Just about everything I follow except for oil is overbought, but not a sell, and at resistance lines (I don't chase small caps or biotech). However I do have opinions and stops so I will continue to share. My view is the market is going to continue to assume Yellen will not taper based on market conditions deteriorating and will keep pressing on the dollar down and markets, and metals higher until the FOMC meeting.
In that meeting, the taper will continue or increase announcement will be made, and the market will not like it. The Fed can afford to do this as the Treasury will be overflowing in cash from tax receipts from March through May. Plus Yellen must establish her chops as a decisive leader and protector of the dollar.
If I am wrong, I already have reduced my position size in half on my portfolio and bumped up my hedge a bit, and there is no way I am putting new money to work except with DGP, over the next month.
Regarding Energy; I got a sell signal on oil on Friday from my momentum program, and I understand the cycle guys are seeing a cycle high. I recommended buying March UCO puts and Monday is not too late. Oil simply pushed to far, too fast. Natural Gas is a beast, but it is all spec and weather driven. I bought UNG April puts on Friday, as well. I am giving it time for a burst of mild weather and roll decay to give UNG a nice elevator ride down. I'll then hop off with some nice gains.
Our portfolio is doing just great, easily beating the market, and positioned to keep doing just that. If you wish to subscribe go to www.realtimetradingsignals.com.
Stock Market Commentary by full-time trader and best selling author Bob Kudla AKA "BobLovesHawaii"
Sunday, February 23, 2014
Sunday, February 16, 2014
Inflection Points
Nothing like a little snow and a long weekend to make it easy to run stocks to inflection points. Short term volatility hit it's record low on Friday and I decided to have my subscribers take profit. The most aggressive made 4X their investments. I am still holding a small position (Mar week 1 70's hedged with weekly 58's (Feb)) as I took a small SPY March put position on Thursday and Friday. OTM at 177, hedged with weekly 176's (Feb), and every week thereafter until SPY hits 178 area.
I know everyone is giddy on SPY as Yellin is the new dove in charge, but there will be no bonds for sale in March and April as we will run budget surpluses. Yellen will taper in March, and that will set off a fairly large correction into May. I am happy to be a little early, as I was in January and get my options cheap. This is not 2013, this will be a traders market. There are landmines everywhere.
Gold and miners also hit resistance areas, and I will trim my whole metals / miners part of my portfolio in half. We had a nice run, and time to get a better bite at lower prices for the next move higher.
The portfolio is doing very well, and easily beating the SPY benchmark. Enjoy the charts.
I know everyone is giddy on SPY as Yellin is the new dove in charge, but there will be no bonds for sale in March and April as we will run budget surpluses. Yellen will taper in March, and that will set off a fairly large correction into May. I am happy to be a little early, as I was in January and get my options cheap. This is not 2013, this will be a traders market. There are landmines everywhere.
Gold and miners also hit resistance areas, and I will trim my whole metals / miners part of my portfolio in half. We had a nice run, and time to get a better bite at lower prices for the next move higher.
The portfolio is doing very well, and easily beating the SPY benchmark. Enjoy the charts.
Sunday, February 9, 2014
Get Bold with Gold
We killed it last week. My signals were right on regarding volatility, and my subscribers who took the UVXY put trade I recommended made 2-X on their money, and I think UVXY hits my 40-50% retrace level and then they will make 6 to 8 times their investment. The signals also told us to close our short hedge for the broad markets, and to stay generally long the metals and miners.
My subscribers made 10 years worth of subscription fees with that one trade. Think about joining. Every month, a set up like UVXY sets up for nice gains. I am doing a training class on how I look for these trades so you can take these high probability opportunities on your own. There are more trades than I can ever show you, so I am happy to share my secret. email info@realtimetradingsignals.com for more information.
Also, I adopted a portfolio approach to my service this year as most investors can't trade every moment, and frankly many traders jump trends after they occur and then are late and in this market late is a loss. The portfolio is handily beating the broad market and with a lot less trading. I focus on four areas; volatility, energy, metals/miners, and tech. All segments have a hedge. I am long biased, as the market is, and will use hedging to manage the downturns. As an example, the market fell nearly 7 percent, and we stayed flat. Now we are strong long again (and up 4%, market down 4% year to date), and am in a good position for this retrace. I post the portfolio and performance every week below.
To the markets; I expect a follow through to the equity move as that has been the pattern, and my signals are on a buy. Yellen is before congress this week, and she is not a hawk, especially since the economic picture is so weak. The only reason why they are tapering at all is because of the amount of tax dollars that will pour into the Treasury through May. We will be pumping QE hard after that. Why? Obama Care is the largest middle Class tax ever inflicted on a population and it will grind the economy down all year, they will panic in an election year. The Fed is a hammer (QE) and all the world's (Banks) problems are a nail. This will make for an interesting trading year, at least. Long XIV, no hedge.
Energy is ripping and finally seeing some price action on my OIH and HAL positions. They are good with nice buy signals and are still a buy fo new money. Natural Gas is still weather dependent so staying away for now as it is a traders sector right now. Energy is signalling to me that they are expecting more QE, and are frontrunning Yellen. Remember, people do not drive in bad weather, and all of the refineries are in the south so weather narrative is a head fake. Long HAL and OIH, small GASX hedge.
The metals and miners are positioned for the often talked about but not realizing rip your face off rally. I expected some retrace in both last week, and we did not get it, and the playbook when ramping stocks is to whack metals and miners. Since the playbook changed, I take notice. I am well positioned long with AG, SAND, and DGP. I will set a stop on my DUST hedge.
