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 www.realtimetradingsignals.com



Sunday, October 12, 2014

Wow

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.

www.realtimetradingsignals.com  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.

www.realtimetradingsignals.com  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.



Sunday, September 7, 2014

Perspective

Now that the Fed is continuing their wind down of asset purchases, can we expect to see a market cliff dive?  From a mathematical standpoint, the answer is no.  Earnings yields on the S&P is 5.04%, with earnings expected to increase 7.34% over the next 12 months.  Compared with a 10 yield of 2.43%, statistically we can expect another 10% higher in the S&P over the next 12 months.

Debt levels are now over their long term average, but earnings are outpacing interest costs so party on Garth.  Obviously the debt burden combined with an inabilty to service the interest at a higher rate will kill the bull, but not this earnings season.  Perversely, the Fed walking away will force banks to take on more risk, and they look at these models and see that there is some more blood in these corporate rocks to squeeze.

We remain in buy the dip mode, with an expectation that we will see a more sine wave look to the market to give us some nice trading opportunities.

Enjoy the video of my watchlist.

video


If you want the buy signals real time, go to www.realtimetradingsignals.com

Sunday, August 31, 2014

More Of The Same

The only interesting trade of interest is it looks like oil has a trade able move.  But I would not get too excited about it, or other commodities as Draghi may finally get the monetization action in the Euro zone out in the open, and that will further strengthen the dollar.  Besides, there is simply no way Obama is going to let oil prices rise into an election cycle.

The broad markets look like they are going to continue to rise, probably going into mid September, gold, silver, and the miners are uninteresting, and probably a good short if they start rolling down, and my view is volatility will squeeze down until we get closer to the Fed meeting in September.

I tried a video instead of posting charts.  If you like it I'll do more of them.  It is pretty quick and zippy.

Enjoy.  WWW.realtimetradingsignals.com  if you want real time buy and sell signals.

http://www.screencast.com/t/QCeBtlg9hud

Sunday, August 24, 2014

Don't Short Yet

The Yellen news is out of the way, and next week is the week before the world comes back from summer vacation, so unless we get a geo political curve ball there is nothing in the charts that say jump ahead of the market and short it.  In  fact, it still does not even make sense to take anything off the table yet (next week is a different story).

The good deflation meme is still playing out; dollar stronger, bonds stronger, oil weaker, gold weaker, volatility weaker, institutions still buying, or at least holding, market has no choice but to stay fully invested.

I am still keeping it simple and shorting VXX through put spreads.  I can envision a sub 20 UVXY before this market rolls over.  For those in XIV, stay fully invested until 42.39 is breached (paid subscribers get a daily update on the stop).

For those who want to short GLD, a break below 122.75, buy the Sept 120-118 put spread.

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Please click to enlarge the charts, and go to www.realtimetradingsignals.com to subscribe to my daily trade signals)