Thursday, October 2, 2008

Goldman Sachs chart - GS


I realise we cannot short the financials, of which Goldman is a part of, although my personal opinion is that with the leverage guys like Goldman employed, the types of products they operated in, they might be more properly be classified alongside gambling stocks like MGM, WYNN, etc.

That being said we appear to have a nice looking pennant formation occurring here on GS (chart above). As with Lehman and its pennant previously, eyeballing the widest part of this volatile pennant implies a $60 drop from whatever level the lower boundary is violated. This is NOT an arbitrary number pulled out of thin air but rather a fact of life regarding the charts. They do not lie, they just take their time telling the story.

For those that remember my pennant call on Lehman, which I bring up not to toot my own horn in Jim Cramer-esque fashion but rather to remind you it's target was in fact fulfilled. I was ridiculed in emails by some readers and on Yahoo message boards by some, which is fine, tis how the world works. But like former Sec. of State Warren Christopher I would urge caution if you are a Goldman Sachs bull and feel emboldened in your stance having Mr. Buffett at your side, you ignore this pattern at great risk.


Housekeeping notes;

I was stopped out of my long GLD position at $83.50 for a loss of almost 4pts on 1 unit.

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

2 comments:

Vincent said...

sure we can't short...how about some puts?

Harleydog said...

Vince,

yes, an excellent choice. thx for reading and dropping me a note.

HD