Paul Mosgovoy

Long/short equity, special situations, momentum, contrarian
Paul Mosgovoy
Long/short equity, special situations, momentum, contrarian
Contributor since: 2013
Company: Three Ten Trading, LLC
Over the past two weeks or so, we continue to see the DJUSCL and the KOL reaching new lows (although less so the KOL).
The point to watch from a technical perspective is which stocks are NOT following the continued wipe-out.
To put it differently, we are now seeing divergences (most going lower but some others actually beginning to move higher) here at what looks to be a bottom and possibly the bottom.
The best divergence thus far (the one with the least participation in the continued down move) is WLB. Next in line is CLD (of the U.S. based producers).
In a bull market, the leaders typically respond first.
In the case of Uranium, that leader (or one of them) is CCJ.
It is interesting to note that CCJ, UUUU, URZ are not responding in the same way as UEC. That represents a non-correlated move in UEC.
Non-correlations are an indicator of a fractured market. Fractured markets are not healthy.
The Uranium bull market was being touted years ago as a "sure thing" with the end of Megatons to Megawatts.
Still waiting.
Good work on the article.
Technical chart indications on WLB may be found at this link:
The 30-level is critical for WLB. A breakout above this level while maintaining its upward momentum will be a significant positive on a go-forward basis.
It does not hurt to get a "buy" recommendation out to the market to help nudge/push WLB above this important level.
Next week's action will be interesting.
Good work on the article.
Here is a link that addresses WLB from a strictly technical perspective.
If WLB makes it above (and holds) the 30-level, and does not break its established trend-line, it is currently rising at about 600% annualized (from the 3/17/15 low to current levels).
That puts it at 50 buy mid-summer and at the top of a long term trading range (in the 75 area) by the fall this year.
We will see. However, the charts themselves indicate that WLB is a different animal than the rest of its battered coal mining peers.
I plan to modify the report in the link above with new charts that will include a more recent technical picture.
If I may request, please review my LinkedIn profile and decide if you would like to be connected to my network. I would appreciate you being on-board.
Excellent straight-forward comments as only an engineer could deliver.
I am interested in establishing a LinkedIn connection with you.
Please review my profile and decide if you would like to be on board.
Best regards,
Paul Mosgovoy
Technical analysis of BTU price action can be found at this link:
The last 5-minutes of trading this past Friday included some very heavy volume (2.5 mil shares) to the up-side.
Thank you Chris,
As I write this, TZA is now at 15.00. I may have missed the counter trend move by one day as it appears that today may be the completion or it may be the start of another up-trend.
We will have to see how the day ends.
Just as a reminder, I am not publishing regular updates on Seeking Alpa (as of last Friday).
My market posts are now on LinkedIn and will be much less frequent.
If you would like to connect, please send me a request at:
Thank you for your comments.
I am pleased that my updates are helpful. Thank you.
My position with IWM is on a longer time-frame (weekly and monthly). On those time-frames, there is no exit signal (according to my method). Therefore, the position in TZA is being maintained.
It is a little frustrating to see the trade oscillate. However, there may be the possibility of a big (unexpected) down move. I want to be sure to be in position if that takes place.
The SPY might have a short bounce to test the underside of its recent break. If so, the move might be brief.
My own experience is that I have found the SPY to be very frustrating to trade. It is probably the most heavily computer controlled (traded) index and therefore, I tend to stay away.
Obviously, others may be better at the SPY than I am.... :-)
Thanks again,
Thanks for the question Lulzasaur,
I will be posting an update before the end of the day.
The short answer is no but it has started to get complex which is one of the reasons that I tend to stay away for relying on Elliott Wave.
I will provide my view of the count as well as a chart that shows that we are in a trend-line test.
Thank you for the comments.
To start off, I should say that anything can happen in the markets. The IWM may indeed stabilize and move higher. If it was to do that, it would most likely give clues to us before that move began in earnest.
At the present time however, the trend is still down. A penetration to the up-side of today's high at 112.23 would call the down-trend into question. We will see how it goes.
At the same time and for reasons that I do not want to reveal while still on Seeking Alpha, I have decided to move to a different venue (LinkedIn) effective 8/15/14.
You are welcome to request a connection with me via LinkedIn. My URL for that site is here:
I would welcome (and accept) your request.
Thank you again for your comment and interest.
Best regards,
Paul Mosgovoy
I appreciate the question/comment.
Time-frame is different for everyone. In the case of the Russell 2000, if it continues to hold at this level or lower, then it will post a monthly reversal bar and potentially an out-side-down monthly.
I have included a link below that shows the result of the last two outside-down monthly reversals.
My own preference is to not be exposed to such events (or be positioned short).
We still have a few more trading days to go for this month. What appears to be at least possible at this point is a monthly reversal. We will have to see if by next Thursday we are out-side-down.
Please stay in touch.
Thank you,
Excellent link to a potentially sleeper article that contains this gem:
"Unfortunately, none of the valuation ratios help us determine the path the market will take in producing these anemic returns"
Then again, they direct the public to more "fundamentals" to further confuse the situation.
If I might add another link to another post that shows the identification of a (and maybe the) reversal in the Russell 2000.
Of special note in the link above is the complete lack of "fundamentals" that helped to identify the trend change.
Best regards,
Good article on the growing disconnect that will most likely end badly (and maybe already is for some sectors).
While the major indices continue higher, the Russell 2000 has already reached its high (maybe THE high) and has rolled over. This is called "thinning out" (an observation that may have been first noted by Jesse Livermore), where there is a mirage of advancement while the structure underneath erodes.
