Sunday, April 13, 2014

Tapering is Deflationary

As has been my theme all along, the tapering is happening  because the only reason we are QE'ing is because the Fed is the only entity that will buy bonds at this price, and the government does not need them to buy since the cash flow into the Treasury is so strong, and will remain strong through June.

This means risk off, because the heroin flow is reduced, and the general downtrend in the broad indexes, and a strong downtrend in high beta will continue.  I will continue to hold SPXU, and watching for my target on BIS to reduce my size.

Regarding commodities, my signals are still telling me to short them, and I know oil and nat Gas has defied me, but I will continue to take shots at it.  The same with gold and the miners.  I bought DUST at 24.09, it promptly went red by 20% and now almost to break even again, in one week.  I see DUST in the mid to high 30's, and I see gold and silver rolling over this week, and see gold hit 115 by the end of May.  I hold May 1 125 puts.   I also am holding May GASL 37 puts.

Having said all that, this week is Easter week, tax day, and OPEX week, and we will get a rip your face off short covering rally.  I will cut my SPXU position in half, probably the same on BIS and will buy XIV, and offer a UVXY trade for my subscribers.  The following week the downtrend will continue.

The portfolio continues to perform very well, and superbly against the SPY benchmark.  I also posted yesterday on Real Estate, and First Trust Deed investing, why I do it, and whom I'd recommend you should work with if you are into real estate, and if you like a very smart diversification option.  http://arum-geld-gold.blogspot.com/2014/04/something-different.html

If you wish to subscribe please go to http://realtimetradingsignals.com/

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Please enjoy the charts and click on them to enlarge them.







Saturday, April 12, 2014

Something Different

I am going to post my regular weekend report tomorrow morning as usual, but wanted to talk about real estate investing, and in particular investing in what is known as First Trust Deed investments.  As many already know, there are a number of ways to invest in real estate.


  • Buy a home for your family,, and as a long term investment. I own one
  • Buy a rental property in a different market than you live in with enough down that it cash flows for you, as part of your wealth building strategy. Letting renters help you build this wealth. I own one.
  • Get into the home flipping game.  I stayed away as it takes a eye for value, contractors skill in sizing up repairs, and a lot of cash flow and courage to make money.  Oh and your timing needs to be right.  In CA this market is a loser as of the first quarter.
  • Own a REIT, or get in a real estate pool.  I stayed away as all I own is a promise, and if something goes wrong, well get in line as when you read the fine print you may find your place in line may not allow you a recovery.
  • The last one I want to discuss, as it is where I hold most of my wealth, even more than the stock market, is in first Trust Deeds.  I have owned these since 2006, as a diversification, and as a low volatility way to make above average returns, hold actual first in line title to the property in case of a default by the borrower, and enough equity in the property to return your investment to you if you must take the property from the borrower.  Even in 2008 when the real estate market seized up, in nearly every market a properly underwritten loan paid off for these lenders.  Personally, I have suffered no loss, and only had to adjust interest payment for the borrower during that time so they could cash flow and stay current.  I am still in them today. 
Being first in line, with properly underwritten investments is the key, because not all First Trust Deed loans are alike.
    • There are the fix and flip loans to "investors"
    • There are loans to buy out of foreclosures
    • There are the credit repair loans to dinged homeowners with a lot of equity using their balance sheet to repair their ratios and wait out FICO
    • Commercial loans
    • The new construction market, with professional borrowers.
I give you this and my background on First Trust Deeds, as I view them as an essential part of your wealth strategy, wanted to introduce a company that I consult for, the owner of which is a friend of mine.  (Disclosure, I am not a broker and do not sell these loans, nor will I paid on these loans.  I work for all three of his companies, not just this one)

The company is Ignite Funding http://ignitefunding.com/landing-page-kudla-con/  They are a private lender to the new construction building industry, (in business since 1995) and they are growing very fast because they are making their clients a lot of money.  In fact they have funded nearly 150 million in loans at an average return for their investors of 10.9% and NO losses in the last three years.  In 2014, they are growing at a record pace again, of over 30%.


The reason is they are dealing with professional builders, in growing markets, with nice homes, and your investment is secured by the real estate your investment is tied to.  You are the bank.  They protect their investors with 30-40% equity on average, and keep the loans to a year or less in most cases to further reduce investor risks in a now fast changing investment value environment.

But let me allow them to tell you their story.  Please go to http://ignitefunding.com/landing-page-kudla-con/
and hear more.  Sign up so they can verify you are suitable to make this investment, and that they can legally send you future loans to review and consider.  They currently have over 1250 active investors, are servicing over $53 million in active loans, and will write 7-8 million in new loans every month this year.  Their loans are in such demand that they subscribe within 2-3 days of becoming available.  


Also, they will never ask you to buy a product, never personally hold your money (always through escrow), and the borrower pays all fees on any loan you would invest into. you'll like these guys, 94% of investors reinvest.  Thanks for letting me pitch these guys.

