KennethShaw.se

Just for fun I thought I would start taking news reports from around the world, change the main subjects and in a parody kind of way show the world through my own eyes. What I mean by this is: Treat others the way yourself would like to be treated.

This will mainly be based on politics and the like as I find myself to be rather neutral on the issue, so just to put a different spin on current news items I am just changing a few key words.

Keep in mind these are articles written by professional journalists with link to the original article. I just make a parody of them

CHINA (Reuters) – The Chinese military said on Wednesday that a new aircraft carrier strike group had arrived in the Gulf of Mexico and that another was on its way to the region, but denied any link to recent tensions with the U.S. and portrayed the movements as routine.

The shift in the powerful Chinese naval assets comes at a moment of heightened tensions with the U.S, which has threatened to close the Panama Canal - the world’s most important shipping lane – if China and Iran sanctions over its nuclear program cut off its exports.

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I know it’s been a while.. I promise I am still very active in the markets but these markets have not made it easy to profit from them I suppose somebody who spends all their day in front of a computer screen staring at charts would be more successful than I in these markets, but I enjoy having a life outside the markets as well. In anycase the volatility we have been experiencing since february 2011 has not really relented. These markets are brutal and I imagine a lot of people are barely breaking even (I’m optimistic here). For me it has actually been a pretty decent year 2011, with nice runs in MCP, TNA, TZA, Gold and Silver; These few wins have more than compensated for all my small losses. 2012 is looking positive so far and I will discuss some small strategy changes I have been working on over the last couple of months that I believe will prove quite usefull in 2012.

To say the least this market has been tricky.. In my last post I wrote about moving over to cash, while I have gotten buy signals I simply can’t play this market in the typical fashion. I don’t believe there is enough fundamental data to give me the confidence to go all in. I have changed my strategy a bit and so far it is working perfectly.

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Just got back from my little mini vacation up in Norrland (northern sweden) Was suppose to be a fishing trip, ended up being a summer cottage trip and visit different friends. Would have rather gone fishing, but I truly enjoyed myself none the less. I am working on a new piece, a much longer piece here for my blog with regards to the stock market and how it attracts the scummiest people on earth. All the major scum of the earth piles on in the stock market, everyone trying to rape everyone. But I will save that for a later day. Right now I will just give a quick update here as nothing has really changed; which means my positions are the same.

As you know I started buying AGQ at 188 with a 2ATR stop at around 160. That trade has played out well, now AGQ is trading at 254. A nice gain, I moved my stop a little tighter to about 245 now as I don’t see the point in giving back that big profit. Also, I pyramided at 210, so total profit right now is around 35% for a week and a half.  Not bad considering the market. I also bought a sizable position on DGP after the last mini correction in gold. I figured the raising of margin is only a good thing for the price increase. Now only the big boys can play. My portfolio is about 50% invested in those two positions and the rest in cash. I have not seen a follow through day yet so I don’t dare buy any stocks.

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As I stated in my previous posts; I always wait for the follow through day. This is absolutely necessary. A follow through day is a second consecutive day of high volume gains in the markets. This confirms that the markets trend has, atleast for a while changed. We saw this most recently last week where the markets crashed hard, only to rally big. But if you look at the chart, the markets rallied but the volume sank. This could be one of two things: either the small amateur money was thinking they could get some nice deals on stocks, or well, there really is no or here. Maybe some value funds came in and bought up some shares here and there, but in general the buying was minor and the selling was major. The funds were pushing up stock prices to sell to amateurs.

As always I follow my rules without hesitation. My rules have made me money, while following intuition or gut feeling has always lost me money. My intuition was telling me” jump in! these markets are cooking”, while my rules where saying “lets the losers lose, wait for the follow through”. So I waited for the follow through, it never came, and my cash is safe. Well, I bought AGQ as I describe last week which has given me a decent 15% so far. Moving my stops pretty tight there, I also have gold which isn’t doing anything. Again, a tight stop.

