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Gold Smelts Miners

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Yellow metal doesn't have to contend with quarterly reporting, management issues.

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Hello from New York, where I couldn't possibly feel worse about the fact that I bought the Goldman Sachs (GS) I was talking about yesterday. The logic was as follows:

A) GS finally got to the lower 150's which represent the lows of last summer; that gives me a nice tight stopping point should the trade go sour (and assuming GS doesn't gap 40 points lower some morning which is a chance I'll just have to take).

B) When the market sells hard on the headlines that the Federal Reserve Chair isn't totally oblivious to weakness in the economy, it just may be a sign of things getting a little "emotional" to the downside.

C) Goldman fits my "best of breed in a weak tape" rule.

D) It's a decent trading rule of thumb that your instincts are going to be horrible at the top ("I'm bullet proof!") and the bottom ("Honey, where's my gun?"); the fact that buying Goldman seemed half-insane was actually a selling point to me.

Here's what I'm watching in lieu of spending the rest of my day letting each up or down tick in Goldman determine my self-esteem:

  • I made the mistake of saying I thought Apple (AAPL) did a poor job rolling out the latest iPhone on last night's Fast Money. Saying so wasn't a mistake because I don't believe it and I'm not alone in the view. It was a mistake because I've spent the last 16 hours being accused of (in no particular order): being a market manipulator, hating Apple, being short Apple since $120, having no functional brain to speak of. I vigorously deny all the charges except for the last, which isn't really for me to decide. To be clear while not defensive: I wasn't making a call on Apple's stock; simply an observation that buying an iPhone is every bit as frustrating as buying any other cell phone (long waits, baffling pricing plans etc) and is a missed opportunity by Cupertino's finest.

  • Crude Oil is being beaten senseless this morning for any number of reasons. The plan for my USO long remains "sip (more) at 110, chug in earnest at 105, regurgitate the whole load on a close below $98". I've got mad respect for the oil bears in these here woods on crude. The action today is harrowing as a USO long. But changing a plan in mid-stream is the anti-thesis of smart trading.

  • Gold and its ETF buddy the GLD have been ripping as folks flee from most every other asset class. Congrats to the gold bugs out there (who have been as passionate as Apple holders in communicating with me but generally much more cogent in their pro-Gold stance). Unlike Apple, I actually have been negative on Gold. Given my demonstrably incorrect stance you can take it as you will when I say I'd still play the GLD ETF, rather than the miners. Put it this way: I don't particularly like Gold but, unlike certain mining companies, I don't think Gold is going to announce that it bungled its quarter, overpaid its management or is experiencing a labor strike.

  • Todd-O's heckling me for not posting the Goldman trade sooner. In my defense, I think there will most likely be another "bottom" in the financials sometime soon, even if it doesn't come this afternoon.

  • Jose Canseco is proving that, whatever their other merits, steroids don't help you get out of the way of left hooks. If Jose were going to box a football player he should have stuck to Mark Gastineau.
Position in GS

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