GPR.TO Great Panther Exit -- Small hedge in SDS (S&P 500 2x bear ETF)

GPR.TO I have been talking about a few days before I entered into a small position on Feb 16th.  Technicals looked good and silver started to make strong moves.

This stock has easily the 7-8 dollar potential that AXR.TO and EDR.TO have.

Currently however I decided to pull the plug on this trade as the stock appeared overextended with RSI at the 87.67 level, Slow Stoch dipping below the 80 line and with the macd making the second leg of a momentum bid.

Volume as you can see is declining on the stock, which confirms the assertion that the momentum might fade in the short term.

As you can see the exit is at 3.84 and the stock closed at 3.94, which could indicate a loss of potential upside.  However, the risk at this level is a bit more than I wish to take on.

I will look to buy back in at a test of the 20 day moving average which is at 3.62 but climbing rapidly.


I took a small position in options for SDS which is a 2x bear ETF.

The option has a strike price of 22.00 at a premium of 0.30 per option with an expiration March 19th

The rational for this trade is a possible impulse wave to the downside on the S&P 500 which equated to a impulse up for the SDS (inverse to the S&P500).

Ideally the previous low will not be taken out which was the 23.6% fib level (retracement).
This means the S&P early tuesday will fall.  Silver and S&P500 have been over the medium term been correlated relatively well.  However, Silver corrected at the start of the year while stock markets continued to climb ever higher.  We have just seen the first significant break in the S&P500 where we have broke the 20 day Moving average.   So as both were up today i decided to take a small position as a bear for the overall markets.  If silver / gold / platinum / rare earths move up with the general markets this option will expire worthless.  However if it is Silvers turn to weather a storm from the overall markets there is potential that the market collapses with silver and gold to continue strong.  in this case the option will be profitable with overall silver position also accumulating.

With the Libyan situation affecting oil, US housing market and employment continuing to show weakness, with Ben Bernanke testifying in congress tomorrow on economic outlook, other commodities pricing making new medium term highs there is plenty to be pay attention to over the next few days.


New position in AVL.TO - Avalon Rare Metals
Talked about this stock since September.  It is one of the few rare earth metal plays in North America and the stock shows its extreme strength recently.

I think there is a classic cup and handle pattern developing.  The way I counted this wave structure, the expectation is that a a move to $10 is possible within the next couple of months.



A Small plug for an Android Widget that I check at least 10 times a day.

Kcast by Kitco which I use to display intraday gold, silver, platinum charts.