Summary
This email focuses on disciplined stop loss management using the Mexican Pete pattern as both an entry signal and a framework for trailing stops. Phil Anderson walks through live position examples in GLD and VAU to illustrate progressive stop adjustment, then adds Rio Tinto (RIO) to the Mex Pete model portfolio and makes several watchlist changes based on cycle positioning.
Key Claims
- A stop loss should first be protective, then moved to entry price once a position moves in your favour, then trailed along higher lows as the trend develops — confidence: high
- The Mexican Pete pattern’s higher lows provide natural, objective levels for stop loss placement at each stage of a trade — confidence: high
- Rio Tinto’s breakout near record highs is consistent with the current stage of the real estate cycle given its exposure to iron ore and copper — confidence: medium
- The breakout in copper mining stocks (COPX) is a positive economic signal that confirms cycle positioning even without a model portfolio entry — confidence: medium
- Energy (KMI) and regional financials (KRE) are industries expected to perform well at this point in the cycle — confidence: medium
Mex Pete References
- GLD (SPDR Gold Shares ETF): Four-month base April–August 2025. Breakout entry ~9 September 2025. Three sequential stop levels identified: Point 1 – 335 (entry price, moved after rally continued); Point 3 – $357 (higher low of new basing pattern formed after natural reaction).
- VAU (Vault Minerals): Stop trailed to 3.64). Price potentially forming a triple top near $5.00. Stop level noted as wide enough to allow new base formation without triggering prematurely.
- RIO (Rio Tinto, ASX-listed): Classic Mex Pete structure on the weekly chart — flat top resistance at $135, higher lows forming since 2021. Breakout confirmed near record highs; added to Mex Pete model portfolio.
- TCL (Transurban Group): Mex Pete setup in development since 2020; higher lows forming since October 2023. Added to Australian watchlist pending breakout confirmation.
- KMI (Kinder Morgan) and KRE (State Street SPDR S&P Regional Banking ETF): Both described as “progressing through Mexican Pete patterns”; added to U.S. watchlist.
Stock Picks / Signals
| Ticker | Action | Entry Notes | Stop Loss | Notes |
|---|---|---|---|---|
| GLD | Hold / trail stop | Entered ~9 Sep 2025 ~$335 | $357 (Point 3) | Stop updated to higher low of new basing pattern |
| VAU | Hold / trail stop | Entry $3.64 | $4.30 | Triple top risk ~$5.00; stop locks in profit |
| RIO (ASX) | New position added | Breakout above $135 flat top | $127 (most recent higher low) | Added to Mex Pete model portfolio |
| TCL (ASX) | Watchlist add | Monitoring breakout | Not yet set | Higher lows since Oct 2023 |
| COPX | Watchlist remove | No position taken | — | Breakout noted as cycle-confirming signal; removed as setup no longer pending |
| KMI | Watchlist add (U.S.) | Mex Pete pattern in progress | Not yet set | Energy; cycle-appropriate sector |
| KRE | Watchlist add (U.S.) | Mex Pete pattern in progress | Not yet set | Regional banking; cycle-appropriate sector |
Predictions / Forecasts
- Implicitly forecasts continued strength in iron ore and copper-linked equities (RIO) consistent with the current real estate/economic cycle phase — confidence: medium
- VAU price action flagged as potentially topping (triple top ~$5.00), with outcome to be determined by whether stop is triggered or new base forms — confidence: low
- Regional banks and energy expected to outperform at this stage of the cycle — confidence: medium
Notable Quotes
“No guessing…just watch and let price tip your next move.”
“Given our place in the real estate cycle, Rio’s breakout near record highs shouldn’t come as a surprise given the company’s exposure to iron ore and copper.”