Sunday, December 30, 2012

2012 in Review, 2013, a look ahead

The markets keep getting crazier, and right now essentially untradeable, unless you are scalping.  The problem is once we finish with the exuberance of a deal with the fiscal cliff, we move right into 4th quarter earnings. Personally, I do not think they wrote estimates down far enough, so the drama continues through January.  Then we  deal with the debt limit increase.  It is not a matter of when, but if the Republicans can extract any concessions first.  I doubt it for either negotiations, but it will cause severe dislocations until it passes.

I must play defense until the debt deal is done. I will take my signals, but lighter, and will hold some hedges like last week holding UVXY calls. Then I believe, gold, silver, energy, and XIV will move higher, much higher.  The Fed's are now monetizing nearly 100% of the deficit, and the good news is that since the Federal government receives those interest payments from the Fed, this debt is phony, so no new strain to the budget.  The bad news is that the monetary base is rising in my estimate over 12%, and if velocity increases, inflation pressures will start to become intolerable.

If my scenario holds, we will get a large lift in all risk assets, then equities will fall away, with volatility rising, as energy squirts ahead, and people see the pricing at the pump, then gold, silver, and the miners will be the last man standing, before they rollover.  My view is we don't clear this initial mess until the end of February, then we zoom for six months.

Let's see how it plays out.

In 2012, I launched a paid service based on my signals.  We posted over 260 trades and the signals produced an average annualized gain of approx 70%.  The buy signals worked great, the sell signals depended on me to manually post the exits. Administratively was too much, so I now have completed the automation of both the buy and sell signal.  It takes away my bias on the trade, we don't miss any trades in the watchlist, and if we reverse back up, will get us right back in the trade.  I expect even better results in 2013.  I also decided to pare my watch-list down to 10-12 stocks/ETF's.  They are spread across gold, silver, energy, nat gas and technology sectors.  For the 1st quarter they are:

  1. FNV
  2. SLW
  3. SIL
  4. AG
  5. CDE
  6. GASL
  7. ADBE
  8. DDD
  9. XIV
  10. VXX
  11. HAL

If you are interested for 2013, the signup is located at  It is $20/month, cancel at any time.

I also am going to start sharing my SPY buy/sell on my public Twitter site @Bobloveshawaii.  Just click on the link to the right.  You also will receive nightly commentary, most nights during the week.  The SPY signal will be free for now, so you can see that it works.

Thanks for reading, and have a safe new year.

Sunday, December 23, 2012

Merry Christmas and Happy New Year

What a crazy week.  GLD was crushed, but it looks like the handle is now complete.  My only worry is there is still a gap below us to fill at 157.52.  I am setting a conditional option call buy for 160 calls for Jan if that is hit next week, if not, I will buy Jan 163 calls above 161.25.

SLV was crushed and I will play silver through SLW, SIL, AG, and CDE in 2013.  I already own AG and CDE, and am waiting buy signals on the other two.

NUGT broke below the falling wedge as I feared it might, and I have a speculative buy signal on it on Friday.  I did not take it, but may reconsider with a stop on that days low.  I am reading that first year of a new presidential cycle sees miners gain 23%, after a 18% average fall the prior year.

A market trend, indeed a business trend that is fascinating, and I think it will continue to explode is in the area of 3-D printing.

DDD is the gold standard, and even though they have run up a lot already, this market is in its infancy.  I am a buyer on all weakness, and will aim to build a core position in this in 2013.  DDD makes the actual printers and they hold the bulk of the patents.  ADBE on the other hand makes the interface and drawing software and they just completed a multi-year IHS that looks like there is a $12 move in its future.  I will build a core position in this stock, as well.  For those that get my buy signals service, Ill be trading in and out, but will be sitting on a core.

Enjoy the holiday week.

Sunday, December 16, 2012

This week-more of the same?

Well, we are still stuck in ranges in SPY, gold, silver and miners.  All of my signals are neutral except for the miners, they look ready to move higher.  I expect a higher market into the new year, and the dollar and miners may be foreshadowing some of that.

It is clear the Republicans lost the tax the rich debate, and are about to lose the spend less debate, as well.  You would think that if the Republicans are the party of the rich, they would buy candidates that can defend their positions much better than they do.  Resolution or capitulation should give the market some holiday relief

As a side note, as a dad of a elementary school child, the shootings in CT has impacted me profoundly.  I cannot even imagine the horror those families are going through.  Is it me, or is our world getting progressively sicker, corrupt, and cold hearted?

