Sunday, November 30, 2014

Commodities Falling

When you are the reserve currency falling commodities are bullish for the economy, for interest rates, and for stocks.  Worldwide demand is falling, the banks are exiting the commodity business, and leveraged longs who believe the inflation story are being margined out.  As the dollar gains steam, this trend will continue as money pours in, and those who borrowed in dollars must find them no matter the price.  The dollar is dead meme is over.

There is a great chart that explains what is happening.  Exeter's pyramid of liquidity predicted this. As the economic picture darkens,  Emerging markets, and commodities take a hit first, then U.S. real estate (that is where to watch next), then the U.S. stock market, Treasuries, the dollar, and finally last man standing, gold.

Because our 10 year yield is still too high vs the Euro and the Yen, we will continue to see the 10 year fall, and that will hold up real estate in 2015.  Refi in early next year as you will see sub 3.5% 30 year mortgages.  That drop in the 10 year will hold the stock market up as those yields are arbitraged.

Only when we see earnings falter will the market turn down in a meaningful way.  In the meantime enjoy the falling prices.  if you are interested in my daily buy and sell signals.

Sunday, November 2, 2014

Gold, Vol, and SPY

I'll let my charts do the talking.

Read my daily tweets @BoblovesHawaii, get daily buy and sell signals from my paid site at

Sunday, October 26, 2014

If You are a Reluctant Bull

I have been having a number of conversations around is the bull dead, and with the market so whippy, is it worth trading.  I am not sure, but I see the September highs as the top, but I don't yet see a collapse, as the Central Banks will keep promising to start QE4, so what to do.

For me, I think selling collateralized puts weekly on SVXY (or deep in the money calls) is where I will focus for now.  I am going to stay in that posture, until 192.61 is taken out (I will adjust that support as time goes by).  My goal is to harvest 30-50% annualized cash premium and give myself a 14% cushion (won't lose money unless stock closes below Strike plus premium).  If you have the wherewithal, set a sell contract on ES below 1920 for additional piece of mind.

By doing this, you are protecting yourself somewhat for a downside move, and you are not really missing anything if we bust to new highs (which is less than 15% away).  Something to think about.

My best read going into next week is Monday/Tuesday flat to down (Monday is last POMO). Wednesday through Friday higher, and then we go and test the lows again.  If I am wrong, I am harvesting, if I am delayed I am harvesting, If I am right, I will buy VXX at ES 1920 and lower and abandon the call writing/put selling until I get another buy signal on the market.

Check out my premium picks at

Sunday, October 12, 2014


Well, my thesis for a sell off was a week off, but be that as it may in my view the volatility index is overdone and buying UVXY puts this week should pay off handsomely.  If the market is down on Monday, buy them at the end of the day, and look at the $30-32 area.  Go out to the week four October expiration.  A small investment will pay off well enough, and not be too painful if I am wrong.  Here are some charts that is driving my view.  Enjoy.  for my paid site.

Sunday, October 5, 2014

Calm Before the Storm

I have been increasing my focus on trading volatility as it seems to respond very well to my signals.  Last week was no exception.  Had a good UVXY put trade, and XIV position trade.  Going into this week, it appears that my signal indicates further selling of volatility.  My view is the sell off is not done, and with a strong dollar earnings are going to struggle and should see more selling going into the middle of the month.

I will move my stop up on XIV, and trim all week into further strength.  I also am going to post a weekly chart of my Vol trade.  I am looking to turn $50,000 into $500,000 in five years only trading XIV and VXX without margin.  I will post my UVXY put trades but won't count them in the chart.

Subscribers will get the trades real time.  Enjoy the week.  for my trade signals.

Sunday, September 28, 2014

VXX Watch

It looks like we have another VXX shorting opportunity ahead of us.  VXX touched the top of its downward sloping channel and fell away.  If it breaks below that trend line we are set up for a nice trade.  However, if we push higher this week, we are setting up for a very nice short trade.

VXX struggles outside of its channel.