Sunday, April 6, 2014

My Signals Work

I usually soft sell my service, but this week I'd like you to read the past few weeks of my posts, and to go to my sister free site http://realtimetradingsignals.blogspot.com/ , and see my macro picks, my portfolio results, and my option picks.  My signal is not some black box, but a well thought out two part system that simply works.  If you agree, and want to make consistently good money without trading like a wild person give us a shot.  Also, I am going to hold a training event on the 24th of April at 5pm Pacific time to show you the signals and strategies I use to pick and trade options.  The signups on on my marketing site at www.realtimetradingsignals.com.  As always we have a satisfaction guarantee of a full refund if you are not satisfied.

Now to the market, with the momo's and biotech falling hard, and I think with their bubbles burst, the market is going to struggle some here.  There is a very logical reason for this; the government is awash with cash and does not need the Fed to fund them until June comes.  This means the casino has less chips riding, and in two weeks more cash is going from the rich to the government in the form of tax payments.

For the commodities, I think they roll over, as well. The economy is punk, the dollar is firming, and liquidity is being constrained.

Finally, it looks like the volatility index is positioned for its next up cycle.

For me, I am going to add VXX and DUST at some point this week, trim my miner positions, and trim my oil services positions. Last week, I added BIS, and MNKD as long term positions, and will be tweaking some size as necessary, in both.

I will post out free charts all week on the free site mentioned above, and will post out option opportunity as they become apparent to my subscribers.  Enjoy the week.

Click to enlarge the charts.





Sunday, March 30, 2014

Reversals

I put most of the commentary on my charts, but in summary we are going to have some short term price movement reversals to shake out the late players.I think this plays out for a week or two then we start a generalized risk off through June, including the commodities.  Oil in particular as it will be used as a weapon against Russia. I will continue to get shorter during this period, and will add a nice position in BIS for a year long hold.  I can see it in the 60's at some point next year.

Please click on the charts to enlarge.







Sunday, March 23, 2014

It Continues

I can wax eloquently about macro this and micro that, or what my charts are whispering to me, but the fact is the FED is withdrawing credit, ergo the banks have less leverage to speculate, and the market will be soft through May, punctuated by by bouts of Fed rumour short covering rallies.

For me, I will trade more from the short side, stay defensive in my portfolio, and look to leverage XIV and UVXY puts on extreme volatility moves (in my timeframes).

We had a beautiful trade on DDD Friday, and I took out all of my risk (100% return in three hours) and looking for some follow through before I close the trade.  I am going to point out a few other high betas to short as the one's I follow give the signal.

I am waiting on gold to tell me to double up or to go short, and I am likely to go long vol this week, as well. Have a great week everyone.  Enjoy the charts, and below you will also see my portfolios; general, and my XIV/VXX portfolio.  Click on to enlarge.






Sunday, March 16, 2014

Here Comes the Vomit Comet

What a big week ahead for us.

  • The Russian news is old unless Russia tries to up the ante again.  My view is they consolidate Crimea, then in a few weeks agitate for the Odessa region, then Eastern Ukraine.  
  • China is starting to lose control of their credit markets, and soon we will see some wholesale panic, and truly see what a house of cards China really is.
  • Yellen decision, and will in all likelihood continue to taper, and for many reasons; 
    • One is the Treasury does not need the bonds, 
    • Yellen must establish her chops, 
    • It is putting increasing pressure on Russia and China.  Emerging markets are feeling the vice grips from this liquidity drain. 
  • Finally, what's up with that jet?  If terrorists can break confidence in air travel, things can get bad very fast.
All we are missing is a plague, as we already have the weather.

Having said all that, I expect Monday, Tuesday, and Wednesday to be positive in the aggregate, as no one wants to be too short going into the Fed announcement.  After this week however the selloff continues into the June meeting.  That is when they will need to buy bonds again.  I say this as my trade signals on the broad market are pushing against their ready to buy areas, and my gold signal is reaching time to hop off area.  My signals are swing, not macro, so I only look a week out in most cases.  The Fed controls the macro.

Last week, my signals were spot on, and I closed out a nicely profitable DDD short, and VXX long position. Still sitting long gold, and just started trimming size, and still on the lower energy theme.  Going into the week more neutral with XIV, and reduced SPXU and DGP positions.

Have a great trading week.  Click on to enlarge the below charts.






Sunday, March 9, 2014

We are Distributing

My signals for SPY are at max bullishness, which precedes a market correction, and I have been getting more bearish.  I closed my XIV and DUST trade, and bought DGP and SWC, and added to AG.  The metals and miners are not falling while RSI is consolidating, and that is bullish in my view, and XIV is unable to break back into the upper part of its channel and has made a lower high. Geopolitics are heating up, as well.

It is good be cautious. Below, I also recommend buying puts on DDD if it breaks below Friday's low.  I see low to mid 50's in its future.  I will close the last of my DDD long position on that break, as well.

Our portfolio is still performing well, at over 65% annualized, and  am introducing my volatility portfolio for non day traders.  I have been running the portfolio since December of 2012, and the performance has been very good (114%). I am waiting to trade it through a market down cycle before offering it as a subscription (hopefully by July).  I will post results each week, and when it gets a little closer I will offer the trades for free for a few months so you can see the value for yourself.

Enjoy the charts results. Click on charts to enlarge them.