Sunday, April 27, 2014

I am Pretty Short

Next week is Fed week, and the hope is the taper is tapered, but it will not be.  The government just raked in enormous amounts of tax revenue, and this will continue as most loss carry forwards are now being exhausted, and there is plenty of cap gains.  There is no need for the credit from the government until at least June.  The second hope is the economy is reviving on its own.  Credit growth and velocity does not bear this out.  Income stagnation with higher health, food, and energy costs/taxes will further retard the animal spirits. China's implosion and Russian sabres also will not help.

My signals confirm this on commodities and I am pretty much short them all.  Gold and miners are catching a Russian lift, but they will not be able to resist the taper news, and will fall along with energy into the summer. As you can see from my portfolio along with my option posts I am defensive, and will remain so.  Unless I am wrong about the taper, it is difficult to see new highs and commodities continuing their ascent.

On another note, I was very pleased with the response and interest I received on my Trust Deed post I did two weeks ago.  You can view it here.  or you can just go to my landing page at  

As a stock trader the best way to equate Trust Deed Investing is to think of these investments as selling deep in the money calls (30 to 40%) on a low beta stock, yet still receive 10 to 12% annual yield, with no commission fees. It takes a pretty severe market dislocation  to lose any principal.  The reason for me pounding the table on this is my view volatility is going to get and remain elevated for quite some time and the chop is going to destroy a lot of portfolios. Investing in the right Trust Deeds that you own is calm and rewarding, and is a very good alternative investment. This is also how the rich invest; high yields over secured with real collateral.

Disclaimer; I am not a broker nor get compensated for selling these Trust Deeds.  I work for the company in other capacities and am a strong believer in them.

Please click to enlarge the charts, and go to my marketing site if you wish to get more trades.

Sunday, April 20, 2014

Just a Short Note

Slipping in a quick post this weekend as I am remembering and celebrating Easter.
I think the miners are ripe for a fall, and am short with DUST in the portfolio and NUGT puts personally.  I see 25 for NUGT and 40 to 50 for DUST.  Also the on chart that looks like there is some room to run lower is GOLD.

It broke into my sell zone, made a lower high, in price, Stochs and RSI, and is struggling at the 200.  I will buy some May 75s, and offset them with weekly 70's.

Also, I will not trade or post trades or stock of the day on tuesday.  I have a travel day.  Thanks.

Sunday, April 13, 2014

Tapering is Deflationary

As has been my theme all along, the tapering is happening  because the only reason we are QE'ing is because the Fed is the only entity that will buy bonds at this price, and the government does not need them to buy since the cash flow into the Treasury is so strong, and will remain strong through June.

This means risk off, because the heroin flow is reduced, and the general downtrend in the broad indexes, and a strong downtrend in high beta will continue.  I will continue to hold SPXU, and watching for my target on BIS to reduce my size.

Regarding commodities, my signals are still telling me to short them, and I know oil and nat Gas has defied me, but I will continue to take shots at it.  The same with gold and the miners.  I bought DUST at 24.09, it promptly went red by 20% and now almost to break even again, in one week.  I see DUST in the mid to high 30's, and I see gold and silver rolling over this week, and see gold hit 115 by the end of May.  I hold May 1 125 puts.   I also am holding May GASL 37 puts.

Having said all that, this week is Easter week, tax day, and OPEX week, and we will get a rip your face off short covering rally.  I will cut my SPXU position in half, probably the same on BIS and will buy XIV, and offer a UVXY trade for my subscribers.  The following week the downtrend will continue.

The portfolio continues to perform very well, and superbly against the SPY benchmark.  I also posted yesterday on Real Estate, and First Trust Deed investing, why I do it, and whom I'd recommend you should work with if you are into real estate, and if you like a very smart diversification option.

If you wish to subscribe please go to


Please enjoy the charts and click on them to enlarge them.

Saturday, April 12, 2014

Something Different

I am going to post my regular weekend report tomorrow morning as usual, but wanted to talk about real estate investing, and in particular investing in what is known as First Trust Deed investments.  As many already know, there are a number of ways to invest in real estate.

