FXE, EEB, CRIS, DJP, SLV, QQQQ, DIA, SPY. We told you so….


The list above is only a partial one.  It is a list of issues we have recently disrespected, sneered at, denigrated and bailed out of. Add to it EEB, NYC, and TBT.  And what about GLD and SLV (as we have said we are hedge these, or radically lightened up).

If you had shorted them (or at least sold them) you would be in Hawaii right now enjoying your ill-gotten gains.  Especially if you had shorted FXE — and especially if you had done it in the currency market.

Don’t think we’re excessively proud.  The market got some of our profits too.  And changing, gear shifting markets are no fun for anyone.

So this is probably a good spot to talk about waves in equity.  We are always talking about waves in stock prices and how their lows can be used as Basing Points.  Up and down waves occur in equity also — as inevitably as the sunrise.  Back when we were running money in the commodities markets we saw equity downwaves of 30%.  Think that will get the attention of the clients?  It will also burn out all your neurons.  If you take it seriously.  One of our most esteemed colleagues use to say during these periods, “You have to remember.  It’s only sex, drugs and rock and roll.”

So if your portfolio equity is rocking and rolling remember it is absolutely natural.

BUT BUT BUT.  Don’t sit on issues in a downtrend.  That way lies madness. (Also bankruptcy.)  If the Basing Point stops are violated pitch them.

If you have an issue in doubt send us an email.  But first look at it and ask yourself if you know what we would say.  If you do you don’t have to send it.  You just have to grit your teeth and do what the ruler and the Basing Points procedure tell you to do.  Let us point out that the reason investors find themselves in agony and conflict like this is because THEY DID NOT CALCULATE AND ENTER A STOP WHEN THEY PUT THE POSITION ON.

This Post Has One Comment

  1. alain

    thank you. Even as perma bear, I may warn to be over confident from being short – unless one is able to spot and act quickly on reversals. The new primary move has yet to be confirmed as such.


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