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October 8, 2008

Pale Rider

I don't think much changed today except that central bank antics delayed the markets from printing a near-term bottom for a session or two. The late sell-off was a snub to the coordinated interest rate cutes around the globe, and the indices closed looking mighty pale. I'm still keeping an eye on the SPX 950 level as the potential launching point for a mega bounce. I do NOT think 950... or whatever level from which a bounce may materialize... will mark a long-term low, but rather just a vicious countertrend move which will find my book loaded back up with shorts.

As for today's moves, I took advantage of early weakness to pick up stakes in some commodity-related shares: GDX, CF, EAC and XIDE, and I kept all but CF for overnight holds. The late strength shown in these issues, particularly GDX and EAC, was encouraging. If the market can find its feet in the coming hours, I think these stocks will explode higher. I don't talk much about individual stocks on my blog, primarily because I rarely trade them. However, I opened my equity chart book today so I could scale my long position in smaller increments than those offered by futures contracts.

Speaking of futures, gold and silver posted solid gains for the second session in a row. I don't know. I still can't shake the feeling that precious metals will be victim to more liquidation, but at some point the charts may force me to open a trading position. I have the will to be patient since my core metals position is intact.

Well, no charts today. Not much has changed and besides, I need to unwind a bit. Until tomorrow...


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