It was mentioned a few times that asset classes don’t stay in their “Range” forever, and eventually they either need to break out or break down. The consensus here on the KER blog and many other investing sites that utilize technical analysis was that the Dollar would bread DOWN out of it’s range.

Some of the regular guests that come on the KER all felt the dollar would stay in its range and business would continue as normal. This is because they didn’t see any fundamental reason for the dollar to drop lower, and they thought it would bounce at 92. That isn’t what happened, because the price action technically was more powerful than fundamental news.

The fact that Mnuchin finally came out, along with Ross BTW, and the Chinese decreasing their buying treasuries, and the debt ceiling debate last, week and about a dozen other things all contributed, but there doesn’t need to be a “Silver Bullet” fundamental reason for price action. The price action, chart set up, and the trading momentum are all the reason one needs to forecast the pricing.

That is why many of the technicians on here already saw the H&S pattern set up in the dollar and nailed the move into the high 80’s months ago (before any of these fundamental “reasons” were ever cooked up or happened).

The renewed strength came even sooner than I thought! 😮

On January 18, 2018 at 5:30 pm,
Excelsior says:
Do you think a short term JDST position could be in order for a tradeable short?

Reply to this comment
On January 18, 2018 at 6:25 pm,
Matthew says:
Yes, but I’d be ready to get out soon. It also makes sense as a hedge if you are very long the sector and nervous.

I won’t be betting against the space here but I did eliminate all but a tiny bit of my margin debt yesterday. Otherwise I’m still all-in.

Yes it did. I was expecting the $1340-$1350 area to swat Gold and the miners back down for a week or two.

Thank goodness I never pulled the plug on JDST, but I did strongly consider it on Friday the 19th. I just hate taking a position in any leveraged vehicle over a weekend and opted out after thinking about a conversation with Brian here on the KER back in the spring of 2016 where I decided to hedge with JDST. He wrote back and said/asked … “JDST ?? When that trade moved against me hard it wiped out some of my gains during that run and I felt like a big dummy… So, once bitten, twice shy. I had 1 good JDST swing trade in 2017, but in retrospect I should have done more last year. If one is wrong-footed on those triple-leveraged inverse trades then it can move against an investor pretty quick. Unlike a miner it is more challenging to wait that out if the decay sets in during sideways channeling.

I decided to just trim back the position size in a number of miners and move it over to cash and put it in a few blockchain companies too. On Monday & Tuesday I did add back to a few of the positions. In addition I am still sitting on some of the cash at present.

Because of the cash and moving some funds over to the blockchain/crypto I’m now down to a 85% allocation to PMs but I’m more comfortable (less nervous) with what I have in place now.

Of course, when there are surges like today in some of those companies then there were about 4 that I wish’d I let the whole thing just role, but I thought we’d have more of a breather before heading higher.

For me it was about risk management and easing my mind, and I still have plenty of exposure to whole swath of mining stocks to keep participating in any extension to this rally. I also bought one stock back at a slightly higher price because I wanted a bit more weighting in it.

I’m not sure what the net result of all this will be in a few weeks, but I feel pretty good about the positions that I have in place right now, and today was a nice green day for my portfolio.

Thanks for being willing to bounce ideas around, as it is very easy to second guess one’s strategy, or a chart, or a sector. I value the feedback. Ever Upward!

role = roll