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Robert Edwards
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Contrarian daytrading technician who specializes in micro scalping of stocks (using 1 minute bar charts), swing trading of stocks overnight, weekly stock option premium selling, pre-market and post-market psuedo market maker and stealth trading activity, and selling commodity option strangles... More
  • Robert Edwards Trading Update For May 23, 2013 1 comment
    May 23, 2013 8:18 AM | about stocks: GDX, GLD, DUST, NUGT, CLF

    GDX

    Well, I got some things right and some things not so right. We did have two days of consolidation on Tuesday and Wednesday and are now having the up Thursday that I predicted. I just don't know if Thursday is as strong as Wednesday on the high because we got a gift on Wednesday of a surge to 1410 in gold where I did predict would be the place to reverse and go short. I bought DUST 93 down to 89.75 which turned out to be very timely as I caught the bottom. I did not hold out to 100 but I did make a nice profit. When DUST allowed me to buy again in the low 94s I passed but that was also a great opportunity. I was already into buying the dip mode by then on mini and micro gold contracts. Although I did not have the action perfectly predicted I was right about buying the dips this week in gold. I bought on dips yesterday and was able to blow out in the pre-market today at 1395.20. I will continue to buy all dips.

    Peter Hug at www.kitco.com turned bearish November 2012 and began selling rallies. He has now turned more constructive. He feels it is time to buy dips and I could not agree more. I discovered last week that we have record short positions in gold futures. To get gold to fall more, the already record short interest would have to get even more extreme. Even if support at 1338 and 1321.50 in June gold is taken out, a major short covering rally will occur to bailout the bulls . That is all I need to know about the future price action for gold. I was glad to see that yesterday Peter Hug mentioned the large short interest in gold as being a bullish factor. At some point the bears have to take profits so a big rally is in our future. Instead of saying gold is a buy on dips for this week, I am now saying gold is a buy on all dips indefinitely.

    GDX closed up yesterday even with the metal closing weak. It is time for GDX to lead the metal and start outperforming.

    CLF

    On yesterday's rally to just under 22, I unloaded most of my CLF shares. When we fell back to 21.25 I began buying down to the lows of 20.73 and dumped out 21.30 to 21.44. I bought again down to 21.12 and dumped out at the close at 21.40. This morning I was able to buy a few shares under 21. CLF is acting very bouncy and I am seeing large traders come in and buy in size (I call them stoppers) so I am very bullish on this stock. However one should only keep a small core position and only buy on dips and take profits on rallies. This is a perfect scalping stock right now.

    Lean Hogs & Live Cattle

    Took profits on all short out of the money puts and calls in Lean Hogs on 5/21/13 and now looking to sell calls in August Lean Hogs on strength.

    Disclosure: I am long CLF.

    Additional disclosure: I am also long mini and micro gold contracts on weakness.

    Stocks: GDX, GLD, DUST, NUGT, CLF
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  • Robert Edwards
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    Author’s reply » Peter Hug mentioned a resistance area that gold must overcome of around 1387.50 June Gold which corresponds to about 1389 in August gold. As we approach 1:30 p.m.eastern time today which is the London close and official trading close on the charts, we are trading just above that price level, so this also which if it stays, confirms a temporary bottom in gold. GDX is pushing 28 and looks like 27.50 and lower continue to ne a buy in the gold miner ETF. The dollar is much weaker today which contributed to today's strength in gold.

     

    CLF today was a buy all the way down to 20.25 with a rally to 20.90 plus. Continues to be a buy on dips.
    23 May 2013, 01:24 PM Reply Like
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