It would make sense that the small caps would be hurt the most in the next down-move.
That move may already be underway.
Let's see if it gets to 104.
If an employee is part of a hedge desk operation at one of the various gold-miners, they have access to 100-oz. of gold (if they need it) to offer up if the futures contract goes to settlement and delivery.
If they are part of an investment house/trading firm that is selling futures, they most likely do not have the physical product to deliver and will close out the trade (or roll-over) prior to settlement.
Good Chris,
I am planning on staying in for a long as possible. I am very busy and so do not have time to work the smaller moves.
Nice that you are in the green on your trades.
It is Latin.......... and is translated "And you also Brutus?"
In the Shakespeare play Brutus was a close friend of Caesar.
The article means that the oil sector is also turning lower and signalling that we may be in for deflation instead of inflation.
Hope this helps.
"Tu" being the familiar address in french. Otherwise it would be "vous" Am I right?
The Latin used Tu..... or at least that what Shakespeare wrote. :-)
Glad you liked the reference.
USO is continuing on lower.
Futures contract positions indicate who is buying/selling. Commitment of Traders (NYSE:COT) reports.
At this point in time (today notwithstanding), the professional traders are heavily short (expecting a decline) in both metals.
Tas 2010,
Interesting post.
You may find the updates on gold at the following link useful to you as they mirror your thought process.
I am interested in your research.
If you would like, I can review the Bloomberg link and the technical condition of the diamond miners.
Do you have the ticker (symbols) available?
More information on the potential staying power of this down-move can be found here:
Thanks for the comment,
I am aware of the bottom and it did factor into the determination that the push above the high may be a top of significance.
The character of the bottom was different than previous bottoms in the IWM. What that difference was is a bit of proprietary knowledge.
I would think that you probably have your own "in-house" tools that are used to help clients. Same with me.
We will see if it works out as anticipated.
Even if it does not proceed into a significant reversal, the trade is well in the green at this point. Stops are frequently discussed on any positions taken and the current stop is equivalent to this week's high in the IWM.
If the short position begins to erode, I will most likely exit with a profit before the stop ever gets threatened. Then it is back to the sidelines to re-evaluate.
The entry and potential exit uses the same techniques as the masters that are referenced on the site.
Thanks again for identifying an area that I needed to clarify.
A fully documented short position in IWM can be found here:
It was not a perfect entry. However, the "top" call was correct to the day if not the hour.
The short position (and analysis) was determined using techniques that are literally 100 years old.
The commercial speculators are selling heavily into this current rally.
That is a fact, not an opinion.
"The gold and silver markets are displaying a classic example of the interaction between commercial and retail traders. Another way to look at this is the battle between professional and amateur traders." Andrew Waldock (formerly of Lind-Waldock)
One source of frequent (sometimes day-to-day) analysis of the gold and gold related markets can be found here:
Note: Waldock quote used with permission
There is an alternative view. Feel free to contact me and ask any questions.
If you are interested in a more "technical" look into the markets, the information at this link may be of some help:
Although I have not published a recent report on the gold market as a whole, I do have (blog update) analysis that has been published on the GDX.
Good work,
In the green by the close is highly important.
It was a big reversal today for GDX and DUST. Tomorrow might open and test that reversal or just keep going (lower for GDX and higher for DUST) from here.
Sometimes after so much volatility, the market will congest for a few days. Do not be surprised to see DUST do nothing for a day or so (maybe longer).
I would suggest that an absolute stop location for DUST is today's 14.21 low.
With such a big reversal, there has to be a lot of demand for GDX to make another high. That seems to be a low probability at this time.
Well done,
We will have to watch the TZA low of today at 14.73. If the IWM is in a powerful reversal, that may be a place to put a stop.
Tomorrow may give more clarity.
Thank you,
Good question.
In the early stages of his trading, Livermore was a technician of sorts (keeping his "dope book" as he called it) and relied on his intuitive sense as well.
This type of trading is good (if one has the skills) for short term moves. It is obvious that he did indeed have the skills but like all of us had some other problems to work out.
Eventually, he decided that his real talent came by looking at the overall market situation and deciding if there was going to be a significant move up or down.
As you know, he would establish a large position early in the move and then "pyramid" if he so desired.
The Panic of 1907 (which I have researched) was just such a move. Livermore determined early on that because of general conditions (there was no fractional banking back then and only a limited amount of cash available at any one time) that there was going to be a crash.
Of course, he did not know before-hand the extent that the move would go. No one does.
At the bottom or near the bottom he covered his shorts and cleared around $1,000,000 (silver/gold-backed money):
The same technique is being used on the IWM position.
The general (business) conditions are very poor for the smaller capitalization stocks. Those conditions are not likely to change any time soon.
The entry in TZA over the past week or so is in concert with the thinking that the small caps are going to be hit especially hard relative to the rest of the market.
Of course, this move may not be "the one". However, with each passing day and with each technical level threatened and then breaking, it is starting to look as if we are in for a least a move of significance.
Thanks again for the question.
Feel free to contact me again.
Good morning Krzysztof,
You made a nice profit. It is good that you have 1/2 left.
Today looks like a huge gap-higher open for TZA. My research says that this move might go for a long time (3 - 6 months), so I want to make sure I use the opportunity.
I have my full position and will be looking to take more opportunities as they come.
TZA may go as high as 16 before it retraces. Or, it may just keep going with no pull-back at all. That is the problem with big moves...........sometimes they just keep going and do not let anyone get in.
Nice to hear from you. I hope that these updates are helping.
Thanks Chris,
This could be the start of a big move..............