Tuesday, May 13, 2008

Gold and Bank America

Interesting goings on in the gold market. The ill capitalized latecomers are being shaken from the tree. I am watching 'the box' closely but am keeping an eye open for the lower target as anyone worth their salt in the markets knows you cannot rule anything out. The margin clerks can be ruthless and price is the only oscillator/measurement yardstick they use. We only wish others (see below) would do the same.

Bank America, ahhh what to say. One of the poster children for the ills of averaging down. Invested 2 billion in Countrywide(CFC) at $18. Now with the stock trading below $5 I would offer the same counsel I did to Mr. Joe Lewis regarding Bear Stearns.... sell. Unless as some have suggested that Countrywide and BAC are counter party to so much toxic crap that anything other than a shotgun wedding is out of the question.
The chart indicates that we have what looks to be a large pennant developing. It bears(no pun intended) watching as it is worth approximately $15 pts.

Good speculating to you all !
Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 1 unit Allis-Chalmers ticker ALY @ $14.45 stop at $16.64
Long 2 units Ultrahort Real Estate ticker SRS @ $85.35 stop at $84.84
Long 2 units Ultrashort MSCI ticker EFU @ $76.25 stop at $74.34
Long 2 units Powershares DB Agriculture ticker DBA @ $36.35 stop at $36.46
Long 2 units Ultrashort S&P500 ticker SDS @ $57.05 stop at $56.14
Long 1 unit Ultrashort Russell 2K ticker TWM @ $74.60 stop at $69.92
Short 2 units Daimler AG ticker DAI @ $86.20 stops at $82.48/$81.38
Short 1 unit Brinker Int'al ticker EAT @ $21.25 stop at $24.14
Short 3 units Retail Holders ticker RTH @ $96.72 stop at $98.56
Short 2 units Goldman Sachs ticker GS @ $197.95 stops at $192.14/197.68
Short 1 unit Darden ticker DRI @ $37.30 stop at $40.27
Short 2 units Lehman ticker LEH @ $43.70 stop at $47.46

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