Some of my favorite names have been swat by the Bear! Quite unnerving to lose 16% of your entire portfolio in one week. It has shaken my confidence in a couple names to survive the headwinds of a bear market and paralyzed me from buying the names I have conviction in. It happened so fast that I wanted to wait and see how long the selling would continue.
Today there was furious buying and I'm afraid that, perhaps, I have missed the bottom of the dip. Now I am in the position of waiting to see if this is a real rally or just a bull trap. One name I was watching, CLR, jumped by 20% today! I had been watching this stock form a high and tight flag and today it broke out to the upside in a seriously fast move. So fast, that the order I had to buy options on...I cancelled. The b/a size was 1/1425! It seemed that there were a lot of sellers wanting a profit and I backed off. This was before noon when the gain was only 12% on the common and 163% in the option! The stock continued to rally all day.
CHK was also interesting this past week. It lost 20% of it's market cap on outstanding news! After touching 74 it sank to 57.72 in four days! I would have bought at 55 but it has already turned. Is it too late? I'm not sure at this point.
I have resorted to saying it is too hard for an amateur right now, so I sat on my hands. There has been too many sad stories of people trying to bottom fish in this market, that I wanted to conserve my cash for more red tape to tick by. I currently have over 20% cash right now and about 10% gold and silver.
I'm leaning to consolidate my positions to only my very favorite (CHK, POT, RIG) and reassess. I would like to add gold/silver and perhaps a new position in SLB.
One final point. FannieMae and FreddieMac are likely to require intervention by the Fed. This, in my opinion, would be highly dilutive to the dollar and therefore bullish for oil and gold. Some of the big institutional banks are still teetering.
