SPY- Would not surprise me

I closed my calls yesterday, but I can see SPY hit this level by the first week in January.  I will post when my SPY short signal hits wherever that level may be.

Merry Christmas everybody.

GLD- Reversing long to short

Gold also had a swing high earlier than  it should. So I am taking my signal and going short.  Out of all of my miners, and I am out of my very profitable SPY trade, as well.

I am going to sell some condors for the next weekly, and continue to build a short book going into the new year.  I will post anything significant.

Merry Christmas everyone.

SLV- On the edge.

SPY So Far, So Good

I am also long metals and miners until I get my sell signal.

Buy Signal on SPY

Plus buy signal confirmation on miners, gold and silver.

Bought GORO

Per my earlier post, I expect a epic short squeeze if GORO catches a bid.  The chart suggests strength and I took a position at the open.

GDX follow up

I am now watching for buy signals on individual miners.  I jumped the gun on FSM, AG, and EXK with purchases yesterday.

I bought GDX calls

Closing Shorts and Buying Metals and Miners

Closed my EDZ, and ready to close my SPY puts.  I have been buying GLD and SLV calls and bought EXK, FSM, and will buy AG here.

Dollar broke the downtrendline

Nearing a swing low.

Still short SPY and EDZ

But watching for a reversal today.  EDZ in at 19.30.

Follow up post

I filtered my list of short squeeze candidates and put them through a low vol filter.  Here is the list below.  When the Bollinger bands collapse and there is high short interest, the the timer is set for a move higher.

Hypothecation and an epic short squeeze?

By now everyone has read about MF Global and we are all now familiar with hypocathecation and re-hypothecation.  One of the bizarre side affects that we should watch out for is a massive short squeeze in equities, and I think most importantly the metals in the futures markets and the miners in the equity markets.

The miners have been relentlessly shorted in a paired trade for the past year, and the metals/miners index is nearly back to 08 levels.  My view is as more and more brokers decide to reduce their risks, they are going to be calling back their shares or closing short positions they allowed to be borrowed and/or close massive naked short positions and a massive squeeze will be on.  It will only take one broker to start the ball.

To prepare I looked at the biggest short positions per trading volume and posted those below.  There are some nice gold and silver miners, but what stands out are the Uranium miners and GORO.  I will start adding positions in these names.  Days to cover is on the second to far right column.

EDZ and SPY trades

GDX - Washed out?

GDX-Decision time looming

Do we break the rectangle this time? If so, we are looking at a $75 target.  I am long for now, watching my signals.

LEI - Small cap buy set up

FCX - Update

On Sunday the 23rd of October I placed FCX on a stock to watch list as I believe the miners have a big run in front of them.  FCX is a great company to trade as is GG.  I also thought we would get a sell the news event, which I believe is now behind us.  Below, is my initial buy stop for FCX as of this post.

The Four horseman of High Beta

I mostly trade the hard asset stocks, but I like to trade these high beta stocks.  I used to be an idiot and try to play these both long and short, but the market told me I only make money when buying my long set ups.

Enjoy.

FCX - A stock to watch

On Thursday, FCX hit on my short term buy signal, and had two confirmation signals hit as well (My daily signal still shows distribution but close to a confirmed buy signal, as well).  This weekend Barrons wrote a positive article on the company that shows a severe discount to replacement values.  Ironically, this is true for almost all the miners right now. When the market reacts to this price/value mismatch in the miners is a mystery to me, but I am anxious to play it again on the long side.

FCX is now on my daily watchlist to trade against my short term signals.  I am passing on this signal for now, and will await the next buy set up and allow some of the euro drama to play out this week.

Personally, I think we either get a sell the news event, or worse, a sell off due to a recognition of the intractable nature of the debt situation.

The Dollar Is Set to Rise

Sorry for not posting in a while, my real job has kept me busy.  The dollar has made a swing low for I believe the next 6 to 10 weeks, and with that we should see pressure in the oil, commodities and emerging markets.  This is coinciding with the end of the insanity of the Europe hope and dream campaign.

I took on three trades today, EDZ at $23, DTO at $57.50, and FAZ at $50.  I closed FAZ for a quick profit and trimmed DTO a bit, but am ready to add to all three with a break in trend on the dollar.  It was gratifying to see Tim (www.SlopeofHope.com) mention EDZ today, as it is my favorite risk off trade.

If you value cycle theory as I do, we can expect a larger than normal move for the dollar.  This will crush gold and silver, as well and bring us to some compelling buys in both towards year end.  Here are some charts as reference.

GLD - Where to now?

