Autumn's Contrarian Ideas--Fourth Update

The return since opening the latest contrarian trading portfolio on Sept. 25 is now a modest 0.9%, with the big gains being made in iShares Silver Trust(SLV Quote)), and in trades between the leveraged oil and gas exchange-traded funds of Ultralong Oil & Gas ProShares(DIG Quote) and Ultrashort Oil & Gas ProShares(DUG Quote).

To see the third update in mid-November of the contrarian trading portfolio click here. Idea No. 1 -- Buy Natural Gas This position was closed on Oct. 30, with a loss of 11.6%, until it was reopened with a buy at $9.10 on Nov. 12. Currently, the position is still open with a gain of 8%. Idea No. 2 -- Buy North American Energy Production; and Idea No. 4 -- Buy Corporate Bonds; have been closed previously and will remain closed. Idea No. 3 - Buy Silver The position in silver was established to try to take advantage of the ratio of the price of silver to that of gold, which is below historic averages. Gold has actually done better than silver since late September (SPDR Gold Shares(GLD Quote) is up 18.6%, while silver is up 13.6%). I have decided to make a reflexive move on this position -- potentially the most dangerous kind of move --and sell SLV on Monday and buy Ultrashort Gold ProShares(GLL Quote). In the GLD chart that follows, it can be seen that all the customary technical indicators are supportive: moving average convergence/divergence, relative strength index, price trends and moving averages are all trending up. The price chart has been in the upper half of the Bollinger band for three months. The only negative feature in the chart is the size of the price drop on Friday. The two previous drops of a similar size in the past three months didn't result in a price reversal. Will the third time be different? Making this move now is a reflexive bet that this time will be different.   Loading Comments...   < Previous 1 2 3 4 Next >

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