Monday, January 2, 2012

Happy New Year

Happy New Year everybody, this is going to be an exciting year. To me, this is a year of forced decisions;  the FED and the ECB can no longer massage the markets with soothing words or incremental actions.  They will print aggressively or step aside.  Hmmmm, I wonder what they will choose.

The sovereign nations must make some decisions themselves.  Austerity will not work, and they will either choose to relieve their people's burdens or their elite.  My view is they will opt to force the ECB and their banks to fully engage in this monetization of the debt they started last month, thus pushing the problem out 1-2 years.

Our "Independent" Central Bank will crumble (or align, depending on your conspiracy views of the FED and the World Socialists) under political pressure and will print hard going into the election season.  China and Japan are already in full ease mode as they look into the abyss of collapsing exports.

This leaves decisions for us as traders and investors, and in order for me to look forward, I must look back.  What I saw that worked best for me was to take larger trades around extreme momentum and A/D areas "after " they showed reversals and to watch for the cycle turns. So I refined my Technical indicators to give me the best shot at my trades and keep me on the right side of these trends.  I also took off leverage and traded straight shares more, focused more on a smaller universe of stocks, yet at the same time expanded from my focus on gold/silver miners only.  My categories are grouped in the following manner:

  • Four Horseman of High Beta- AMZN, AAPL, GOOG, CMG
  • Miner Juniors- EXK, AG, AXU, NG, IAG, RIC, SWC, MCP
  • Energy-TPLM, PCX, HAL
  • Dollar-EDC, EDZ
For the ETF's I am either long or short those or a derivative such as SSO, ZSL, SDS, etc. The Horsemen, I play long only at extremes with options, the remainder I am in long only on my signals to buy them.  My favorite is AG.

I think it is going to be a big year for commodities.

So going forward this is where you will see my focus on the blog.  I will tweak these over time if I see an opportunity but the beta and volatility will allow me to make plenty of money with these.

I am also going to try to Twitter this year.  This blog has had nearly 100,000 page views in the past 2 years with me just dabbling.  I intend to be more intentional, and to also add some actionable trades real time (please read my disclaimer though).

I am going to tweet my SPY buy and sell signal, and what I do with the signal is buy either SSO or SDS, and will set a weekly sold call over it to increase the odds of a profitable trade.  Depending how aggressive you are is how you play it (hedge it or not hedge it).  This signal will chop in consolidation, but will more than make it up on the trend runs we are getting 1-2 times a month.  It's free, so follow me if you like @Bobloveshawaii.

My sell signal hit on Friday PM, so I am in SDS, but I do not trust the low volume EOY action so I sold 1/6/12, 19 calls. My view is we start the week on a positive note, so will see if my signal reverses on Tuesday.

I am long the miners, energy and GLD on my signals.

Happy trading.

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