  • Buy a home for your family,, and as a long term investment. I own one
  • Buy a rental property in a different market than you live in with enough down that it cash flows for you, as part of your wealth building strategy. Letting renters help you build this wealth. I own one.
  • Get into the home flipping game.  I stayed away as it takes a eye for value, contractors skill in sizing up repairs, and a lot of cash flow and courage to make money.  Oh and your timing needs to be right.  In CA this market is a loser as of the first quarter.
  • Own a REIT, or get in a real estate pool.  I stayed away as all I own is a promise, and if something goes wrong, well get in line as when you read the fine print you may find your place in line may not allow you a recovery.
  • The last one I want to discuss, as it is where I hold most of my wealth, even more than the stock market, is in first Trust Deeds.  I have owned these since 2006, as a diversification, and as a low volatility way to make above average returns, hold actual first in line title to the property in case of a default by the borrower, and enough equity in the property to return your investment to you if you must take the property from the borrower.  Even in 2008 when the real estate market seized up, in nearly every market a properly underwritten loan paid off for these lenders.  Personally, I have suffered no loss, and only had to adjust interest payment for the borrower during that time so they could cash flow and stay current.  I am still in them today. 
Being first in line, with properly underwritten investments is the key, because not all First Trust Deed loans are alike.
    • There are the fix and flip loans to "investors"
    • There are loans to buy out of foreclosures
    • There are the credit repair loans to dinged homeowners with a lot of equity using their balance sheet to repair their ratios and wait out FICO
    • Commercial loans
    • The new construction market, with professional borrowers.
I give you this and my background on First Trust Deeds, as I view them as an essential part of your wealth strategy, wanted to introduce a company that I consult for, the owner of which is a friend of mine.  (Disclosure, I am not a broker and do not sell these loans, nor will I paid on these loans.  I work for all three of his companies, not just this one)

The company is Ignite Funding  They are a private lender to the new construction building industry, (in business since 1995) and they are growing very fast because they are making their clients a lot of money.  In fact they have funded nearly 150 million in loans at an average return for their investors of 10.9% and NO losses in the last three years.  In 2014, they are growing at a record pace again, of over 30%.

The reason is they are dealing with professional builders, in growing markets, with nice homes, and your investment is secured by the real estate your investment is tied to.  You are the bank.  They protect their investors with 30-40% equity on average, and keep the loans to a year or less in most cases to further reduce investor risks in a now fast changing investment value environment.

But let me allow them to tell you their story.  Please go to
and hear more.  Sign up so they can verify you are suitable to make this investment, and that they can legally send you future loans to review and consider.  They currently have over 1250 active investors, are servicing over $53 million in active loans, and will write 7-8 million in new loans every month this year.  Their loans are in such demand that they subscribe within 2-3 days of becoming available.  

Also, they will never ask you to buy a product, never personally hold your money (always through escrow), and the borrower pays all fees on any loan you would invest into. you'll like these guys, 94% of investors reinvest.  Thanks for letting me pitch these guys.

Sunday, April 6, 2014

My Signals Work

I usually soft sell my service, but this week I'd like you to read the past few weeks of my posts, and to go to my sister free site , and see my macro picks, my portfolio results, and my option picks.  My signal is not some black box, but a well thought out two part system that simply works.  If you agree, and want to make consistently good money without trading like a wild person give us a shot.  Also, I am going to hold a training event on the 24th of April at 5pm Pacific time to show you the signals and strategies I use to pick and trade options.  The signups on on my marketing site at  As always we have a satisfaction guarantee of a full refund if you are not satisfied.

Now to the market, with the momo's and biotech falling hard, and I think with their bubbles burst, the market is going to struggle some here.  There is a very logical reason for this; the government is awash with cash and does not need the Fed to fund them until June comes.  This means the casino has less chips riding, and in two weeks more cash is going from the rich to the government in the form of tax payments.

For the commodities, I think they roll over, as well. The economy is punk, the dollar is firming, and liquidity is being constrained.

Finally, it looks like the volatility index is positioned for its next up cycle.

For me, I am going to add VXX and DUST at some point this week, trim my miner positions, and trim my oil services positions. Last week, I added BIS, and MNKD as long term positions, and will be tweaking some size as necessary, in both.

I will post out free charts all week on the free site mentioned above, and will post out option opportunity as they become apparent to my subscribers.  Enjoy the week.

Click to enlarge the charts.