Back from my Break

I took some time from blogging this month as I needed a break and needed to close out my other businesses strong for the year.  Mission accomplished.  I own a solar energy company, and business is picking up nicely.  The price points and the ROI's are becoming compelling and more people are taking the plunge.

I consult for a internet marketing company, and their business is starting to explode.  Companies are spending money on marketing and they are seeing sales from it.  This company focuses on Southern California, but most new business as of late have been from around the country.  Interesting.

Finally, I work for a capital markets company, and the deal flow and client returns have been off the charts.  Investors are getting double digit returns, and the borrowers have compelling business cases and collateral, and are willing to pay those rates to access the capital.  If you are not making at least 8% on cash invested for less than a year, you seriously need to reach out to me.  The banks are stealing your savings and are lending dear.  You do not have to play that game.

I share this with you as I think I have a pretty diversified look at the economy, and most of my friends are business owners and are having very good years, as well.  My view is that 2015 will surprise to the upside, spectacularly.  Looking at all of the drama around the world will fool you.  The dollar is rising, and money / capital is pouring in.  This money will be put to work, and the stock, bond, and real estate markets will reap the benefits.  Specifically, I highlighted two bell weathers that are breaking out, and I feel will test their recent highs.  Enjoy.

www.realtimetradingsignals.com If you are interested in daily buy and sell signals.  Drop me a comment if you wish to discuss anything else.

Commodities Falling

When you are the reserve currency falling commodities are bullish for the economy, for interest rates, and for stocks.  Worldwide demand is falling, the banks are exiting the commodity business, and leveraged longs who believe the inflation story are being margined out.  As the dollar gains steam, this trend will continue as money pours in, and those who borrowed in dollars must find them no matter the price.  The dollar is dead meme is over.

There is a great chart that explains what is happening.  Exeter's pyramid of liquidity predicted this. As the economic picture darkens,  Emerging markets, and commodities take a hit first, then U.S. real estate (that is where to watch next), then the U.S. stock market, Treasuries, the dollar, and finally last man standing, gold.

Because our 10 year yield is still too high vs the Euro and the Yen, we will continue to see the 10 year fall, and that will hold up real estate in 2015.  Refi in early next year as you will see sub 3.5% 30 year mortgages.  That drop in the 10 year will hold the stock market up as those yields are arbitraged.

Only when we see earnings falter will the market turn down in a meaningful way.  In the meantime enjoy the falling prices.

www.realtimetradingsignals.com  if you are interested in my daily buy and sell signals.

Gold, My view

Gold, Vol, and SPY

I'll let my charts do the talking.

Read my daily tweets @BoblovesHawaii, get daily buy and sell signals from my paid site at www.realtimetradingsignals.com

If You are a Reluctant Bull

I have been having a number of conversations around is the bull dead, and with the market so whippy, is it worth trading.  I am not sure, but I see the September highs as the top, but I don't yet see a collapse, as the Central Banks will keep promising to start QE4, so what to do.

For me, I think selling collateralized puts weekly on SVXY (or deep in the money calls) is where I will focus for now.  I am going to stay in that posture, until 192.61 is taken out (I will adjust that support as time goes by).  My goal is to harvest 30-50% annualized cash premium and give myself a 14% cushion (won't lose money unless stock closes below Strike plus premium).  If you have the wherewithal, set a sell contract on ES below 1920 for additional piece of mind.

By doing this, you are protecting yourself somewhat for a downside move, and you are not really missing anything if we bust to new highs (which is less than 15% away).  Something to think about.

My best read going into next week is Monday/Tuesday flat to down (Monday is last POMO). Wednesday through Friday higher, and then we go and test the lows again.  If I am wrong, I am harvesting, if I am delayed I am harvesting, If I am right, I will buy VXX at ES 1920 and lower and abandon the call writing/put selling until I get another buy signal on the market.

Check out my premium picks at www.realtimetradingsignals.com

Wow

Well, my thesis for a sell off was a week off, but be that as it may in my view the volatility index is overdone and buying UVXY puts this week should pay off handsomely.  If the market is down on Monday, buy them at the end of the day, and look at the $30-32 area.  Go out to the week four October expiration.  A small investment will pay off well enough, and not be too painful if I am wrong.  Here are some charts that is driving my view.  Enjoy.

www.realtimetradingsignals.com  for my paid site.

Calm Before the Storm

I have been increasing my focus on trading volatility as it seems to respond very well to my signals.  Last week was no exception.  Had a good UVXY put trade, and XIV position trade.  Going into this week, it appears that my signal indicates further selling of volatility.  My view is the sell off is not done, and with a strong dollar earnings are going to struggle and should see more selling going into the middle of the month.

I will move my stop up on XIV, and trim all week into further strength.  I also am going to post a weekly chart of my Vol trade.  I am looking to turn $50,000 into $500,000 in five years only trading XIV and VXX without margin.  I will post my UVXY put trades but won't count them in the chart.

Subscribers will get the trades real time.  Enjoy the week.

www.realtimetradingsignals.com  for my trade signals.

VXX Watch

It looks like we have another VXX shorting opportunity ahead of us.  VXX touched the top of its downward sloping channel and fell away.  If it breaks below that trend line we are set up for a nice trade.  However, if we push higher this week, we are setting up for a very nice short trade.

VXX struggles outside of its channel.

Perspective

Now that the Fed is continuing their wind down of asset purchases, can we expect to see a market cliff dive?  From a mathematical standpoint, the answer is no.  Earnings yields on the S&P is 5.04%, with earnings expected to increase 7.34% over the next 12 months.  Compared with a 10 yield of 2.43%, statistically we can expect another 10% higher in the S&P over the next 12 months.

