GoldStream Capital

2011-11-04T18:15:00.002+01:00

Stopped out !

2011-08-13T19:25:00.001+02:00

Got back from holiday and saw that I got stopped out of 3 of my positions:
XLF: stop loss triggered at $15.0
BRXX: stop loss at $22.5
XLE: stop loss at $63.0

Still long in 4 trades: SLV (silver ETF), GDX (goldmines ETF), GXG (Colombia ETF) and Creativ Industrial Group (Ukrainian agricultural company)

65% in cash now !

Buying silver

2011-05-07T08:12:00.003+02:00

The price of silver fell by 30% in the last 5 days, dropping from a high of $48 per oz to a price of $34 today. I believe the long-term trend of silver is still to go up and that it is now a good time to initiate a position in this precious metal and make a "buy on the dip". Silver price had gone up too much and too fast during the last 3 months. Such parabolic rises always ends up like that. Time has come for a consolidation before a continuation of the move higher.

I bought on Friday night before the market close a position on the "silver ETF", the iShares Silver Trust (ticker: SLV on the NYSE) at a price of $34.48 for a total of $10,000.

Stopped out of URA at $15.73

2011-03-14T21:35:00.000+01:00

The Uranium ETF fell sharply today (- 17%) due to the events taking place in Japan and causing prejudice to the nuclear energy. To the contrary, equities linked to renewables energies (solar, wind, geothermal) went up strongly.

Energy ETF chart analysis

2011-03-13T10:29:00.002+01:00

The daily chart of the Energy Select Sector SPDR (the "Energy ETF") clearly shows the end of the uptrend of energy stocks. Next move? Probably a consolidation in the next few weeks.

Interesting to see what the chart of the opposite ETF says. In this case, we are speaking about the ProShares UltraShort Oil & Gas (ticker: DUG on NYSE): you make profits when oil & gas equities drop.

S&P 500 index chart analysis

2011-03-12T19:49:00.002+01:00

The S&P 500 index is currently delivering us a classic technical figure called "symmetrical triangle". The symmetrical triangle appears after a strong uptrend or downtrend and shows the indecision of investors and the fight that is taking place between the bulls and the bears. Generally, this technical figure is a continuation figure: the trend that precedes the appearance of the symmetrical triangle continues. However, the move that occurred on March 10 was an exit of the triangle to the downside after an uptrend took place. This means that the probability is higher that a downtrend is now starting.

To change my mind, I would need to see the S&P 500 index return to the 1340 price zone and then break out to the upside. But I think this scenario is unlikely to happen.

Volatility index chart analysis

2011-03-12T19:17:00.000+01:00

Weekly chart of the CBOE Volatility index (VIX):
- bullish divergence between the MACD and and the VIX price
- VIX reached the support area and started to move higher
- the scenario I have in mind? a move up

US Dollar index chart analysis

2011-03-12T19:10:00.001+01:00

Monthly chart of the US Dollar Index:
this is the scenario that I have in mind for the next few months: a move up to around 83-84.

Selling DBA at $34.42

2011-03-10T18:52:00.000+01:00

Selling today my position in the PowerShares DB Agriculture Fund ETF (DBA) with a return of +32.4% compared to my purchase price of $25.99 paid on November 24, 2009.

EUR-USD chart analysis

2011-03-10T13:55:00.001+01:00

Weekly chart of the EUR/USD:

- price has reversed at the approach of the down trendline that joins the previous highs of July 2008, November 2009 and October 2010

- I am now becoming bearish on this currency pair and expect a return to 1.20

- If EUR/USD goes above the trendline and stays there for more than a week, I would change my mind

Buying the Colombia ETF

2011-03-01T21:24:00.003+01:00

The Global X Interbolsa FTSE Colombia 20 ETF (ticker: GXG on the NYSE) is a market capitalization-weighted index of the 20 most liquid stocks in the Colombian market.
Top 10 holdings include:
- Pacific Rubiales (17.2%): natural gas and oil company
- Ecopetrol (16.1%): biggest Colombian oil producer
- BanColombia (14.9%): biggest Colombian bank
- Grupo Aval Acciones y Valores (5.3%)
- Cementos Argos (4.7%)

Colombia is one of the so-called promising "frontier markets".
The Global X Interbolsa FTSE Colombia 20 ETF is the only ETF that offers exposure to the Colombian stock market and allocates around 34% to the oil and gas industry.

