Pailin's Trading Corner

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Sat, Dec 17, 2011 - 12:42am
ghost
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massive volume spikes in a

massive volume spikes in a bunch of jr-mid level miners, check out AXU, AG, UXG, and others... wonder what's up.

Sat, Dec 17, 2011 - 2:31am
Abraham Bernanke
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Do you make the best trades / investments, check here>

We tend to look at the brash and confident as yardsticks for investment success, and the meek and mild as the losers. But Mr Nicholson says the relaxed and the docile are the most suited to investment success, while the overly aggressive are at a disadvantage.

Mr Nicholson brings the whole investment game to a confronting level. Are we ourselves suitable as investors? It is all about how you react to events and handle risk.

Marcus Padley, a stockbroker at Patersons Securities in Melbourne, Australia, and author of the share market newsletter Marcus Today, agrees that the alpha male broker has long been deemed an investment failure in stockbroker circles.

"All that shouting, swearing, phone slamming, rude, uncouth, belligerent, coarse, egotistical and crudeness is not, contrary to Hollywood generalisation, the sort of personality trait you want in a broker," says Mr Padley, who wrote about the topic recently in his column in The Sydney Morning Herald.

Mr Padley warns that in falling markets, the tendency is to believe that the investment landscape has changed and that investors have to be doing something differently. A lot of people, he says, have made the mistake of finding alpha by moving straight into highly leveraged derivatives. "Stick to what you're doing - but whatever you do, stay in for the long haul," he says.

The game is not to sell and disappear and never come back, he adds. It's OK to stay on the sidelines during volatility, but at some point, a tremendous low - such as those experienced in March 2003 and March 2009 - will occur.

"Hang on the sidelines and cheer every collapse," Mr Padley says. "Look for that low and come back in. But don't change your spots - we're being set up for a fantastic buying opportunity. It may not be today or in six months, but it's going to happen."

Are you psychologically suited to the share market? According to Mr Nicholson, you are if you are a patient long-term investor. Pleasant and patient people are the best investors, he says.

Even if there has been a major event, such as the global financial crisis or the current problems erupting in European debt markets, an investor would be better off retaining his or her pleasant and patient temperament throughout it, rather than attempting something completely radical and new.

Derivatives and highly leveraged instruments, such as contracts for difference, should be avoided when the markets are volatile.

People, says Mr Nicholson, come in three general temperaments, each with two extremes (unpleasant or pleasant, arousable or unarousable, submissive or dominant) and the eight various combinations of those three basic investors are exuberant, dependent, relaxed, docile, hostile, anxious, disdainful or bored.

It turns out the relaxed (pleasant, unarousable and dominant) and the docile (pleasant, unarousable and submissive) are the most suited to investment success and anyone with an unpleasant or arousable personality is to be avoided.

It sounds like the best person to invest with is the kind of man you'd be happy to walk into battle with, someone who, to paraphrase Rudyard Kipling, "can keep his head when all about him are losing theirs and blaming it on him".

Mr Padley agrees. "You want someone laid-back, reliable, emotionally stable, cool under pressure - someone with that Dunkirk spirit. Someone pleasant without being obsequious, agreeable without being subservient and decisive without being overbearing."

SWAGER on. Silver - Wine - Art - Gold - Energy - Real estate
Sat, Dec 17, 2011 - 7:26am
Sycee
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My take on it is. It could go

My take on it is. It could go up or down from here, but it will definitely be higher than $30 in 2 years. And trying to day trade in this market works until it doesn't. We're entering a sustained period of very high inflation so whatever, I'm buying.

Sat, Dec 17, 2011 - 7:49am
pailin
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gold chart

Here's your bounce off 244 (green) and 260 (blue) DMAs, last tapped April 2009 at high 800s :)

Be careful - don't be so cheap you miss out (read Rico above) and have to start chasing at 1755 (again!).

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Sat, Dec 17, 2011 - 9:09am
Abraham Bernanke
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A funny for the weekend but true never the less

Economics for beginners -

How The Greek Bail-out works:


It is a slow day in a little Greek Village . The
rain is beating down and the streets are deserted. Times are tough,
everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is
driving through the village, stops at the local hotel and lays a
€100 note on the desk, telling the hotel owner he wants to inspect
the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the
visitor has walked upstairs, the hotelier grabs the €100 note and
Runs next door to pay his debt to the butcher. The butcher takes the
€100 note and runs down the street to repay his debt to the pig
farmer. The pig farmer takes the €100 note and heads off to pay his
bill at the supplier of feed and fuel. The guy at the Farmers' Co-op
takes the €100 note and runs to pay his drinks bill at the tavern.
The publican slips the money along to the local prostitute drinking at
the bar, who has also been facing hard times and has had to offer him
"services" on credit. The hooker then rushes to the hotel and pays off
her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note
back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the
stairs, picks up the €100 note, states that the rooms are not
satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything.