Debt levels are now over their long term average, but earnings are outpacing interest costs so party on Garth.  Obviously the debt burden combined with an inabilty to service the interest at a higher rate will kill the bull, but not this earnings season.  Perversely, the Fed walking away will force banks to take on more risk, and they look at these models and see that there is some more blood in these corporate rocks to squeeze.

We remain in buy the dip mode, with an expectation that we will see a more sine wave look to the market to give us some nice trading opportunities.

Enjoy the video of my watchlist.

If you want the buy signals real time, go to www.realtimetradingsignals.com

More Of The Same

The only interesting trade of interest is it looks like oil has a trade able move.  But I would not get too excited about it, or other commodities as Draghi may finally get the monetization action in the Euro zone out in the open, and that will further strengthen the dollar.  Besides, there is simply no way Obama is going to let oil prices rise into an election cycle.

The broad markets look like they are going to continue to rise, probably going into mid September, gold, silver, and the miners are uninteresting, and probably a good short if they start rolling down, and my view is volatility will squeeze down until we get closer to the Fed meeting in September.

I tried a video instead of posting charts.  If you like it I'll do more of them.  It is pretty quick and zippy.

Enjoy.  WWW.realtimetradingsignals.com  if you want real time buy and sell signals.

http://www.screencast.com/t/QCeBtlg9hud

Don't Short Yet

The Yellen news is out of the way, and next week is the week before the world comes back from summer vacation, so unless we get a geo political curve ball there is nothing in the charts that say jump ahead of the market and short it.  In  fact, it still does not even make sense to take anything off the table yet (next week is a different story).

The good deflation meme is still playing out; dollar stronger, bonds stronger, oil weaker, gold weaker, volatility weaker, institutions still buying, or at least holding, market has no choice but to stay fully invested.

I am still keeping it simple and shorting VXX through put spreads.  I can envision a sub 20 UVXY before this market rolls over.  For those in XIV, stay fully invested until 42.39 is breached (paid subscribers get a daily update on the stop).

For those who want to short GLD, a break below 122.75, buy the Sept 120-118 put spread.

Regarding my day job, we are batting a 1000 on our First Trust Deeds over the past 40 months (200 million funded, 10.9% return, 9 months average loan duration, zero investor losses(you can request a detailed performance audit on all of our investments)), and we have some nice new developments starting with our builders.  If you are looking for some nice yields (10-13% Annualized), professional, corporate borrowers, short duration (6-18 months), and a well collateralized, (60-70% loan to value range), and you are first lien title holder,  go to my landing page, and learn more.
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Please click to enlarge the charts, and go to www.realtimetradingsignals.com to subscribe to my daily trade signals)

Focus

Well, per my post last week we blew right through the crossroads, and Thursday/Friday big range days reminds me too much like 2008 all over again.  As volatility picks up, you must swing on shorter and shorter time frames,  and the mistake I made then as a leveraged trader is not getting smaller, faster, and more conservative, immediately.  Therefore I am going to get very focused, and focused on volatility.

Money is money, and I am just getting pure.  No need to look at a hundred stocks when everything is tied to volatility.  I made my most money trading XIV and UVXY puts during these elevated levels in 2011 as intraday moves can give you a weeks worth of profits.  There are a couple of trade-able edges in this environment, I have shared in the past, and will again.

Regarding gold, et al.  I am staying away as I think we are deflating, and with the Fed ending QE, I don't see a catalyst, unless gold responds positively to a hedge unwind.

On to the VIX.  I am looking for an overbought retracement (we may touch 17.80 area first), then a move higher to the 21 area.  That will give us a very nice UVXY put trade.  So for me, I have a VXX bull debit diagonal trade on Aug 29, Aug week2 29.50 (I have been opening, closing, and moving the sold leg every week) and will close he sold if we hit new highs, or a new buy signal on my expected dip.  I also bought some UVXY Aug, 30 strike puts, and will follow the signal above.  I will also point out XIV trades intraday, with tight stops.

We are back in a traders market, don't get sea sick.

www.realtimetradingsignals.com is my paid site.

Crossroads

These last two weeks feels like a change in trend is coming.  My signals are firing and failing, and I must step down in time frames to squeeze out profits.  From a macro perspective it seems to make sense, the heroin from the FED is slowly drying up, and the Fed to SPY ratio says that SPY already hit the theoretical price that the final Fed Balance sheet will reach.

Volatility has refused to go down, and the dollar is up, which informs me that big money is getting defensive and this takes another funding source away from the index algos.

Small caps and commodities are struggling, and gold, silver, and miners are trying to reestablish themselves but no big moves so far.

If the dollar breaks out, it looks like TLT, FXI, and EWJ all look like macro buys, and I will call out calls on dips.  I will also focus on TNA puts.  The metals and miners are all in the handle stage of cups, and are moving up, so will be buying dips with calls.

For volatility, I am going to be a bit of Sybill.  I am going to play with spreads on both, and manage the sold legs to profit both ways.

So those that subscribe, I will be very focused. FXI, EWJ, VXX, UVXY, TNA, GLD, SLW, and GDX. We will trade these a little faster than normal as the market, in my view will try to shake out positions more frequently.  Monday before the open, I will tweet out my current positions, and the trades expected to signal that day.

www.realtimetradingsignals.com  is my paid site.

Click to enlarge

Biotech Swings

Last week I featured metals and miners, and those trades worked out well.  I exited my NUGT, and rolled up my GLD and SLW calls.  Miners look set to take a breather here.

I also have been interested and invested in some Biotech plays, mostly situational, but that caused me to run some scans in this space.  I am glad I did.  There are a number of good buy set ups, and I share them with you below.  There are some doubles in here. Not listed, but my favorite; MNKD

Enjoy.  Please click to enlarge, and go to www.realtimetradingsignals.com to subscribe.