adding FXP

In this post dated December 04 2009 we announced buying FXP, the ProShares UltraShort FTSE/Xinhua China 25 ETF. Adjusted for subsequent splits, that entry price is $37.30

We wrote : "Its downtrend does not yet appear to be over, from a technical perspective, so in case it drops significantly we're planning to add to our holdings rather than stop out. Our thinking may change on that, but for now we feel increasingly certain that a turn in the global markets is imminent."

Global markets did turn lower and just 6 weeks later FXP was 43% higher. However we're looking for even bigger gains by shorting China, so we took no action and by summer 2010 that position was in the red as markets reversed again. Shame.

The good news is that now the 2-year downtrend is finally broken for FXP (also true of BZQ, another effective short we favor), so we add to our FXP holdings and if it should close below $24 we'll sell all of our accumulated FXP holdings.

FXP closed today at $27.90

BZQ closed at $16.26


We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

Goldman Sachs Share Price Signals Danger

So far this year general equities markets have been going up without the financial sector participating in the rally. "So far."

Friday the financials began to fall faster. Click this text for a link to the details.

Below are two charts of Goldman Sachs, the first for the year-to-date and the 2nd is a 4-year chart (since the bull market top in 2007). The other financials have similar charts.





Typically this sector leads, or at the very least provides a great deal of support, for general equities markets and investment sentiment in general. These charts do not illustrate supportive price action or positive sentiment.

Possibly it doesn't matter and it's different this time. Possibly Goldman's chart will make a "double-bottom" pattern around this price level, relating to its lows of last summer. Possibly, and we think probably, not.

Given the silver collapse in progress and global markets being very overdue for some correction if not a bear market resumption, those going unhedged and unconcerned in light of these very bearish signals do so at great risk we believe.

For a little over 2 years now any monkey could point to almost any stock ticker or commodity and pick something that would multiply the money invested. Some would argue that's a good thing. What is inarguable is that all good things come to an end.

We like AAPL short, last at $335.22 and bidding to cover on any close above $356

Those more aggressive may consider inverse levered ETF products such as FAZ, QID and BZQ. Of course the great volatility and thus inherent risk in these must be factored, and prudent stops & exit strategies must be determined and respected.




We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks or companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.

buying UUP

We've done well with currency speculations in this blog. We recommended UUP/DRR in Nov. '09 which in 6 months returned 16% and 59% respectively, then URR in June '10 which returned 23% in 2 months.

Today we go against virtually everyone, as usual, in buying UUP the ProShares Double-Long US dollar Index ETF. The standard caveats regarding levered instruments apply of course. No stop, as of yet.

For the next while we expect, generally speaking, to see markets and precious metals going down and the US dollar going up.

Those hoping to snag cheap silver as a long-term holding will wish to wait a few weeks and seek a price in the mid-low $20's. Aggressive speculators may try something in the mid-$30's, possibly as early as today and with an advanced understanding of the concept of tight stops and re-buying if need be. Those who bought recently in the $40's, especially the high-$40's, are completely reckless and extremely unlikely to ever make money via speculating. Readers of our paid service were warned stridently about an imminent silver crash late last week, at the exact top. The silver futures contact has had its biggest 3-day decline in 28 years, so please let's not pretend this is "a dip".

Below is an excellent chart of HAO (see last update, this blog) which we are pleased to share with you :



Will the current market and precious metal swoon affect HAO? Possibly, but all that really matters is the chart. It is a red flag that this stock did not rally late last year when most Venture Exchange stocks were on fire, but currently HAO is drilling and hopefully promoting as their situation is compelling. They might even find something significant, though the chances of that, as with all such ventures, are near-zero. Perhaps precious metals will double again in the next few weeks, taking related stocks up with them, though the chances of that are less than near-zero. Allocate accordingly as always, or just keep an eye on it for fun. We're in with a large position.



We receive no remuneration, encouragement or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or for mentioning any stocks, trading ideas & strategies, or companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.