Some Charts

I thought this week I'd get a little tactical and put up three areas where my signal flashed an intermediate sell signal.  For me I will choose the route of buying puts on the ultra long option in these sectors.  Note, it is possible that we can get strength in these for a week or two yet, but my signal is very reliable 60 days out.

I leaned a little long going into the weekend as I think the Republicans main event is the debt ceiling, we get a compromise or punt, get a relief rally, and then the main event.  This CR issue is a sideshow to show seriousness.  What is amazing to me is how the Republicans constantly maneuver themselves into a corner, take a strong hand and turn it into a loser. A lot of people are going to lose a lot of money very quickly and it will be tied to Boehner.

My signals are showing that the dollar is about to turn sharply higher, therefore, energy, high beta, and emerging markets are most at risk, and that is where I am focussing my trades.  I am also still short FAS, GLD,  and NUGT with puts, and with a DUST position.  I am long with XIV, and still have a UCO trade on that I will close this week.  I am giving XIV another $.50 to see if any compromise causes vol selling.  Any further weakness in XIV on the weekly puts us in a 4-6 week high volatility period.  That makes sense based on the other chart patterns I see.

Enjoy.

Recognition Event

I don't think we can underestimate the news from the Fed on Wednesday.  Chairman Bernanke has not been in the business of faking out investors, unless they are very scared.  They ought to be scared.  Even though we are fed a daily dose of everything is getting better by the Ministry of Truth (Main Stream Media) to keep everyone in the game, the Fed knows the real truth, and the market simply cannot absorb higher interest rates, and the market cannot maintain its rise without the banks leveraging in Bernanke bucks.  It is as simple as that.

So that leaves us with no taper, ever, until energy and food prices absolutely require the end to the Fed. Until then we will get no taper announcements, with constant noise about potential tapers at the next meeting to keep the speculators from getting too far ahead.

For us trading will get fun again.  The days of the numbingly boring overnight ramp and all day flat line, or overnight smackdown in metals and miners are over.  Swing trading will be back in vogue.

A note on the Wednesday ramp and Friday takedown.  I believe it was due to the market makers and large speculators being on the wrong side of the Fed two days before OPEX closing, and GDX rebalancing.  We are going to see what early next week brings to get a better sense

My daily buy signals on GLD, UGL, SLV, and AGQ are all still intact.  The miners signal flipped short as did FAS and SPY, and I need to see if the rebalancing is the reason, but I sold and shorted anyway.  I had a great week as I went long with leverage going into the Fed, and I scaled out of my leverage on Wednesday and Thursday, and closed my core miners on Friday. There is a tendency for traders to hold after big gains in the hope of another 2011 ramp, especially those holding 2-3X positions.  The days of the robots and overnight trading makes it difficult to be a buy and holder.  You can still profitably participate in any trend scaling in and out

I humbly offer what I do.

When I get a buy signal I buy 1/2 of the total amount I will buy, and will buy on on every down day and sell on every up day until I am fully positioned. The amount I buy and sell is dependent on the percentage of the daily move.  For leveraged ETF's I am buying and selling 10% for every 1%, for non leverage I am 25% for every 1%.  I close my position completely when my sell signal hits.  I will hold 6-10 positions max, with XIV being my largest when fully invested.  Other than XIV, no other position is greater than 15% of my portfolio.  I will buy long or short positions.

My signals are based on a proprietary signal looking at extreme moves and reversals in momentum on the daily, and I am usually in trades using this method 7-30 trading days.  I am consistently profitable as I keep working my basis down, and harvesting profits.

I like this approach better than moving stops or all in or all out methods.  I have found that just moving stops up keeps traders from re-entering if it was just a stop run, and missing a bigger move higher and I hate the big overnight reversal and gap downs.  I rather be buying into those gap downs with money I pocketed the day before then talking to myself all day about why I did not sell.

As most of you know I offer a buy and sell signal service, and now I am upgrading the service and am in the process of automating this in a bot, if anyone is interested in learning more email meat support@realtimetradingsignals.com

I also am automating my ES mini and Crude mini futures signals and if there is enough interest in receiving an automated buy and sell price signal via text let me know. It is based on a hourly signal so you are not trading like a bandit. The signal is currently producing pretty extraordinary net results, and I am happy to share results on an individual basis for those truly interested.  I will limit how many people I will offer this signal to.

