Friday, February 17, 2006

The act of observation

In quantum mechanics, it's known that the act of observation alters the object. Is the same happening here? MGN, which I own and charted below, displayed a nice set up yesterday (2/16). With stochastics oversold and turning up, MACD also turning, it stands a good chance to re-test the $8.10-8.40 resistance. Especially with silver up overnight, and wind behind the sails of the PM complex the last couple days, temptation was great to make an easy 25%.

But, I didn't jump in. Why? The fact that I already own 1000 shares hardly matters. My PM shares currently take up 20% of the actively managed portfolio, but so what, it was 30% last month, and I'll be out in two weeks. Or will I? Was I affected by the fact that I was writing this blog? Hmmm... In what way?

Back to those GG Mar 20 calls, I was about one day too early, but they turned green today. If the final leg up materializes, I would have more than covered my outlay for Valentine's day (Note to self: good justification for a bum move). There were a cadre of top callers a week ago but I stuck to my guns. The start of a new wave is meant to bring about a new group of buyers -- such that previous short-term patterns don't necessarily apply. With buying interests in Newmont like this, I feel I'm in good company. That being said, we're nearing the end of a big move, the prudent way is to sell into strength along the way or set tight trailing stops and not be greedy.

If anything, writing this blog forces me to clearly enunciate my reasons for action, instead of muddle through with gut feelings. If that's how observation alters the observed, observe away!