However, the whole village is now out of debt and
looking to the future with a lot more optimism.
And that, Ladies and Gentlemen, is how the
bailout package works

SWAGER on. Silver - Wine - Art - Gold - Energy - Real estate
Sat, Dec 17, 2011 - 9:14am
redwood
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The market is anemic.  It

The market is anemic. It requires transfusions to stay alive right now, but its basic condition is frail. Periodic transfusions are orders of the day. One before year end is scheduled, but it will be a moderate transfusion, certainly not one to restore full health. The patient is weak, it will gasp for air for a day, a week, but its convalescence will need nurturing. Timing of transfusions, the ultimate challenge.

Perhaps come spring, when the warm rays of the sun will penetrate deep layers, and the invigorating effects of prevailing winds revive, will we see some equanimity, some clarity of the patient's condition. Until then there will be much agitation, wringing of hands and preoccupation with the inertia and pallor of this clinical case.

Sat, Dec 17, 2011 - 10:06am
atlee
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good stuff

I enjoyed reading the corner this morning.

It is tough to see the near term bull here. As easy as it is to see the bear, I wonder why we are still above 29.

My call for next week is the markets will fluctuate. I do not have a good feeling as to which direction we go. If you trade, roll with the punches and don't fight the tape. I am neither bearish or bullish at this juncture. I am flat over the weekend except for a beginning position in NGD and EXK at around 9.50

During the NY session, I feel like I have a bulls eye taped to my back and they are just waiting for me. I am trading like a banshee and making tiny profits in these choppy markets.

Globex is easier to trade but I grow weary of vampire hours.

Maybe it is time to take a break. Just buy some physical, enjoy life and stay tuned.....Nah, no way!

But I am not taking any more than a trading position until things become clearer. As inviting as these lower prices appear, they can be trap doors. I will nibble at some miners and a little physical to hold and trade the paper.

"I love rock and roll put another dime in the juke box baby."

Sat, Dec 17, 2011 - 10:07am
Rico
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MUST READ!

This is a remarkable piece. It's long and arcane, but you ignore this stuff at your peril:

https://www.golemxiv.co.uk/2011/12/plan-b-how-to-loot-nations-and-their-...

Sat, Dec 17, 2011 - 11:01am
rule of law
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@Rico

Rico,

Fascinating reading. Amazing how the TBTF banks have set themselves up for a lose they win and win they win. Also, how they have boxed the politicians in by this setup. Best read on the web.

Sat, Dec 17, 2011 - 11:02am
Cú Chulainn
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Clive sides with Gartman

sees major deflation, end of bull market, silver headed to high teens--only holding on above 29 because strong support at lower boundary of head and shoulders top

Sat, Dec 17, 2011 - 11:28am
Sockeye
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Armstrong Report on Gold

This is a quote from Armstrong report. It is so good I had to reprint it here. When you drink vodka over ice, it can give you kidney failure. When you drink rum over ice, it can give you liver failure. When you drink whiskey over ice, it can give you heart problems. When you drink gin over ice, it can give you brain problems. Obviously, ice is really bad for you.

I am almost always wrong. But the fun in life is those few times when I am right.
Sat, Dec 17, 2011 - 12:21pm (Reply to #13692)
hhesse
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ties a rope to a tree and hangs the universe; a banker absurdity

Man alone; born of stone; Will stamp the dust of time His hands strike the flame of his soul; Ties a rope to a tree and hangs the Universe Until the winds of laughter blows cold.

​Always liked that ELP lyric. I have no idea what the lyrics are supposed to mean. I always imagined someone so important(ego, arrogance) that when he was hung the world died instead. Absurd, I know.

​This reminds me of fractional banking, derivatives, re-hypothecation and all that. How you ask?

Imagine two men make an outlandish bet that neither could actually pay, payable in dollars or with his life, based on the outcome of some mundane event (say an interest rate wiggle). Upon losing the bet, the loser runs around begging for money from everyone he knows "to save his life." Turns out he has a friend in politics and that friend persuades (demands) everyone chip in to save the loser cause he is just too nice.(obviously this is a fraud by the bettors against everyone else)

Now just change the names to AIG and Goldman. Derivatives should have been illegal under traditional contract law and unenforceable. In my opinion derivatives just need to be declared unenforceable. If that were done then their order in bankruptcy is no longer a concern. Derivatives are fraud at the outset. Where are our courts? OK for corporations to lobby Congress? Absurd. Where are our courts?