Sunday, December 9, 2012

Show me the Money

It is all about Ben.  The market is ignoring the fiscal cliff.  New asset purchases, we go higher, no asset purchases, Katy bar the door.  It seems unlikely that they will allow a market melt down while the market is digesting higher taxes.  If they do though, the Three Peaks scenario plays out and off we go to 1100.  I intend to be long biased with UVXY calls and SPY puts OTM as insurance.

It is a sad commentary we have to wait on our drug dealer to see if we can get our high on.  On Tim Knight's someone posted this chart which tells us the party is almost over and rehab or an overdose awaits.

Anyway, here are my charts.

Sunday, December 2, 2012

Coins for my cup and handles

Just two charts this week.  I see multi month breakouts coming in gold and silver.  Look at these cups and handles.  Also, twist is ending and the Fed MUST add bank credit to fund our deficits or we dive into a deflationary collapse.  We have Obama, a socialist, and Bernanke, a Keynesian, what are the odds of the latter?

As long as food and energy behave reasonably well, they will continue to juice the system.  I am thinking about ratio trades on both GLD a SLV so I can get in cheaply and ignore these wiggles.

I'd seriously like some feedback if you think my scenario is delusional.  Thanks.  Bob

Saturday, November 24, 2012


Well, we got the up move I was expecting, but not the intensity.  I expected this move would take two weeks (142 on SPY).  I guess robots are target focused and not swayed by fear or greed.  This leaves us with some thinking to do.  The easy money is made and we are in a fib chop zone.

According to the three peaks crowd, target and timing have hit for the great plunge to 1100 over the next six  weeks.  It have been extremely reliable for the past 18 months, and we must give it it's due.

The cycle guys see right translated moves and now a press to make new highs over the the next 20 trading days.

I'll follow my signals, but my gut says we overshoot the three peaks scenario, and when it is clear no deal before year end on taxes, a mad rush for the door, to 125 area.  This will take down the miners I follow, as well as energy.  Gold and silver will largely ignore this move in my opinion, and a the very least be neutral, just like the last sell off.

Now some charts

Sunday, November 18, 2012

The week ahead, up then over

Wow, the selling in the miners was breathtaking.  GDX down 15% in a week.  I made a cardinal sin in trading, I tried to front run a move higher based on my views vs my signals, and paid the price in my SIL, SLW, and NUGT trades.

Miners are extreme liquidity on, and that signals for me, defense is back in vogue.  I am now in the camp of up this week, maybe next, then over.  The potential taxes the top 100% of the population will pay next year will cause a serious drag in the economy.  No one will escape.  Remember we get the government we want. Smart money looks to be bailing, and earnings outlooks are not helping.

Personally, I will limit my play to VXX and XIV through year end, with some stabs at BOIL, GLD, and SLV.  Overnight news reversals will keep me cautious until we reprice.

My current signal have gold and silver neutral, sell (with a bounce) on  miners, bounce on SPY, XIV, and a buy on BOIL.

Here are some charts.

Sunday, November 4, 2012

The week ahead-Whipsaw

Nothing is easy.  After getting buy signals on metal and miners, the Friday panic reversal was disheartening.  The problem for me is the cause is uncertain for me.  Is it due to a short week that gave false early signals, the election, both, or a start of a new trend down.

My guess is Friday was a overreaction, and we settle down until Tuesday close.  Then all bets are off.  I can see selloffs in both scenarios of Presidential victors.  Obama win means taxes are coming and get out now, Romney, austerity is coming, so get out now.

Then Thursday, the ECB meets, and they may whisper sweet nothings to the market, the euro rises, so goes the risk markets.

I got bounced out of most positions on Friday at the open, and will wait on new buy signals.  The exception is my two silver miners AG, and SSRI held up well and did not get stopped out, interesting.

My charts are below.

Sunday, October 28, 2012

The week ahead

Gold, silver, miners, oil, SPY and natural gas are still finding bottoms, but unless the Hurricane causes some low volume games, and I think they are are all in, except for oil.  The action in AAPL and AMZN is telling for me, and the overnight SPY action from Thursday to Friday.  Anyway more thoughts embedded in my charts.

Sunday, October 21, 2012

The week ahead-Still in the channel

Please read my post from last week, it is playing out perfectly.  We are still in the channel on SPY, and we started our sharp move down.  I can see that continue until the FED meeting but expect a reversal at any moment.  DO NOT PRESS SHORTS HERE.

Gold and silver are still being guided by the robots to the next fib levels down within a tight channel. Buy the breakout of the channel.  The miners look ready to rumble, and that is an area I will invest in next week.  Our good friend BOIL is doing its thing and it looks like the next move higher is beginning.  Oil is still an area that is confusing my signals and I am still staying away.  Enjoy the charts.