Tech stocks. The one's that I own, I am keeping (DDD, ADSK, CREE and ADBE). I doubled my position in DDD after their earnings report, and I dropped my very profitable QID hedge on Wednesday. These are long term positions for our portfolio as I like the secular story, and will manage with size and QID hedge. I expect Tech to move with the broad market.
Have a great trading week, and enjoy the charts below.
My subscribers made 10 years worth of subscription fees with that one trade. Think about joining. Every month, a set up like UVXY sets up for nice gains. I am doing a training class on how I look for these trades so you can take these high probability opportunities on your own. There are more trades than I can ever show you, so I am happy to share my secret. email info@realtimetradingsignals.com for more information.
Also, I adopted a portfolio approach to my service this year as most investors can't trade every moment, and frankly many traders jump trends after they occur and then are late and in this market late is a loss. The portfolio is handily beating the broad market and with a lot less trading. I focus on four areas; volatility, energy, metals/miners, and tech. All segments have a hedge. I am long biased, as the market is, and will use hedging to manage the downturns. As an example, the market fell nearly 7 percent, and we stayed flat. Now we are strong long again (and up 4%, market down 4% year to date), and am in a good position for this retrace. I post the portfolio and performance every week below.
To the markets; I expect a follow through to the equity move as that has been the pattern, and my signals are on a buy. Yellen is before congress this week, and she is not a hawk, especially since the economic picture is so weak. The only reason why they are tapering at all is because of the amount of tax dollars that will pour into the Treasury through May. We will be pumping QE hard after that. Why? Obama Care is the largest middle Class tax ever inflicted on a population and it will grind the economy down all year, they will panic in an election year. The Fed is a hammer (QE) and all the world's (Banks) problems are a nail. This will make for an interesting trading year, at least. Long XIV, no hedge.
Energy is ripping and finally seeing some price action on my OIH and HAL positions. They are good with nice buy signals and are still a buy fo new money. Natural Gas is still weather dependent so staying away for now as it is a traders sector right now. Energy is signalling to me that they are expecting more QE, and are frontrunning Yellen. Remember, people do not drive in bad weather, and all of the refineries are in the south so weather narrative is a head fake. Long HAL and OIH, small GASX hedge.
The metals and miners are positioned for the often talked about but not realizing rip your face off rally. I expected some retrace in both last week, and we did not get it, and the playbook when ramping stocks is to whack metals and miners. Since the playbook changed, I take notice. I am well positioned long with AG, SAND, and DGP. I will set a stop on my DUST hedge.
Tech stocks. The one's that I own, I am keeping (DDD, ADSK, CREE and ADBE). I doubled my position in DDD after their earnings report, and I dropped my very profitable QID hedge on Wednesday. These are long term positions for our portfolio as I like the secular story, and will manage with size and QID hedge. I expect Tech to move with the broad market.
Have a great trading week, and enjoy the charts below.
Sunday, February 2, 2014
Let's talk about Volatility
As I study my charts on volatility I am seeing good news and bad. The good news is volatility is reaching extremes on the hourly, 4 hourly, daily and weekly. The bad news is volatility looks to be moving back up into its long term monthly channel. 2014 will be a traders market, and not the 4 year drone market we witnessed since 2009.
Looking at the charts, if vol does not reverse next week, and it may not (The inverted hammer is interpreted as a reversal candle but more often than not it is a continuation candle, and a cruel one), I think it will by Friday, and to me that means we will see 20 to 30% moves higher in XIV and SVXY, and 40 to 50% down moves in UVXY at minimums. These reversal have always touched the channel mid point before a move higher, and I am playing this as a normal correction and not yet a full blown decline. I think that comes later in the month or even March as the SPY tries to make a right shoulder in its attempt to ride higher. I am wrong if after next Friday the market closes below last weeks low. I hold 178 Feb puts from a month ago, and been selling weekly 177's against them.
My portfolio is also short with DUST, GASX, QID, and SPXU as a balance against my long term long positions. I
see no reason to make any wholesale changes other than to add to XIV, and watch the gold/miner positions we are in.
On the 13th of February at 2 pm Pacific Time, I am going to hold a paid webinar on trading options. I will go through four of my favorite strategies of high probability set ups that are easy to understand, watch for, and trade. $29.95 is the price, and we offer a money back guarantee. We record the seminar so you can go back and watch it again if you desire. Current Trader level clients enjoy the training for free. Email us at info@realtimetradingsignals.com for more information.
Please enjoy the charts.
Looking at the charts, if vol does not reverse next week, and it may not (The inverted hammer is interpreted as a reversal candle but more often than not it is a continuation candle, and a cruel one), I think it will by Friday, and to me that means we will see 20 to 30% moves higher in XIV and SVXY, and 40 to 50% down moves in UVXY at minimums. These reversal have always touched the channel mid point before a move higher, and I am playing this as a normal correction and not yet a full blown decline. I think that comes later in the month or even March as the SPY tries to make a right shoulder in its attempt to ride higher. I am wrong if after next Friday the market closes below last weeks low. I hold 178 Feb puts from a month ago, and been selling weekly 177's against them.
My portfolio is also short with DUST, GASX, QID, and SPXU as a balance against my long term long positions. I
see no reason to make any wholesale changes other than to add to XIV, and watch the gold/miner positions we are in.
Please enjoy the charts.
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