Seeking Alpha

Robert Edwards

Robert Edwards
Send Message
View as an RSS Feed
View Robert Edwards' Comments BY TICKER:

Latest  |  Highest rated
  • Short The Russian Stock Market By Buying RUSS, The Final Trading Day Of Every Month  [View instapost]
    RUSS closed Friday, October 30th at $31.66. I did not buy then, but I did buy during the day Monday, November 2nd, at $30.80, just a dime above the buy price I had the previous Friday, where I made a nice scalp. I only bought 100 shares so now that we closed at $29.77, down $1.89 (6.0%), I will buy more on further weakness to average down and get out on a rally back above $30.00.

    Recently RUSS fell under $30 and stopped at $28.36, rallied to $32.52 in a couple days, fell in 2 days to $26.86 but in 8 days topped at $33.59. I should have no problem getting out on a small rally.
    Nov 2, 2015. 05:54 PM | Likes Like |Link to Comment
  • UWTI Keeps Slip Sliding Away So What Do I Do Now? [View instapost]
    Good question, Grow! Unfortunately, you cannot predict where UWTI hits on the top end, until one calculates where we go on the bottom end. Right now UWTI is around $9.50. If we should rally from here, then a move from the mid $40s in crude up to $130 would be a triple. In the triple leveraged UWTI, you would get a 9 fold gain. However, one would need to calculate slippage. If we are in an upward trajectory, little slippage would occur. If it took 18 months to hit these targets, I would anticipate slippage of no more than 20% every 6 months. Over 18 months, you are left with 80% times 80% times 80% of what you would have without slippage. Multiplying (.80) X (.80) X (.80) you get .512. That would mean you would hit about 51.2% of the nine-fold gain you would expect without slippage. So instead of going up nine-fold, UWTI would pop from $9.50 to about $43.77.

    Now suppose we drop to $30 and then do the rally. At $30, UWTI would be at a starting point of only $2.38. Then if we hit $130 in crude oil from the $30 price, you are talking about an increase of 4.33 times. In triple leveraged UWTI, it would go up 13 times, to about $30.94. However, due to slippage, you would only get about 51.2% of that gain, so UWTI would only be trading about $15.84.

    These calculations show that you want to get long when UWTI is at the bottom. The lower you go initially, greatly affects future price possibilities.
    Oct 25, 2015. 05:51 PM | Likes Like |Link to Comment
  • UWTI Keeps Slip Sliding Away So What Do I Do Now? [View instapost]
    One thing to add. In the worst case scenario above, I allowed myself to hang an additional 2000 shares of UWTI at $6. If I did not hang those shares I would have an additional $12000 shares to buy when UWTI hit $1.50. In this new example, I would have $12,500 invested at $12.50, and $24,000 invested at $1.50. The same $36,500 would now own 17,000 shares, at an average price of $2.15. For UWTI to move from $1.50 to $2.15 is only an increase of 43.3% in UWTI, or a 14.45% increase in $30 crude oil, back up to $34.35. A move of only $4.35 is a slam dunk with odds of occurring well over 100%, if such a thing was possible!

    So, in conclusion, the secret is to not hang shares if we should fall to $40, or $35, and get all the way down to $30 where you get to a slam dunk!

    If you waited for $35 to go all in, UWTI would be trading at $2.25. You could buy 10,667 shares using that extra $24,000. Your $36,500 would have purchased you 11,667 shares at an average price of $3.13. A move from $2.50 to $3.13 would be a gain of 87.8% in UWTI, translating to a 29.3% increase in crude oil. Crude oil would have to rally from $35, up to $45.24. Quite doable, but not quite a slam dunk. Going "All In" at $35 requires a 29.3% rally to break even, but waiting for $30, one only needs a 14.5% pop. Both are nearly a sure thing but the 14.5% gain could take a week or two, but the larger 29.3% gain could take a month or two. With crude oil, especially at these give away prices, a gain of 50% in 3 days is probably quite doable so I would not be worried in either circumstance.
    Oct 24, 2015. 02:16 PM | Likes Like |Link to Comment
  • UWTI Keeps Slip Sliding Away So What Do I Do Now? [View instapost]
    I think I have come up with the solution to my dilemma. If we rally back up towards $50, which is highly likely, then no problem. But if we should break under the $44 to $43.50 support, then what? Well, if we should fall all the way down to $40, that would be a further drop in crude of 11% which would drop UWTI 33%, from $9.50 to about $6.35. But with some slippage, we will drop it on down to $6.00.