Anatomy of a SPY trade

I have been asked how I trade the SPY or any other index for that matter, so I thought I'd show everyone my trade today.  This high volatility makes day trading easy but holding overnight a nail biter.

First off, I enter with an initial position when the 10 crosses above the 30 on the 15 minute.  I usually hold a debit call or put spread, but I chose to not place/keep one on last night.  When the 60 minute shows the same crossover I usually add to the trade, but did not as the volatility is so high there was no need or desire to risk more capital.

So coming into today SPY already met my first condition and I was long, and it looked ready to meet my second condition today (which it did). 

In the chart, I laid out my trades, but one more thing I usually do but did not this time as SPY was below its 200, so failure is in the back of my mind, and I chose to hedge with a credit spread vs. keeping a debit spread on as my hedge.  I chose also to end the day with just a debit spread as the SPY is above all resistance until the gap fill.

I point out these exceptions as it is as important to get a feel for the tape and events in shaping your response to trading decisions than just being mechanical.  You definately need to be paying attention.  Anyway enjoy.

Oil Study

Looking at this sequence of the USO chart shows us some tradeable information.  First off the weekly is showing us a huge range, and within it, a smaller secondary range.  The two daily charts show, one a successful test of the secondary range last week, and zooming closer in we see a series of higher lows on price and stochastics, and a nice gap just above price.

My play is this, I opened a 25 option Sept 33 call position on the open on Friday, plan is to sell or scale out on the gap fill.  Then I will watch for a successful move above the next fib line or a failure of the range low for my next move with USO.

Market Sniper pointed out a trader post on playing ranges yesterday, and looking back at the weekly you can see a failure of the smaller range gives a high probability of a test to the 09 lows.

One mistake in my chart, the smaller range is the 10 lows, not the 09 lows, sorry.

HI HO Silver and Away?

Interesting strength in silver tonight, and the charts are looking constructuive, as well.  My suggestion is to take a back ratio call spread for September on SLV and buy the breakout on SLW.

Coal Stock relief rally play

Here are two coal stocks that could catch a bit of a move higher.  They were slaughtered last two weeks.  They both currently sport a small bull flag att he 23% retrace area.  A break out and I will buy both.  They gave me a buy signal on Friday but I preferred to not enter anything until Monday.

Miners Breaking Out

I started buying miners last week with GDXJ, and the juniors were threatening for a week.  Today, they are breaking out.  Gold up, oil down, miners beat up makes for a low risk trade.  MACD and Moving averages are now confirming.  I also have some AEM, bought earlier, but underwater on it so far.

IAG, EGO, GDXJ, AEM, and NG are in my portfolio.

EDZ- The perfect antidote for a stock market panic

Contrary to common belief, as the U.S. struggles, the world will be forced back into finding real dollars, and abandoning the emerging markets, why?  It all has to do with leverage. The dollars that circulate pale in comparison to that which is borrowed into existence to fund speculation.

We are now entering the third speculation rinse out in a decade, and this will cause a rush for real dollars.  EDZ is a prime beneficiaey of this move, and I easily can foresee a revisit to new highs.

I currently own some shares, and will add on this upcoming relief rally (dollar weakness), but options are nice for some additional leverage.  Right now the vol is too high to buy options, but I will sell strike 15 puts to pick up some share at a discount, and will buy Jan 12 calls OTM that will give me potential 5 to 1 return at my target price.

On a shorter time frame you can see a cup formed and now I suspect a handle before we really breakout.

This chart blows me away

Look at the massive divergence in the price of the miners to the gold/oil ratio.  Something has to give here.

SLV fib lines

I currently have a sell on Silver, but this fib line is holding for now.

AEM- Next Long Setup

Watching $63.20 area.  I also would not be surprised to see the gap filled first though.

GLD-Trading plan

XG - Textbook

This stock is a traders dream.  It behaves on the momentum oscilators (hourly).

GG - A Buy on the Next Pullback

SLW credit spreads

Revving up with Revett

I repurchased Revett.  This is one of my favorite miners and looking for at least double out of this next up phase in the miners.  $4.60

GPL- The Panther is stalking.

Miner review - AG

First Majestic will be one of my major positions going into Gary's A wave.  The stock is setting itself up for this move, I like that it held above the 50% retrace.  I am expecting most of the miners I will show over the next few days to have one more down move before we lift higher.  Cycle work and T/A are in alignment.  I intend to buy calls but will also sell put spreads on the next OS condition, on the daily, most likely the 15/12.50 August spread, and the September15 call.  I will follow the same trading pattern on all of the subsequent charts I will show on the miners.