Fundamental reasons to invest in Colombia:
- this nation is very rich in natural resources: oil, coal, natural gas, gold, silver, nickel, platinum
- the country has the largest coal reserves of South America and, among the Latin American countries, is just behind Brazil for its hydroelectric potential
- political stability has been gradually improving over the last 10 years with strong decline in violence and number of kidnappings
- foreign direct investment in the country has quadrupled in the past decade to reach more than $9 billion in 2010
- inflation is under control: 2.6% in 2010
- Colombia is pursuing free trade agreements with Asian and other South-American nations to export its resources, in particular oil and coal

Technical reasons to buy now:
- price has retraced to the 200 day moving average and then rebounded
- a bullish divergence appears on the above chart between the price and the MACD

I am buying this ETF today at $40.87 for a total of $10,000. Stop loss: $34.

Stopped out of UNG @ $5.66

2011-02-08T20:25:00.000+01:00

Buying Market Vectors Gold Miners (GDX) on the NYSE

2011-02-02T21:05:00.002+01:00

I am buying today at a price of $54.92 the ETF Market Vectors Gold Miners (ticker: GDX on NYSE) for a total of $10,000. Stop loss: $48.0

This ETF seeks to replicate the price performance of the NYSE ARCA Gold Miners Index. This index provides exposure to publicly traded companies worldwide involved primarily in gold mining. Main holdings include: Barrick Gold, Goldcorp, Newmont Mining, Kinross Gold, AngloGold Ashanti, Yamana Gold, Eldorado Gold, Cia de Minas Buenaventura, Gold Fields, Agnico-Eagle Mines.

I am buying this ETF to protect my portfolio against paper currency debasement and the associated expected inflation. The Energy Select Sector SPDR ETF (XLE) and the PowerShares DB Multi-Sector Commodity Trust Agriculture Fund (DBA) serve the same purpose.

See the weekly chart below: price has been decreasing to reach the 50 week moving average, which has proved in the past to be a good spot to enter into this position with an advantageous risk/reward ratio.

Portfolio update

2011-01-31T21:06:00.002+01:00

Buying UNG at $5.99

2011-01-31T20:52:00.000+01:00

Buying United States Natural Gas Fund (ticker: UNG on NYSE) at $5.99 for a total of $10,000
Stop loss: $5.70

Publish Post

Oil chart analysis

2011-01-30T18:37:00.001+01:00

On Friday, oil price (West Texas Intermediate) printed a nice bullish engulfing candlestick, at the same time crossing the 50 day moving average to the upside. The Relative Strength Indicator (RSI) broke above the 50 level. This is strongly bullish about what will happen next.

To trade oil price, buying the United States Oil Fund (USO) is one of the possibilities. It tracks what the oil price does. As you can see on the daily chart below, the move of Friday happened with a huge volume of transactions.

Gold chart analysis

2011-01-30T18:24:00.001+01:00

On the weekly chart of gold, the price has reached the bottom of the 2 year up trend-line but on Friday recovered and printed a bullish hammer. This is a signal that the decrease of gold price of the recent weeks may have come to an end. Important will be to check what the next candlestick will be on Monday. If the candlestick is bullish, the probabilities are high that the gold keeps bouncing upwards.

If gold loses support of the trend-line shown on the weekly chart, it will be a long way down to the 200 day moving average at $1280 (see daily chart below).

What will the S&P 500 index do in 2011? Cast your vote!

2011-01-29T19:20:00.000+01:00

2010-2011 Country Stock Market Performance

2011-01-29T18:13:00.000+01:00

The 5 country stock markets that performed best in 2010 were Sri Lanka (+96.01%), Bangladesh (+82.79%), Estonia (+72.62%), Ukraine (+70.20%) and Peru (+64.99%).
Since the beginning of this year, the 5 best performers are Nigeria (+12.11%), Italy (+9.83%), Spain (+9.70%), Greece (+9.53%) and Romania (+9.44%).

