Managing Risk

How long do you ride this wave? Do you surf it all the way to the glory overthrow? How long can the liquidity push this market? The dollar has reached oversold territory dragging the market and commodities to higher and higher levels. The real question though is how can the market NOT continue to rise as long as POMO remains with QE2 until June? Does the greatest trading floor ever assembled allow the sheep to just sit and collect long until the end of POMO? It’s a simple enough plan but without another nasty correction how do their traders rake in end of the year bonuses. After all they set the curve and have the key’s to the castle. Do you want to be a bagholder?

My advice here remains the same. As we enter territory where you technical indicators on many of your holdings are showing a strain on you MACD’s and RSI’s. Why test fate? You’ve made some coin this year. Why be greedy here? Sure….we may get the blow off for your sell signal, but what’s wrong with taking a little profit here? You can still have positions in the miners and PM’s like PSLV and PHYS. The physical papers will take less of a percentage correction. Look at last summer….it might be similar. Energy stocks are needing a correction too. SGY NBR HNR WPRT GMXR HERO would all look nicer cheaper. I still have positions in HNR and GMXR.

Gold and Silver may very well push to 50 over the next two months. So I still like a core in the PHYS and PSLV. Trading the miners intraday or by swing trading with a reduced core makes more sense. SSRI and SLW need a week of correction before I get back in.

The biotech spec craps aren’t affected by this overall market and if you want to look at one that actually has earnings an looks tasty here….ANIK. They’ve knocked it down and now they are taking it up………maybe…hehehehe. gl

Read more at Great Depression 2