OPEX Friday - January 20, 2012

[TraderD]

GDX had an amazing down move that almost hit our trailing stop (51.06). Only 5% of GDX trades are exited on stop hits so it came close to a worst-case scenario. But the worst may be over judging by the massive large players buy programs into the close. The GDX MF jumped from a low of 0% back up to 0.60% in the last 16 minutes of trading alone.
These MF zigs and zags leave us wondering if sellers or buyers have the strongest conviction? Or is this another opex pinning exercise? It feels like a bear trap to me. Anyway, the robot is holding its long position but avoids entering new positions for now.
Billy

The bottom of the IWM robot page states that exiting on targets seems to be better suited as the position gets "old" (albeit no specific setting has been proven to better exiting on stops). The GDX position opened on 12/31/2011 is likely "old" by now. It "feels" as if profit taking should have commenced some time ago when GDX stats stopped providing an edge, as the market really doesn't "care" when, why and at what price we entered the position. Has that been tested by any chance?

Trader D

[nickola.pazderic]

All the people I read regularly have and are taking positions for a pullback. In including this one and this one.

I have the same thoughts as Trader D about profit taking before our holdings become old and tired.

In the future, when anyone starts thinking about taking profits, I suggest/urge that they start a profits thread in Billy's forum. At least we could air out or ideas between ourselves. On a separate thread, Billy or Pascal could chime in should they wish to-- not in answer to particular questions.