Enjoy the week.

Calling Miners up from the Minor League

Just when we all start enjoying the move higher in the miners, we get a pretty hard selloff.  But I want to put it into perspective.  Nearly all of the miners I follow have recharged their relative strength on the daily, and are sporting a higher low and a higher high.  Everyone needs to remember this is not 2011 all over again. Oversold and overbought rules are going to apply.

When NUGT was trading in the single digits I traded it pretty aggressively, but when they split it 1 for 10, it was such a juicy target for the bears that I stayed away; and we had oil rising due to the fake war narrative we were being fed, so that also puts pressure on the space.

Now that news is behind us, the Fed in front of us, focus is back on liquidity, and on Friday I had across the board buy signals on my miners, smart money positioning.  I am long SLW, AG, and PPP, plus a GLD 135 Sept week 4 long position (closed the 145 sold leg on the down move)  Monday and Tuesday I will get to full positions on all three (I have been scaling in and out to work my average price down).  My if I am wrong sell stop will be Thursday's low, after the Fed news.

On other news, I see silver and gold moving higher, FAS, SPY, and oil moving lower after the announcement and am and will be positioned accordingly. In FAS puts, SCO shares, and moving up a conditional ever day on SPY for a put spread.

For those buying, selling, and in the mortgage business, I see rates have topped here for the foreseeable future.


Enjoy the charts.

Syriana Screwtape(r) letters

What a mess.  Our Government and the Fed are now juggling dynamite. Syria and the taper news has this market on edge. Metals are holding up, utilities and bonds are bottoming, and the hot money is hiding out in oil.

Personally I'd be shocked if we tapered and we went to war with Syria. All downside and limited upside. That is not a bet politicians make.  If I am right we will  get our last hurrah with SPY, and all of the commodities move higher except for oil.  But I am a little ahead of myself.  At the moment my portfolio is pretty light with only oil servicing companies (BHI) and my core miners, (AG, PPP, SLW, and ANV).  I have a MNKD lottery position, as well.

For those who follow my NUGT calls, we are building that position back up.  For the next ten days I will dabble with some option trades if my prices are hit, and will be watching HOV and DRN for potential swing positions.  I will share those buys with my paid subscribers.

Also, if you are interested on Tuesday afternoon I am doing a free webinar to just talk charts, the macro environment, trading, or whatever is on your mind.  It is free, and these are usually pretty fun.

http://www.realtimetradingsignals.com/free_webinar_registration.html

Enjoy some charts and have a great week.

Cross Currents

I am officially back from vacation, and ready to go into a sure to be interesting fall season.  The Syria news and the taper news has this market on tenterhooks.  In some way I believe they are related.  For the past eight months our deficit has been falling, and the Fed has probably bought all of the paper they dare to without disrupting the the bond/currency markets.  The Federal spending machine is getting anxious as new spending is what is required to secure new votes and voters.  Sequestration is strangling all of that.

What the market needs now is fresh capital and velocity.  Nothing like a little war and some govt spending to get the animal juices flowing, and the sequester set aside.  What is funny, ironic, and sad, is people predicted this six months ago, to the month.  We have gotten that transparent, and desperate.  The Administration, ours and the British did not expect the backlash against this war, and now confusion reigns.  I think they figure out a way to intervene, and I fear an unexpected reprisal.  In the meantime this is a very news driven market, and that is very dangerous, especially in September and October.

I am staying very light and relatively hedged.  I am long oil, short SPY, and long miners.  I am counting on no taper to occur, ever.  This will drive energy higher, and cause the equity markets to falter.  Miners will continue to move higher as a reversion to the mean trade.  I will continue to look for opportunities to buy XIV for either a day or a swing trade, and will scale in and out of current positions to improve my cost basis as I await the bigger moves I expect this fall.

My published portfolio 60% invested, 70/30 long/short, with an annualized gain of nearly 20% this year (all transaction costs included).  My individual picks are 141.8% on 268 picks, (no transaction costs included and no size of trades suggested).  I trade and offer for a basket of 50 focus stocks I follow, using my buy / sell trade signals.  Find out more at  http://www.realtimetradingsignals.com/

Good trading this week.