It’s “Mailbag Friday.”
The mailbag has been a little light over the past month. But readers did comment on a few of the topics I wrote about this week and last.
Here are their comments and my responses…
Hi Jeff! How do gold and miners look to you? It seems there’s nothing to say until it breaks out or breaks down? Mr. Market is trying to shake everyone off using boredom I do believe. Thanks!
Hi Cal. Thanks for your question.
As I’ve often written, I like the long-term potential of gold mining stocks. And I think everyone should have at least some small amount of exposure to the sector. But, until we some positive price action, it’s hard for me to recommend increasing exposure.
Having said that… I do think we are quite near the start of at least a several-week-long rally for gold stocks. The Commercial Trader net short position on gold futures contracts has come down quite sharply over the past few weeks. Gold stocks are acting better than the metal. And the short-term rally in the dollar looks like it’s finally coming to an end. All of these factors tend to be bullish for the gold stocks.
So far, though, we don’t have the sort of price action that confirms the start of a rally for the gold sector.
Keep an eye on shares of the VanEck Vectors Gold Miners Fund (GDX). If it can rally and close above $22.70 or so, then it will create a bullish looking pattern on the daily chart. If that happens, I’ll be willing to increase exposure to the gold sector in anticipation of a rally over the next few weeks.
Is there a good ETF/stock that tracks the price of oil that one could use for a short-term hedge to a long-term overweight in energy MLPs position? Thank you.
Hi Harry. The United States Oil Fund (USO) does a pretty good job of tracking the daily price of oil. Also, the ProShares Ultra Bloomberg Crude Oil Fund (UCO) is a leveraged fund that tracks the oil price. Since it’s leveraged, though, UCO suffers a modest degree of price decay over time.
Hi Jeff. What percent of your investing funds comprises “a large amount of cash”?
Hi Donald. That’s a great question – especially since I’ve been telling folks that the best trading strategy when the market is chopping back and forth in a tight trading range is to “do nothing and just sit tight with a large pile of cash.”
All traders are different, of course. But, for me… a fully invested account would have 20 positions. Ten of the trades would be conservative and likely be held for several weeks to several months. Ten of the trades would be more speculative and shorter-term oriented and likely to play out over just a few days to maybe two weeks.
I consider a “large amount of cash” to be whenever I have fewer than 10 positions at work. Typically, that would mean I have 50% or more of my trading account in cash.
Jeff Clark needs to “repress” his anti-Catholic remarks in the Market Minute. Namely, “But, having been raised in a strict Catholic household, I am an expert in repressed emotions” in the 5/24/2018 Market Minute.
This is a negative stereotype and gives the impression Jeff is an anti-Catholic bigot. I can’t imagine him making a similar or modified statement about Jews or Muslims, so why did he feel it was OK to make a negative comment about the Catholic religion? Jeff owes all of his readers a heartfelt apology with assurance that he is not an anti-Catholic bigot and will refrain in the future from making comments about any religion.
Hi Greg. Thank you for writing in.
My “repressed emotion” comment was meant to be self-deprecating. I thought it was funny.
When I showed your email to both a Jewish and a Muslim friend they both commented on their repressed childhood emotions. So, I’m quite certain that had I been raised in the Jewish or Muslim faith I probably would have made the same sort of self-deprecating remark. It seems that most organized religions have a knack for repressing emotions.
Nonetheless, you took offense to my comment. That was not my intention. And for that I apologize.
I do have to wonder, though, if we – as a society – have become a bit too sensitive.
Can I joke about my beer belly without offending the overweight population? Can I comment on my hair loss without offending the bald folks? Can I broach the topic of adult diapers without… well, I’m not there yet.
But, my point is… have we reached such a sensitive point in our society that I can’t even make fun of myself without offending others?
That seems a shame to me if we’re at that point.
Indeed, the characteristic I find most interesting among my friends is their ability to poke fun at themselves. When my sons do the same thing, I find it charming. It is an endearing quality.
I get your point, though. Religion is a sensitive topic.
I’m just wondering if maybe it has become too sensitive. After all, if we can’t see the humor in ourselves and our actions, then maybe there’s not much to laugh about. And if there’s not much to laugh about, then what’s the alternative?
In my mind, God has a sense of humor. That’s why we have the ability to laugh and smile.
Maybe… just maybe… we should use that ability more often.
Have a wonderful weekend.
Best regards and good trading,
P.S. Whether I’m able to respond or not, I always love to hear what’s on readers’ minds. If you have a trading story, question about technical analysis or option trading, or simply a suggestion for how we can improve the Market Minute or Delta Report, send it right here.