I've got a little trepidation about doing this as if I'm honest right now, it's going to make me look pretty dumb, at least at this instant. I need to find a way to more easily redact my account numbers at TD Ameritrade as well, or risk having someone hack my accounts, I'll look into that further.
Dumb moves of late, just to get the ball rolling. After some "too good to be true" recent gains, I've just sold a lot of BTE (about a thousand shares worth, a big position for me) and PALL. Both had "glitched" and gone down a percent or so in heavy volume, often a sign a bigger selloff is in the cards. Both, of course, are up a couple percent this AM, so I got off the boat a little early.
On the other hand, 9-10% gains...back in the bank...that's how you do well. Or at least how I do. We can have some good discussions (arguments) on another thread on philosophy about this.
The slower, buy and hold type crowd would certainly laugh up their sleeves at that move and even I realize it was a mistake. It was that "too good to be true" feeling in my gut that triggered the sale at the slightest twitch, as I'd gotten that in a very short time, and even the best stocks "rest" or "consolidate" after a good quick run more often than not, so I was playing the odds.
BTE is one I consider a "best in class" stock. It's a fairly small Canadian oil/gas company, small enough that almost anything can move their price, it appears quite well run, and I've been trading in and out of it since the end of the last crash. This one is a "who knew", as when I started trading it it was in the $12 range -- that would have been better to just "buy and hold" at least for this duration, as it also pays a nice dividend, in the 5% annual range, but split up so it pays monthly. The Canooks take tax out of that before I see the money, but still not bad at all. But "who knew"? Not me, though if you hit me with a clue-bat enough times I'll get it. I fear this particular one is near the end of a long glorious run, but (as I won't say as much since it should be assumed) I could be wrong about that. I feel oil has to make a move soon, and it could be either way. But look at the consequences. With oil at 110/bbl right now, if it goes up, there goes the world economy in short order, again. If it goes down (I think more likely) perhaps to 100 or 95 range again, all the oil stocks will follow. It just doesn't "feel" like oil can sit where it is. So in two out of three possible cases -- going down or sitting still, oil will be the place not to be in the near term, though it's been great for the last few years.
PALL (palladium) is used in auto manufacture for the catalytic converters and is a pretty nifty precious metal anyway, which is catching some of that wind in its sails. However, recent events have make auto related things a little dodgy. In fact, the reason I had such a nice gain on it was the fact that recent events caused it to go "on sale" for awhile, so I bought some, then staged in another buy as it seemed I'd called that entry right. And I did -- the question is going to be, did I call the exit right, and honestly, I don't know yet.
Here's a chart:
As you can see, there have been a couple serious downdrafts, in Feb and Mar, and that latter one is where I bought. PALL is thinly traded and gaps a lot between days and within days, it's not for the weak stomach out there. But we know it's essential for autos (and hydrogen purifiers) so it's not going away until autos don't burn gasoline, which is going to be awhile. I see though it gapped right up this AM, it's going back down again -- a considerable amount of success in short term trading of this one is being on the ball -- It will do these odd things for just a few minutes, until the "real" value is established. It seems not to attract too many traders to smooth out the prices immediately. In other words, my kind of roller coaster stock! The big boys and hedgers will bring it to true value, but evidently they are doing their trading manually and they are slow, perfect for a guy like me, who can kind of judge what that value is going to be, and make my own moves accordingly -- but just a little quicker.
Here's a chart of BTE over a similar timeframe.
Same thing -- took a dump in middle of march, then zoom again. You can see the glitch that triggered me to dump it, after all, I had some thousands profit on a 2 week holding of about 1k shares, or about $54k at risk. That's enough that even I get nervous, it's a big position for me (I normally trade in #10k "units" and that was more than "all in" of 4 units). And "too good to be true" almost always winds up being the case, so I took the money and ran. That alone was enough profit to run me for about a month after all, and that's what I'm doing -- trading to eat. If oil stumbles, I'll be right back in there, as the dividend alone (which I captured) is pretty nice, and it goes up nicely most of the time as well.
For both of these, I look at futures to determine some timing input. I use ino.com to watch those. You can get all the futures by clicking on the markets tab, then selecting metals (if you do metals, and I do) or whatever. Nice free service. I've found that oil of course affects BTE, and PM's in general affect FCX, for example. Looking at the prices for the various month out contracts can be a leading indicator of the price of the stock that deals with the resource in question. Sometimes it goes the other way, but this is at least some "edge" in the grand game. If you see a spot price much higher than the futures prices -- spot's probably going back down, or the futures are going up -- they have to match on the date of the expiration of that future. And the vice is versa, so it's a nice tool to plug into your decisions.
Time will tell if those moves were right or not, but in two weeks I made about 2 months living expenses. That's good enough for me! I don't always do that, of course, and there were some losses elsewhere which I'll get into as things go along, but right now, time to go pay attention to the other things I still own, and to see if there's something I should be buying right now.
I've recently increased my holdings of TBT and TMV, which are going up with treasury interest rates. I predict that at some point, QE is going to wind down (they say June, but many guess that won't quite be the end), and that will make government debt go up in interests, which is bond prices falling when Ben stops buying 70% of our issued debt -- who is going to pick up that slack?
Those are short-term holds -- they are those crazy leveraged ETFs that trade futures, rebalanced every day, and they have a "built in loss" due to fees and rebalancing. No matter what people think about other things, these and other like them (FAS, FAZ) are NOT good to hold long term, long. Short, the fees and decay help you...the game can only be rigged one way or the other!
So, one might go short FAS rather than go long FAZ, for example, if you thought things were going that way.