Chart: Courtesy of Bespoke Invest (www.bespokeinvest.com)

Natural gas

2011-01-29T16:56:00.004+01:00

Natural gas has been the most hated commodity during the last 18 months. Indeed, contrary to all other commodities, natural gas price has been in a downward trend since mid 2009.
Some signs that a bullish reversal might be on the cards can be seen on the charts below.

On the weekly chart, one can see that the down trend line was broken.

On the daily chart, since November 2010, the price has been making higher highs and higher lows.

Natural gas will be on my radar during the next few weeks to detect a confirmation of the bullish reversal.

Volatility index (VIX) and S&P500 (SPY)

2011-01-29T16:42:00.007+01:00

Yesterday (Friday 28 January 2011), the volatility index went strongly higher. See below the chart of the iPath S&P500 VIX Short-Term Futures ETN (VXX), the ETN ("Exchange-Traded Note") that tracks the Volatility Index (also called the "VIX index").

The Relative Strength Index that was oversold started to curl higher. And the volume spiked up strongly. That can be interpreted as a warning sign about a future reversal of the stock markets.

Buying Ukrainian agricultural company

2011-01-22T20:01:00.008+01:00

To profit from the increase in price of agricultural commodities, I am buying an Ukrainian agricultural company called Creativ Industrial Group.

The company engages in the production of refined deodorized sunflower oil, modified vegetable fats, hard and soft margarine, mayonnaise, melted butter, and confectionary products. It also produces mayonnaises, mustard, vinegar, and tomato paste. The company exports its products to Russia, Belarus, Kazakhstan, Uzbekistan, Armenia, and Georgia. Its products are used in food and dairy industries, as well as for bakery products. The company was founded in 1991 and is based in Kirovograd, Ukraine. It employs over 1700 people.
Website: http://creativ-group.com.ua/en/
Bloomberg code: 4C8A GR

The company is very cheap: its current market capitalization ($139 million) represents 41% of its 2010 annual revenue ($337 million) and only 5 times its net income (which was $31 million in 2010). Its price/earnings ratio (2010) is 4.6.

A management presentation is available here: http://www.eigenkapitalforum.com/092/presentations/f2/Creative%20Industrial%20Group.pdf

Buying for a total of $10,000 at the price of $13.6 per share (or EUR 10 per share). See the stock chart below in euros.

Hat tip: Olivier

Trades of today

2011-01-21T22:04:00.006+01:00

- Selling CAF at $26.50 (stop loss reached). Return on this position: -9.8%
- Selling CDE at $22.56. Return: +42.8%
- Selling GLD at $130.92. Return: +13.6%

- Buying XLE (energy ETF) at $70.0 for a total of $10,000. Stop loss: $63.0
- Buying XLF (financials ETF) at $16.47 for a total of $10,000. Stop loss: $15.0

Portfolio performance in 2010

2011-01-15T21:23:00.007+01:00

Return of the portfolio in 2010: +11.44%

Return since the start of the portfolio on April 10, 2009: +29.94%
The portfolio now amounts to a total of USD 129,941.

Here is what I observe now in the markets:
- Oil price broke out of its consolidation range to go up. Look at the XLE ETF as a proxy for the energy-related companies
- Gold is in a consolidation range and has formed a triple top; watch out for a possible bearish reversal of the precious metals complex
- US markets are on fire: just look at the Nasdaq (ETF: QQQQ) and the S&P 500 (ETF: SPY): they printed new highs last week
- US financial stocks (ETF: XLF) are doing very well
- Inflation is back !! especially in the emerging markets
- the Euro decreased versus all currencies in 2010, especially versus the currencies of emerging countries

Stopped out of SCIN @ $22.50

2010-11-27T16:46:00.002+01:00

I was stopped out of my position in the Indian Small Cap ETF (ticker: SCIN). That's what a stop loss is made for: to avoid big damages to your portfolio. I lost 13% compared to my purchase price.
According to recent news, a corruption scandal in India made the indian ETFs, including SCIN, take a big drop last Friday. See more details here.

What will the SP 500 index do in 2011?
	decline more than 20%
	decline 10% to 20%
	decline 0% to 10%
	gain 0% to 10%
	gain 10% to 20%
	gain more than 20%

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