Riding The Gravy Train: March 2007

Riding The Gravy Train

Beating the market is fun and profitable. This is how we do it.

Friday, March 23, 2007

selling PLE

Due to a close below the support level and a lack of positive news, we sell PLE to limit the loss to 15%

Uranium is at $90, poised to rocket even higher and soon over $100 we believe.

Gold, silver, and platinum will break above their ranges to approach new highs this Summer in our estimation, unless US markets attain and move beyond February highs.

Enjoy this good article, The Slow-Motion Stock Market Crash

Thursday, March 15, 2007

adding RH



Red Hill, ticker RH in Canada is +23% since called last August.

To us it appears poised to climb further and we hope significantly, thus we add to our position.



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Thursday, March 08, 2007

accumulating AVL, buying CDU, adding PTCH

The market is due to pull back and consolidate after the bounce this week, but we're comfortable adding holdings in stocks that have been strong performers during the market chaos of the past 10 days.

We hold Avalon Ventures, AVL on the TSX Venture exchange, and will accumulate further holdings under $1.50 The longer-term chart is very bullish in our view, and so too the company's prospects. The volume on this stock is very low, yet it holds its gains without volume selling emerging despite poor markets recently. Readers may be familiar with Hammond Power, HPSA on the TSX, which fits this description and we can only hope for similar gains with Avalon. In situations like these, we often see a strong run once volume comes in and we feel that's especially likely should the stock break over the long-term resistance at $1.50

We're buying Cadero Resources, CDU on the TSX. The long-term chart is very bullish we feel, providing the $2.00 level is held. Here too we believe are good prospects and we're especially encouraged to have seen this stock go up during these recent markets. Again Hammond Power comes to mind, and again we can only hope for a similar result with Cardero.

Patch International, PTCH on the OTCBB, is another favorite of ours which we hold at a +126% gain since our entry call here in August/06. We now add to our position based purely on its recent strength and what we believe is a stong possibility of breaking over major resistance at $2.50 to run with luck to the $3.00 level and beyond.

Learn more about these companies via their websites :

Avalon Ventures
Cardero Resources
Patch International



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Tuesday, March 06, 2007

selling HPSA addition +23% in 2 weeks. covering L, WN, and CFC. buying BAY, MGA

We're selling the position we added to HPS-a on February 19/07 for a 23% gain in just two weeks.

We still hold our core position at +136% since called October 13/06.



We expect a market bounce thus cover some short positions to secure the gains. The gains are minor, but they served us well as intended hedges for such market action as we saw this past week.

Covering L, Loblaws, on the TSX for an 8% gain since called August 2/06.

Covering WN, George Weston Ltd., on the TSX for a 5% gain since called August 2/06.

Covering CFC, Countrywide Financial, on the NYSE for a 6% gain since called August 7/06.



On the long side we go bargain-hunting for good uranium sector companies. The shares we sold last week to lock-in big profits have dropped considerably but not yet as low as we'd like before re-entering so instead we go :

Long BAY, Bayswater Uranium Corporation at $1.61

Long MGA, Mega Uranium Limited at $5.58


Click to visit :

Bayswater Uranium Corporation

Mega Uranium Limited



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Thursday, March 01, 2007

selling SAN +251%, EMC +151%, UEX +71%, URE +57%, SGC -12% and shorting ERTS

Some selling to preserve profits. All these trade in Canada :

SAN, Santoy Resources for a gain of 251%
Originally called almost 7 months ago on August 7/06

EMC, Energy Metals Corp for a gain of 151%
Originally called 6 months ago on August 28/06

UEX, UEX Corporation for a gain of 71%
Originally called 6 months ago on August 28/06

URE, Ur Energy Inc. for a gain of 57%
Originally called 4 months ago on October 23/06

SGC, Sunridge Gold Corp. for a loss of 12%
Originally called 3 months ago on November 22/06



We are not bearish on these companies but we see major downside in the charts of these stocks before their long-term trends and support levels are reached, at which time we may re-enter. Sales such as these provide us with the capital to do so if the time comes.


Here's how the action represented in this blog, started in August 2006, now tallies :

Before this post there were 19 sells noted. Of those, only 4 were losses. The average over all 19 sales was an overall gain of 25% The average loss was -14%. The average gain was +35%

After the sales noted in this post, the average gain of stocks sold will be +41% (based on today's closing prices) with 5 losers out of 24 sales.

The stocks held before these sales are up an average of +40% After these sales the remaining holdings will be up an average of 27%, not counting dividend gains or our profitable calls on gold and silver.



Our plan has been stated for some time to lighten-up on holdings going into what we expect to be the start of a long down-trend in the general markets this spring. We believe that yesterday will, in time and with the benefit of hindsight, prove to be the first clear indication of it.

If the broad market rally continues, we've got plenty of good holdings and will continue to realize gains. However if yesterday's collapse resumes and continues through March then we'll be glad to have booked the gains represented in these holdings we're selling. A win/win situation.

We note that extreme moves like Tuesday's are often followed by a minor move in the opposite direction, which we did see in Wednesday's weak bounce, then another major move in the initial direction which we expect to happen Thursday. We also note that often when a month starts with an extreme move, that direction is likely to hold for the rest of the the month. Ergo we are not bullish on March, especially given that the extreme gains we've enjoyed the past 5 months mandates consolidation if not retraction.

The Canadian markets we expect will fare better in the long run than US markets, but for now both markets are extremely overbought and we believe there is a lot of easy gains and margined holdings to be shaken out. As noted above, we may re-enter some of these stocks in time but for now we are happy to step aside.

Looking forward, in the general markets we expect a trap rally to levels circa last week's highs at best before a new bear trend emerges. However those who follow the DOW as measured in gold or most foreign currencies will know that this is actually a continuation of a bear market that began in the spring of 2000, but when measured in the collpasing US Dollar it appears as if the US markets have rallied in past few years. Click on this text for an illustration and explanation.

Back to our main point here, a small rally would serve to shake out the amateur shorts who may have piled-on at yesterday's lows and will also trap the overzealous bulls who would buy in at very high levels. That's the ideal time to short, and if the markets do break to new highs then perhaps cover with tight stops for minimal losses. That's the cost of doing this business.

It may prove a bit premature, but in case there's no continued bounce at all we'll add to our short holdings a position in ERTS on the NASDAQ market at $50.42. We feel that the chart looks right for it, and if the economic fallout is indeed finally happening we believe that frivolities such as video games and video game consoles will be among the first expenditures to be curtailed. This also fits into our standing plan to increase short positions. We would likely cover over $60.

We remain gold, silver, and uranium bulls.



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