WINNing

I couldn't help it...a Charlie Sheen reference is just to good to pass up.  But seriously, $WINN is exhibiting some interesting trading and it looks like it's ready to explode to the upside.  Check out the daily chart:

WINN is setting the stage for an accumulation break out.  After long sideways consolidations, these types of moves can be rather large.  Personally, I've taken out options positions for this trade as the options on WINN seem a little cheap...probably because of the lack of volatility lately.  The confirm dots in the chart are just a trend following indicator that I've been playing with that seems to have some promise.  It's basically just an updated version of the turtle trading break out method with a couple of small twists.  I'm finding that combining different trend following models that base their signals on different variables offers good trades.

I'm pretty sure Charlie S. would give WINN the Warlock seal of approval (okay, no more Charlie Sheen references).

Have a good weekend.

TLT

Silver is Still Sliding: Check out $ZSL

I covered half of my silver short yesterday...maybe a little early but needed to book some profit into this crazy momentum.  The rest of the position is split between some options and a position in ZSL, the ultra inverse silver etf.  Check out this hourly chart:

I don't see may opportunities like this...so many people were long silver and emotional that it was unreal.  Even some of the guys on Fast Money (a show that I only watch to see what the masses are watching...seriously, don't watch these types of shows to take their advice) were arguing about how the fundamentals are still intact for silver, but there's going to be a lot of volatility in the short term.  That can be translated into, "I am long silver and I don't want to sell right now.  I am emotional about this position and I want the market to conform to my reality."  And there is the problem. 

So many people justify their positions with fundamental or other factors and ignore the obvious change in order flow that is taking place right before their eyes.  Who cares what the fundamentals of silver are or what the long term outlook is.  The reality of the market is that there are no longer more buyers than sellers and the big buyers, the buyers that really move markets, have been selling their positions for a couple of weeks. Arguing that the market should conform to your reality is for losers and very good value investors (many of which are wrong quite a bit and quietly blow up).

One of my friends who also happens to be one of my favorite contrarian indicators told me that he now thinks Silver will fall to $30 an ounce.  I have jokingly told him several times that he is my favorite indicator but the fact is he is priceless.  This same person told me to cover my silver short last Friday because I "was going to lose money."  He's still long silver but now he's coming to grips with the falling  prices and it appears that panic is about to set in.  That will be my indication to sell another 1/4 of my position.  The last 1/4 will be sold when my trend following system gives a sell signal.

As for the market in general, it appears that a small pullback is taking place.  I'm not changing any longs yet, as this looks like a normal pullback for now.  If that changes, and it may, then I'll change some things up.

TLT

Silver is Sliding

Might be jumping the gun, but I started shorting silver last week.  I rarely take on pure contrarian positions but this one was hard to pass up.  After the 6th amateur trader told me that they were never going to lose money in silver and that they were waiting for a price above $50 to sell, I began shorting.  So far it has worked, but you never know with something like this that is parabolically rising. 

I believe that the big boys have unloaded most of their holdings (see volume above) and the day traders and retailers are the main ones still playing in silver for the time being.  Day traders will be fine for the most part, but retailers can easily get hurt here.  Just my opinion and I've certainly been wrong plenty of times. 

Have a great week.

TLT