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Saturday, December 15, 2007

The Week That Was

Seems like there are a lot of people on CNBC, especially the ones with a bullish sentiment, that are pissed by only a 25% Fed basis cut on Tuesday along with the "surprise announcement" the day after. Although I'm just speculating, I think the Fed wanted to catch shorts off guard on Wednesday to add fuel to the bull run. However, the $40 billion injection is rather meaningless so the selloff is justified. I shorted again by buying FXP at $68.90 and cashed in during the highs of Thursday at $77.97. Also on Thursday, I began building a position in FRPT anticipating a short squeeze rally and that turned out very well for me if you read my other post. Mid-December tends to be a temporary bottom for the precious metals before it ramps up into the New Year. As a result of this 40-year seasonal study, I double downed in WGI.TO at $3.30, FR.V at $4.43, and got back into IV.V at $0.54. The rising inflation should be a good catalyst for these stocks.

At the close of Friday however, I made some rather questionable decisions. I picked up a little bit of CMZ (Compton Petroleum) at $9.02 which had gapped up on news of an acquisition. The stock has been in the toilet and I guess I bought it as a momentum play for Monday, but I don't see much upside in hindsight and the stock is traded rather thinly. Perhaps I would have been better getting back into FRPT as a continuation play. I'll take what I can from CMZ and be done with it on Monday unless there is a good surprise for me to luck out on. The other iffy purchase was FXP at $79.22. Even though several support levels were broken today on most indexes, I'm getting a feeling we might reverse back up on Monday. If that is the case, then I might have set myself up for some pain by purchasing this hedge. Considering most of my stocks are commodities and inflation driven, it does not make sense for this to be a hedge play. I'm hoping for a spike down in the market so I can get out with a profit on this trade. Cash would have been the best option looking back now.
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