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Sometimes you just need a push to do what you really want to do. This morning I’ve received this most interesting comment from a reader named Pete. Here’s a summary of what he wrote:

Hey there,
I really like your trading style and commentary. Just read through the last couple posts. I feel compelled to warn you about the dangerously receding U.S. dollar. As you mentioned about how you were thinking of hedging against the currency movement, to lock in profits.

Overall the USD is looking very scary. Of course its already lost 60% to the Euro in the few years, and this does affect US citizens being part of a global market. All the imports will cost more and eventually the price of living goes up, as you may be aware.

Some people are predicting 1929 style world wide depression with US being very majority hit. And are advising to get a basket of foreign currencies to hedge against the downfalls.

I’m a firm believer this is the case as we have seen starting to happen since Sept 07 as predicted by LaRouche, we should continue to see things like Oil, Gold and other metals strengthen while the USD continues on down, and eventually the solution will be to create the Amero (the north american union).

For more good info on this check out www.infowars.com , and they broadcast a radio show over the internet constantly for more developments.

Best Regards
Peter.

Pete, first of all, thank you so much for your comments. I think they’re very valuable and you have a great point. As per my previous posts, my portfolio is doing really well lately and I’m comfortable with the US stocks I own but my profits are being eaten up by the US dollar drop… as you know, it’s hard enough for us traders to make profits on trades, leave alone fight against a 4% or more drop in the US. I personally hold all my funds in Canadian dollars. The following is the chart for the USD/CAD - it has dropped 4% over the last days and I don’t see it stopping..

I prefer to trade the US stocks as there’s a lot more volume, readily available information and also participation but unless I come up with a very serious and strict hedging method for it it will be hard to keep up.

I also believe Gold is going to continue up and wrote about it here. Here’s the latest chart for Gold and it has appreciated 4% since my signal here.

Crude oil is no different, just broke to the upside and my system quickly captured the signal…

The Euro recovered very nicely and my system is almost ready to give me a buy signal, in addition it’s displaying the same "failed break setup pattern" I post so many times in the past…

As Pete correctly pointed the strength on Gold, Oil and other metals contribute and talk about the further US stock market and USD weakness…

Last but not least, looking the weekly chart of the Dow Jones (INDU) — what do you see? Unless it breaks the 14,000 things could get really ugly.

Here’s what I’m doing today (December 28, 2007) # 1

I am closing most of my USD position which are all profitable at the moment but could’ve been 4-5% more profitable "IF" I had a USD/CAD hedging in place. Here are my closing results.

=>ENTRY:2007/12/12-Long LH at 74.148, stop@71.4, risk/unit $2.86 (1.7%)
=>EXIT :2007/12/12- 500 at 75.51, Net PL $ 1,108.50 (2.9%) 16 days

=>ENTRY:2007/12/12-Long LH at 74.148, stop@71.4, risk/unit $2.75 (1.7%)
=>EXIT :2007/12/12- 500 at 75.435, Net PL $ 1070.20 (2.8%) 16 days

=>ENTRY:2007/12/11-Long DAR at 11.4, stop@10, risk/unit $1.40 (1.7%)
=>EXIT :2007/12/11- 1000 at 11.59, Net PL $ 331.20 (2.8%) 17 days

=>ENTRY:2007/12/26-Long TIVO at 8.58, stop@8.4, risk/unit $0.19 (-2.6%)
=>EXIT :2007/12/26- 3000 at 8.3676, Net PL $ 202.60 (0.8%) 2 days

=>ENTRY:2007/12/14-Long IBKR at 30.459, stop@29, risk/unit $1.52 (5.5%)
=>EXIT :2007/12/14- 1000 at 32.2, Net PL $ 588.10 (2.0%) 14 days

Total PL$ of closed positions: 3,299.00.

I do believe that most of these stocks can still try fighting the trend. I keeping a partial position on LH and X. Here’s the weekly chart for US Steel (X).

Here’s what I’m doing today (December 28, 2007) # 2

I am transferring the funds from the closed positions to Gold or shares of GoldCorp (G.TO) — I wish we had in Canada a Gold ETF tracking just like GLD  or IAU in the US… we do have one but the volumes are too low and I’m worried about the spreads. Here’s what Goldcorp looks like today:

Please note the stop line on the daily chart at $ 31.36.

That’s it for today folks — WISH YOU A HAPPY NEW YEAR!

Considering the heavy market selling over the last many days I am still comfortable with my positions. Right now I have in my portfolio: DAR, LH, PCA.TO, X, IBKR and CP.TO. Let’s look at some of them:

The chart for Canadian Pacific requires special commentary. Sometimes I like to use bar charts to give me a longer term view. CP broke the 67.5 level in late November along with the broad indices and early this month it tested that level and bounced back. It also found sellers after the bounce. I have my stop at 62.4 on this stock but I believe it will re-visit the 67.5. Depending on the intensity (volume) of the move it coul atract buyers again at the 69.00 area and push the stock further. The signal to wait for is the MACD — I’d like to see it going below 0 and then crossing the 0 line again.

Serious concerns over economic growth drove the Dow Jones Industrial down 172 points or 1.29%. The index is now trading below the 200dma and it could easily retouch the 13,000 area.

As per the following table, the NYSE has 80% of declining issues, while the Amex had 73% and the Nasdaq 77%.

My Portfolio

My portfolio has suffered some serious losses and most issues turned red today but I didn’t sell anything yet. Some of the highlights:

Laboratory Corp (LH) held very well today, given the market blood bath…

So did Interactive Brokers (IBKR)
 
US Steel (X) dropped just about 4% but on low volume (so far).

Darling International (DAR) - also held up quite nicely

I am glad I got out of Cameco Corp (CCO.TO) when I did…

Have a good night.

The bulls had their way again today. The Dow Jones Average closed up 175 points or 1.30% on Bush Plan for Mortgage Rates and also hopes for further rate cuts. It seems the concern over the housing slump is slowing fading away.

Looking at the daily chart of the Dow Jones it shows the index closed well above the 50ema which is positive but will now face a strong resistance ahead in the 13,700-14,000. Two scenarios are now in play, a sustained close above 14,000 could inspire a breakout of the all time high levels and a close below 13,000 would be a very BAD thing. Nobody knows what will happen, only Mr. Market… we shall respect it’s desire and play some very disciplined money management.

My Portfolio

Excellent progress on my portfolio again today. No new or closed positions.

• moved my stop on DAR to break even, good progress
• trailing my stop on LH, no risk at this point (unless it gaps down)
• raised my stop on BAM.A.TO to 34.17, good progress today

My PL went made a big jump from $ 3,580 yesterday to $8,587 today. Here is what my positions look like:
 

Darling International (DAR) - up 15.4% since my entry on Nov 13.

Companhia Vale do Rio Doce (RIO) looks ready to attack all time highs levels again.

That’s it for tonight folks. Long day at work and ready to go sleep. Will do a sector review this weekend.