    Crude oil spent 3 1/2 weeks trading in a range of $44 to $48 before popping up towards $51 in December Crude Oil recently. If we should fall to $40, we would surely at worst trade in a range of $40 to $44. So if I would buy more UWTI at $6, say 1000 shares, my average price between $12.50 and $6, would be $9.25. To get UWTI to move from $6 to $9.25, it would have to increase in value 54%, so crude oil would have to go up 1/3 of that, or 18%. From $40, crude oil would have to rally back to $47.20. Quite doable, but not a slam dunk.

    But since I waited to add my shares till I got a price of only $6, instead of adding 1000 shares, I would add 2000 shares for less money than I spent on the original 1000 shares at $12.50. So when you average 1000 shares at $12.50 and 2000 shares at $6, my average price of UWTI would now be lowered to $8.16. That is a 36% rally in UWTI, or just a 12% rally in crude oil. From $40, crude oil would have to rally back up to $44.80. Now that small rally should occur almost immediately.

    Now suppose we do not get even a $4 or $5 rally off the bottom because the bears are correct that we are going much lower. We should at least get a $2 to $2.50 rally from $40 to $42.50. I could then take profits on the low shares and use that to rescue part of my losing position. Do this a couple times from lower and lower levels, if diligent, I should be able to eventually come out whole regardless of how weak crude oil gets.

    But is there a way I could still be a loser? Yes. If crude oil dropped to $30, after I bought 2000 shares at $40, without ever rallying to let me out, that would not be good. From $40 to $30 is a 25% drop in crude oil. That would cause a 75% drop in UWTI, from $6 to $1.50. Now at that point, I could buy 8000 shares of UWTI for the same money that I bought 2000 shares at $6. That would leave me with 1000 shares at $12.50, 2000 shares at $6, and 8000 shares at $1.50. I will have spent $12,500, $12,000 and $12,000, for a total of $36,500. Dividing that by the 11,000 shares that I own, my breakeven price in UWTI would be $3.32. For UWTI to go from $1.50, an additional $1.82 to reach $3.32, it would be an increase of 121.3% in UWTI. That translates to an increase in crude oil of 40.5%. From $30, crude oil would have to rally back to $42. Since we have already seen similar rallies in crude oil much greater than 40%, I have little doubt that crude oil would indeed rally from $30 to $42, especially since the consensus by the most bearish prognosticators that crude oil should move up $5 per year, and no one believes crude oil will stay below $50 long-term. However, a fall this great would not be very fun, and would require extreme discipline to manage. Very few would have fortitude and patience to ride this one out, if crude oil should indeed fall all the way down to $30 without having any significant bounces.

    Fortunately the drop to $30 that I described, without having any bounces at all to allow for selling of low priced shares at a profit, to raise cash to continue to lower the breakeven price, is not foreseeable as a viable option under any circumstance. No market goes straight down without any rallies, an especially not crude oil, a market that has extremely high open interest.

