Tuesday, May 11, 2010

GLD

Just as the Basket of Income stocks seem to perform better with a wider trend setting, so does GLD.  Below is the GLD Trend Model (7/4.0) using the wider volatility setting of 4.0, meaning fewer trades and longer trends:
GLD Daily Trend Model 4.0


The most recent trend change was from SHORT to LONG on April 5th @ 112.49.  GLD closed today at 120.65, for a gain of about 7%.  May at-the-money calls would have moved up about 200%.  As I just pointed out to my subscribers, both GLD and SLV provide excellent leverage in their underlying options....when you get the direction right.

A

11 comments:

Stan Trenton said...

Hi Allan,
As a practice for your own trading,
and considering the time frame that you're using to trade,
do you generally look to adjust the volatility setting
so as to create fewer trades with a higher probability
for a win and that you hope will result in longer trends?
Thanks,
Stan

Stan Trenton said...

Hi Allan,
No need to respond to my previous question above.
I see that you've already answered it in your last post
under "A Chart With No Name" on May 10.
Thanks,
Stan
---------------------------------
Re: ATR parameters

I am using 7.0/2.0 for most all charts, with notable exception of Income Stocks which use 7.0/4.0.

I'm pretty sure it doesn't matter all that much over the long run, so pick the multiplier that triggers a frequency of trades that fits your trading style.

If I were starting over, I'd probably opt for a 3.5 or 4.0 multiplier for all stocks, fewer trades, but less management needed.
---------------------------------

Camp Day 8-18-08 said...

All ALLEN

You had a great write up on SRSR last yr. Maybe you can do another followup. There has been much talk that SCOTT the ceo will announce a jt venture and the stock will go to .50 this yr

Allan said...

SRSR ran from my recommendation at 6c to 20c in less then a month last summer. Yes, sometimes I scare even myself. Now its back to 4c, not for the faint of heart. I'll take a look under the hood and report back if I find anything noteworthy.

Allan said...

Re: ATR Settings

Stan, it's mostly an ease of management consideration, which is being won by the wider setting, 4.0 in almost all time frames.

t said...

from a blog follower....

Wednesday,May 12,2010
Biotech basket update.

received Patrick Cox's biotech newsletter update alert today.

In it, he states,quote,

"...I unabashedly consider BioTime (BTIM) and ISCO the two most important companies on the planet; even in History."

Investors take note.
I own both.

Anonymous said...

perhaps thats why isco gaped up today
i own it too

Anonymous said...

Hi Allan,

Can you update us with news concerning NNVC?

There is a lot of dialogue on IHub which frankly, I don't understand.

This is one post from a contributor.

It appears that NNVC gets the money upfront, at the initial closing date. So that's not a bad thing. It also appears to me that this particular financing arrangement will be over in less than six months--60,000 shares every two weeks, with a total of 500,000 shares to be released (these are Preferred (B) shares) would indicated that the shares will have all been released within five months. Whether the financing company is going to be dumping these on the market remains to be seen. I'm not sure of the number of shares of common stock this translates into so I'm not sure what kind of pressure this will put on the share price. Yeah, if I am the financing company it could be in my best interest to keep the share price low so I control more shares, but if the plan was to liquidate the shares as I received them then I would want a strong share price to be maintained, thereby ensuring a steady flow of returning capital. So, this could, in some fashion put a governor on the share price for the next five months, barring developing news, but after that, if the company hadn't sold the shares I would think they would want the share price to go up. Of course, tangible news should trump the finance company's external pressures. So we wait and see. Hopefully we look back a couple of years from now and recognize this was a necessary evil (especially in today's tough economic and financing climate) and we all have profited from our investment and our patience. At least that is my plan.

Hope I am not out of line in asking you.

Allan said...

Re: NNVC

I just posted some initial thoughts in a new blog. You did set forth a well thought out and written analysis and as I learn more, maybe I can address some of the issues you raised.

This financing pales in comparison to the ramifications inherent in treatment and cures of viral-based disease. I am focused much more on a multi-billion dollar market cap, perhaps 100X current valuation. That puts the terms of this deal in proper perspective, keeping my eyes on the real prize ahead.

A

Anonymous said...

Watch out with GLD. See the prospectus.

Excerpt from the GLD prospectus on page 11:

http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus.pdf

Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.

Allan said...

Speaking of Risk factors, here are only some of the risk factors for Apple computer taken from their latest 10K filing:

Item 1A. Risk Factors

Because of the following factors, as well as other factors affecting the Company’s financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

Economic conditions could materially adversely affect the Company.

Global markets for personal computers, mobile communication devices, digital music and video devices, and related peripherals and services are highly competitive and subject to rapid technological change. If the Company is unable to compete effectively in these markets, its financial condition and operating results could be materially adversely affected.

To remain competitive and stimulate customer demand, the Company must successfully manage frequent product introductions and transitions.

The Company faces substantial inventory and other asset risk.

Future operating results depend upon the Company’s ability to obtain key components including but not limited to microprocessors, NAND flash memory, DRAM and LCDs at favorable prices and in sufficient quantities.

The Company depends on component and product manufacturing and logistical services provided by third parties, many of whom are located outside of the U.S.

The Company relies on third-party digital content and applications, which may not be available to the Company on commercially reasonable terms or at all.

The Company relies on access to third-party patents and intellectual property, and the Company’s future results could be materially adversely affected if it is alleged or found to have infringed intellectual property rights.