Today I was stopped out of DGP for a very small loss. Overall, the trends in gold were quite bullish and worth the risk of being stopped for the potential upside. While it now appears likely that gold will now fall below 700, it is by now means a certainty, but what is highly probable is that gold will move much higher after this correction is over. This breakdown negates the long setups in RGLD and other gold stocks for the time being.
On Friday I made the decision to exit my position in JAVA (Sun Micro). I had been long from $5.00. When the news of a buyout from IBM first broke, I was hopeful that JAVA would move above $10, but the correction that followed was more than would be expected if the deal was a certainty. Friday, news came that IBM was lowering its offer to less than $10. Even so, with talks to take place over the weekend, one might have expected JAVA to move above $9. When it failed to mvoe much at all on Friday, it seemed to me to be a signal that the smart money was not confident in the deal, so I bailed. Fortuntately, it seems to have been the right decision. That's not to say that it can't take off again on expectations another suitor will come along.
One thing about this rally that is very positive is that I am finding trade setups almost everyday. There are so many that I am waiting for only the best setups. The one negative is that not many leaders are breaking out to new highs. I think this will come as the rally progresses. Right now the beaten down stocks are still moving the most.