Bought 150 VEN.TO @ 10.85

I added more shares to my Ventana Gold (VEN.TO) long position. I’m now holding 350 shares with an average cost of $10.22 per share. I also moved my stop order to breakeven at $10.22 for the entire position.

The reason for this trade is simple. I am adding to my winner. It’s by far my favourite trading strategy.

Ventana Gold (VEN.TO)

Gold

Bought 200 VEN.TO @ $9.74, Stop $8.90

Well I found a viable long term hold just as I declared that there’s nothing good out there today. Yes, I eat my words often. So I took a long position in Ventana Gold Corp (VEN.TO). That cup-and-handle breakout from $9.00 is just textbook (Fig. 1). I am indeed a bit late, but the trend is now upward.

There is a big resistance at $10. It is where the June epic decline started. From just above $10 to $6.5 between June and July. Now that VEN is back at this level again. I am betting that the positive momentum would carry it upward.

My hard stop is $8.90. My mental stop is $9.50. As VEN seem to like to gap at $9.50. From the look of it, $9.50 level is more important than $10. Since we’re above it already, this gives me a bit more confidence in this trade.

Another point to note is gold price. It is on a direct train to test, and possibly, break a new high record (Fig. 2).

Risk is ($9.74 – $8.90) * 200 = $168 + $9.90 commission = $177.90 = 1.85% of RRSP trading account.

Ventana Gold Corp. (VEN.TO)

Gold

Sold 3 PAA.TO 10DEC Puts 25.00 @ $2.25, Mark $24.62, Loss 0.3%

Pan America Silver Corp. (PAA.TO) is making another run to test the short term high. Seeing that the volume is relatively higher on this test of $24.80 resistance (Figure 1) and that I have lowered my mental stop to $24.30, I have ditched this short position at a small loss at 10 am today. I am mostly in cash again. I still have a small bullish position in Kinross Gold. I’ll just be letting it run its course.

I have no idea which way the market is going at this 1080 junction on the S&P. There are some important supports just below. I will keep my hands off until the market decides which way it will go.

Pan America Silver Corp. (PAA.TO)

Loss is ($2.27 – $2.25) * 3 * 100 = $6 + $25.90 commission = $31.90 = 0.3%

Bought 200 K.TO @ $15.94

Update Aug 13: I got stopped out at $15.80 for small loss.

Precious metals and the miners are holding well in today’s 30 point drop in S&P (WSJ article). In particular, gold just made a higher low (Figure 1) and AUD/USD is holding 0.8900 somewhat. As such, I’ve lowered my mental stop on the PAA.TO short to $24.30, a mere few cents above. Secondly, I am taking a long position in the Kinross Gold Corp. (K.TO).

Gold

As evident in Figure 2, Kinross has been taking a beating the past year. However, it is trading on a long term Fibonacci support level around $15.80. Thus, I am buying here with a small position while Kinross is making higher lows intraday and on the daily (so far).

I have set a mental stop at $15.60 and a hard stop at $15.50.

Risk is ($15.94-$15.50) * 200 = $88 + $9.90 commission = $97.9 = 1% of account.

Kinross Gold Corp. (K.TO) weekly chart

Kinross Gold Corp. (K.TO) daily chart

Bought 3 PAA.TO 10DEC Puts 25.00 @ $2.27, Mark $24.75

US Dollar looks oversold (Figure 1). Of the few commodities that I follow, silver looks to be weakest (Figure 2). Thus, I look for a short based on silver. I chose Pan America Silver Corp. (PAA.TO) because it looks to be the weakest of the silver miners (Figure 3).

In particular, referring to Figure 3, I highlighted the current price moves versus six months ago. The price movements in the two boxes look similar. Thus I am looking for a big dive in PAA soon with these puts options.

I entered today as PAA is testing its $24.80 resistance. Next resistances are $25.00 (the gap) and $25.15 (38% Fib level in the July dive). As such, there are a couple of safety cushions in case this doesn’t work out.

My mental stop is $1.30 on the premium. Through time decay (around October if we trade sideway from now), price appreciation, and mostly a combination of these two factors. I figured I have about a month’s time to find out if it can break the $25.15 level.

Risk is thus ($2.27 – $1.30) * 100 * 3 = $291 + $25.90 commission = $316.90 = 3.3%. Once again, that’s higher than what I’d recommend. But that’s just the worst case scenario.

We should know soon enough if silver can break lower as it is trading against a descending trendline as shown in Figure 2.

U.S. Dollar Index

Silver

Pan America Silver Corp. (PAA.TO)