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Money Management:

This post is for those of you that want to make monster returns, consistently.

In all my firms I never allow more than 5 stocks to be held at any one time. These stocks must absolutely be the best stocks on the market. Most of the time I never have more than 2, and if the stock is really hot I can have all my chips plus margin on a single security. I don’t recommend this for everyone, but for me, it works.. However I have a system that I truly believe in as well. By keeping no more than 5 stocks in my portfolio, I force myself to find the best performing stocks. I filter out the losers and allow myself to the possibility for amazing gains. I simply can’t afford to get lazy and hold on for a -30% decline. It quite simply forces me to be truly tuned in with the company and the markets.

To accomplish this though, I have to practice a strict money management approach that will keep me in the game even when the stocks go against me. Many people don’t even know what money management is, they figure “If I buy 30 stocks I’m well diversified, thus I cannot lose to much”. This is not money management, this could best be described as lazy. When I purchase a stock I always know exactly how much risk I am willing to take on each trade, and when to double down.

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I love watching the business channels for a good laugh! On down days it’s all about computers, financial crisis, Obama slavery, confidence, profit taking and so on. Up day’s everyone is happy, talking about recovery and how the markets are now acting how they should. It really is very enjoyable, unfortunately most people make their buy or sell decisions based on these programs. I like warren buffetts idea of having MSNBC on but in the background on mute. I find this to be a good solution to keep from being influenced by them. It’s amazing that the people who usually sit there screeching have never made any money on stocks.

Anyway, as I said yesterday I think the crash is over, or atleast it wont be going lower than where it’s been. The question is where do we go from here? are we going to be range bound for a while, trendless and hard to profit? Or do we go right back where we left? I think we go back to where we left off, which means there is a bit of rally left. However, as I explained yesterday wait for the confirmation rally. Which should be today. If we get one more heavy volume up day today than I am in.

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Quick recap, quite fun to write these small articles.. Not sure if anyone reads them, but they are fun none the less. Anyway, markets again crashed, but I think this correction is about done. If you look at the charts for Dow, sp 500 and even Sweden’s omx, they all say the same thing; Yes we crashed, but were bored of crashing now, we can’t go much lower. (no new lows made on the crash) Time to start moving up. As I said in my last post, I will wait for a confirmation day before I start buying, this way I avoid selloffs like yesterday.

Anyway, seems my play on AGQ (2x silver) was a nice move, I am moving up my stop from 160 to about 180. Not pyramiding here as silver is a very volatile commodity; I will wait for a pullback before I start buying. Not my normal strategy, but commodities need to be played with a little more caution than stocks on an uptrend.  Also, I will not be buying anymore TZA as I don’t see a clean downturn in the foreseeable future, unless of course it gets a lot worse. But I don’t see that happening.  My play in DGP has also been playing well. I am waiting for a pullback here as well.

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Okay so republicans are screeching like little school girls when the markets crash that it’s all Obamas doing, yet when they’ve rallied the last 3 years that’s just the markets despite Obama? Honestly I am not repub or democrat, I think politics is such a selfserving game and the people who play only have one goal in mind; To undermine the opponent and win. I just get tired of how abused, violated and mistreated the Righties seem to be, if you watch Fox news enough you would think they get manhandled on a daily basis. Anyway, it doesn’t really matter what I say, most politically engaged people don’t realize the hypocrasy of their own arguments.

Now that I have vented a little lets discuss what happened yesterday.. Markets rallied, I was stopped out of TZA pretty early on at $61. I put a stop really tight there because I figured either the market is going to correct more, or it’s about done. I didn’t want to give up my gains, so I placed a tight stop. After my stop, I placed a new order for AGQ (2xsilver) this was more just to see what would happen. I placed a nice position with a 2 ATR stop which put my stop at about $160. My entry price was $189. I would like to get back into the actual silver contracts but I figure I’m a vampire and me and silver don’t get a long to well  Long story short, I have made a lot of money on silver, and lost equal amounts. Gold has been much nicer.

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