    What it does point out, is that if one is going to play triples, they need to buy a little on all dips while partially selling on all rallies, to constantly improve the position so that the breakeven price is always dropping. Also it points out the necessity to divide your money into 3 tranches and invest 1/3 initially, another 1/3 when you are down 50% and the last 1/3 when you are down an additional 75%. And with that, I wish you all good tidings of joy. It won't be that bad.
    At $30, UWTI would be trading at I would be in suppose crude oil should fall all the way down to $30?
    Oct 24, 2015. 01:52 PM | Likes Like |Link to Comment
  • Why I Am Long Natural Gas And Will Be Adding On Any Weakness [View instapost]
    Will do a gold article this evening. Check back.
    Oct 1, 2015. 07:22 PM | Likes Like |Link to Comment
  • Buy Gold On Friday's Weakness [View instapost]
    As long as 1100 holds in gold, should work higher towards the 1180, 1190 or 1200 area, click
    Sep 25, 2015. 06:59 PM | Likes Like |Link to Comment
  • Still Like Buying Dips In Crude Oil (UWTI), And Especially Like The Poor Man's Crude Oil (The Canadian Dollar) [View instapost]
    Good comments, I totally agree. Not that bearish on the stock market in here and like buying XIV below $25 and really like it $22.50 and lower. Stock market is just undoing the rally we got going into the Fed announcement. Both the stock market and crude are going sideways with ultimately resolution to the upside as most likely path.
    Sep 20, 2015. 04:32 PM | Likes Like |Link to Comment
  • When The Rubber Band Snaps, Gold Springs Big To The Upside, Not Down; Fair Warning To The Bears! [View instapost]
    Well, we were sitting around 1117 area when the Fed announcement was made and popped to mid 1130s, with rally above 1140 on Friday. If we can get thru 1140 nicely next week we should retest 1170 and thru there you have 1200. In any case, gold stocks got nice recovery last couple days as I have been recommending loading up on IAG and KGC below 1.50.

    For all of next week, looking to buy any and all dips in gold as we should close up 15 to 30 dollars or more by next friday.
    Sep 18, 2015. 11:47 PM | Likes Like |Link to Comment
  • Goldman Sach's Bearish Crude Oil Call Is Extremely Bullish! [View instapost]
    Well, as gold retraces to 1140 area with no rate increase by Fed, we got nice bounce as expected and looking for more next week. For next week, all dips in gold should be buys as we try to retest 1170. If we break thru 1170 could hit 1200 next couple days.
    Sep 18, 2015. 11:44 PM | Likes Like |Link to Comment
  • Goldman Sach's Bearish Crude Oil Call Is Extremely Bullish! [View instapost]
    Another trader looking for higher crude, with $65 target click
    Sep 12, 2015. 07:32 PM | 2 Likes Like |Link to Comment
  • Looking To Buy Gold And Gold Stocks As We Bottom By Thursday, September 10, 2015 [View instapost]
    We could break on down to 1000 or below but I am thinking that it is less likely since we stopped last time around 1072 and will be hard to fall under 1050 before we see another nearly $100 rally.
    Sep 9, 2015. 11:37 AM | Likes Like |Link to Comment
  • Has Crude Oil Bottomed And Where Is It Going Next? [View instapost]
    Good to hear from you Grow. Here is an article that also agrees that oil cannot stay cheap forever, click
    Sep 6, 2015. 11:31 PM | Likes Like |Link to Comment
  • The Stock Market Is Not The Only Ugly Looking Chart Action, Just Check Out Gold! [View instapost]
    They are in the process of bottoming but it is too soon to say commodities have bottomed for sure. I think gold retests the lows one more time and makes a marginal new low towards $1050, at minimum. Crude oil finally bounced in dramatic short-covering fashion popping 20% in just the last 2 days, but it too is now just at the beginning of a bottoming process and could also still make new lows. It is time to scalp from the long-side but not go all in yet as it is too soon to call a bottom.
    Aug 30, 2015. 05:52 PM | Likes Like |Link to Comment
  • For Now, December Gold Under $1150 Is A Steal! [View instapost]
    Saw an options action article about GLD options is very prescient, as they are looking for another 4% move up in GLD over the next 2 weeks, to add to the 4% gain already seen.
    Aug 21, 2015. 10:16 PM | Likes Like |Link to Comment
  • Crude Oil Is At Critical Support And Should Bounce Shortly, But ERX Has Already Bottomed! [View instapost]
    I want to give a shout out to Rik Patel, a member of our Short Bull Traders WeChat Chatroom, who made the suggestion recently to look at ERX. In looking at the various ETFs and ETNs, ERX definitely has the best looking chart. This is one of the advantages of trading with others and sharing ideas in a Chatroom. Come join and learn and share!
    Aug 17, 2015. 10:25 PM | Likes Like |Link to Comment