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Support hold for SPY, EEM, GLD, SLV

May 06, 2011 9:56 AM ETSPY, GLD, SLV, EEM
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Seeking Alpha Analyst Since 2009

First off, I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is debt, and running straight though a global economic model that is based on a premise of infinite growth in a finite world. This won't end well. I'd go a step further and suggest that our materialistic value and belief system is another way in which we're building castles on sand... but I digress. I view that markets as a casino, and frankly, I like gambling. So I rather enjoy the game, and love reading Seeking Alpha and anything that feeds my appetite for knowledge and insight. I prefer technical analysis to fundamental analysis because I find the "behavioral" side of investing more interesting than longer term projections based on numerical analysis. I believe in micro-caps. I believe the market rewards growth above all else, and growth is easiest and most explosive when a company is young and small. As a company matures, its growth inevitably slows. Microcap stocks tend to be extremely volatile so I believe strongly in taking profits on the way up (or exiting quickly if the entry point proves poor). I attempt to buy stocks that are pulling back in the midst of a longer term uptrend. I hold anywhere from hours to years, but usually in the 3-6 month range. I committed every investing cardinal sin between first entering the markets in 1999 and 2002, losing 90% of my money. Since then, I've found an approach that works reasonably well for me. My average return has been about 25% annually since 2003.

At least for the moment, support has held for a variety of riskier assets.  I'll highlight SPY, EEM, GLD and SLV - all of which held at support with today's bounce.  The S&P held at the top of trendline over which it initially broke out earlier this month.  

The Emerging Markets (using EEM as the proxy) held at the trendline over which it recently broke out.

Gold and silver also held at support.  Silver came all the way back to the trendline that started with its initial upside breakout last fall.

Gold held at its 50 day moving average, and appears to have now regains its uptrend line.

So at least for now, it looks like "rally on" is in order.

 

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