​Given the need for ever expanding debt, its clear why banks want derivatives. Especially in the shadows.

So the bankers have the world over a barrel with their fraud? In the end the universe won't be hung, the arrogant bankers will lose. I am sure they have overplayed their hand no matter how ugly the transition may be. Regular people just don't give a crap about this esoteric arcane intangible crap.

I hope for a political crisis the will lead to the election of a modern President Jackson. Corporate managers must be made personally liable for results.

Joe Sixpack's new brew.

Sat, Dec 17, 2011 - 12:46pm
Vypuero
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Current Trading Update 2

So far the stock trade trend/ssto has been 2.5 to 1 profitable. However it is just starting so that could be a complete fluke. Also, it IS time intensive as I view hundreds of stock charts daily to find setups. However I am satisfied so far.

I have a new idea for weekly/daily trading some futures. I will report when I make trades and if it works next week I will report on what it is. I modified it from something Alessio taught. Since my results so far have been dismal in these markets, I don't want to set anyone off on something dead wrong until I have some results. Listen to Atlee instead he has more experience and success.

I strongly recommend any beginners sign up for Alessio Rastani's emails. Very good stuff, and he seems a genuinely good guy. His partner does offer some things for sale, so maybe it is not 100% "free" but considering all the effort he makes to help people, the return can't be anything significant. If I wanted to full daytrade I would probably go for it but I want to keep my job, so I need to do swing trading instead.

I do remain bullish on metals but I don't really care now for trading - I can take either side. If I do start generating some profits again I can put some of them into physical metals and lower prices are fine then. All last week was overall bearish for metals. It LOOKS like we are finally going to get into bullish territory next week, but it all depends where the price takes us.

Sat, Dec 17, 2011 - 1:31pm
l'idiot du village
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Sometimes is good to

kick around on a piece of ground in your

hometown. Thats what I've been doing

today, figuratively speaking. My conclusion

isnt conclusive, but my feeling is I dont wont

to be hunting smallfry in a market as precocious

as this.

I dont like being in, I dont like being out. Although

gold might go down more, there is a hope that the

miners could hold their ground. I prefer gold miners

to silver miners, because silver mine investors always

distrust the silver price, no matter what it is, so that

just often seems futile (although I still love AXR).

Going to start buying small amounts of juniors that

I consider very oversold, with a view to either trading

them if they go up, or averaging down/ waiting for them

to return to break even before adding more. Probably not

traditional sound practice, but am in favour of not being

too dogmatic about what I think (if this make sense ?) .

One thing's for sure. Gold will never be as profitable long

term as McDonald's shares.

Sat, Dec 17, 2011 - 1:37pm
dirk
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Weekend trivia

Name all four and win a tip.

Where does it end? When we value a grain of gold like a grain of sand...
Sat, Dec 17, 2011 - 1:42pm (Reply to #13699)
maravich44
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@dirk. I'll..

..try. Keith Richards, John Lennon, Eric Clapton, Keith Moon. ../

Sat, Dec 17, 2011 - 2:04pm
Rico
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The Dirty Mac, baby!  Lennon,

The Dirty Mac, baby! Lennon, Clapton, Richards, and...Mitch Mitchell! The sound Clapton gets on that take with the 335 will blow the top of your head off...

Sat, Dec 17, 2011 - 3:41pm
atlee
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maravich44

Maravich44 great trivia question!

Rico!! good call man. Hey remember when you said Hendrix was better than CLapton and Clapton would admit it? You are right! I found this little you tube.

When Eric Clapton met Jimi Hendrix
Sat, Dec 17, 2011 - 3:59pm
Rico
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Great clip--thanks!  Funny

Great clip--thanks! Funny Jimi story: I remember Stewart Copeland, the drummer for The Police, telling an interviewer that the very first concert he ever went to was JH in London, when he was 14, and he says: "I was one fried little peanut!" I've never forgotten that line...

Sat, Dec 17, 2011 - 4:05pm
maravich44
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@ atlee. Please drop..

..by the Speak with some *Moonlight Mile* and play it kinda loud. 1st time I heard it was on a Soprano's episode. Thank You. / Edit: geez that guy rides like the wind. Hello DPH! any chance you might swing this tune?

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