are:

Loss of faith and confidence, Market meltdown, Unemployment and low wages, Double dip recession fears, Panics and crashes, pointing to heavy losses, Asian markets set to dive.

Hey, check out these trading videos in my twitter stream:

1.)S&P 500 down 13%, Volatility up 110%, Interest Rates Less Than Zero, What’s Next? by MissTradeLive

2.) http://chart.ly/d96g9tp – Zortrades shows us the US market indices are at 20 month moving average supports.  These are important levels, but play your game right.  You’re in a situation wherein, traders like John Paulson who has to raise money, will sell indiscriminately some of his shares.  Sit around the rubble.  Await for the capitulation, because you’ll have large gap downs.  

No one wants to own the markets right now.  Be aggressive, but be wise.  Your market timing is telling you it’s still going to fall, so quietly amass.  Don’t aggressively buy his gold and precious metals just too fast.  Don’t be lunatic!

3.) When Margin Calls are the Triggers for the selloffs—and when $AUDUSD,$NZDUSD, all the commodities (US Oil) ane yes — even GOLD falls!— when everything falls, and no one is immune- Be a wise discerning trader/investor.

In a couple of days, I’ll show the best opportunities I’m looking forward to.  There’ll be wild volatility but also low risk entries to get into the best Asian currencies, to short the USD even more.  You can’t lose sight of the fact that USD is still going to be flushed in the toilet.

So here’s me.

Quietly amass… it’s not even accumulate.  It’s amass.  Disasters are very good opportunities to dramatically find the gems amidst the rubble.

Just Top of Mind (Technical Price Actions):

1.) Alliance Global (AGI) – is the breakdown stock that never materialized- Why Buy?

I never saw a chart that failed to breakdown go through a strong bounceback and even tried to break into new highs that was bearish.  The fact that AGI brokedown, shook all the traders away, and had the strength to go from 9.50 to 12 in a few days, this strength completely erases the shakeout.  Find a double test.  Let’s check what happens, but I’ll be checking this.

2.) LC/MA/ZHI- Leaders remain leaders no matter what happens.  What’s Paulson selling gold and margin calls going to do to the price of gold?  Short term they can be selling and causing even graver selloffs, with all the algos pressing their sell orders. It just reminds me of all the flash crash.  You’re not a robot.  You know if the selling is real, or just indiscriminate.  Allow the great selloff to pick up the best “values” in the market.  Imagine if these stocks correct?  If they ever will?

If you can buy a Ferrari at 10-30% discount, wouldn’t you?

The most “expensive” stock is the cheapest.  Nevertheless, a market operation like the LC/MA/ZHI is majority controlled by strong hands though of course the public can always panic every now and then.  We’ll see.

Exciting to watch the markets 😀

-The Faceless Trader

(Taking a bet that $AUDUSD at 1.0450 is a low risk entry point for me to go long, and $USDPHP at 42.80-43 is attractive bet to go short too. All bets have wide stops (100 pips and 1 peso stop).  This whole volatile round, should be played with proper position sizes.  There’ll always be more confirmations and sell-offs to encounter these following days.)

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4 Responses to August 5, 2011- Quietly Amass Monumental Opportunities Amidst Gloom

  1. Hi!
    Do you think LC ‘s will continue its surge after its drop yesterday caused by the panic some investors/traders due to the US stock market’s big drop?
    I’m a holder of some shares and I wonder if I sell half of my holdings or hold them…
    If I was just brave enough and bought near the open yesterday, I would have made some bucks.

    Thanks and God bless!

    Like

    • Hello 😀

      Honestly, I find the 5% drops of LC just a normal market reaction to the overall global selloff by the market. I think though that it will outperform the index, and all the other companies in the mining index (excluding the penny stocks). I think, just bear the volatility, and hold it pa rin. While I think gold will not be immune with the selloffs, I don’t think you should sell the strongest leader in the mining sector. If you can’t sleep at night though, with the market volatility (which I believe will be stronger and larger ranges these days)- Consider selling a few, but just make sure to still have a buy on pullback stance on the stock. I find nothing wrong. Just follow the moving averages (when it breaks a certain key technical price that you think is important, that’s when you sell). This depends on your overall trading horizon, but if you’re the type who wants to trade only the primary trends, and not the short term swings, just hold and stay long.

      -FT

      Like

      • thanks for the reply. I held on to my shares… i thought of selling them during the early part of today’s (August 8) trading but i decided against it and instead added a bit…
        sold a bit of SMC and bought some AGI @ 10.80, hoping that i wold hold its ground at that level…closed at 10.72..with a 0.36 dividend per share (0.324 net of 10% tax), I am hoping that price won’t go lower than 10.48….fingers crossed…hahaha

        Like

      • i took the loss on the AUDUSD trade. it hit my stop of 1.0350 (i went long at 1.0450)- it briefly went above me..but that only high it ever made was 1.0490++s. Markets are currently very shaky. I’m itching to buy, but my tape tells me there’s a lot of possible more selloffs to come. I’ve sold my shares to the sleeping point, thus whatever I have held, I’m fine and happy with them.
        I’ll try to come up with a market synthesis report of overall markets later. thanks.
        -FT

        Like

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