2014 China-Year of the Swan

It is so gratifying when the market actually goes off of auto pilot, as stock signals begin to work again.  The Central bankers from around the world have once again taken the markets to the wall, and in China's case the Great Wall, and are forced to back off.

 Japan cried uncle as their Yen selling only is producing the worst kind of inflation, higher food and energy prices.  I mean come on, Central Banking 101 tells you you cannot devalue if you must import your energy and food.  I see a long ride higher in the Yen, and ergo gold.  As that appears to have been the funding mechanism for gold selling.

China is a train wreck, and with 22 Trillion in credit on a 7 Trillion economy, most of which is either misallocated in real estate or other Potemkin projects or stolen. Nothing good is coming from the middle Kingdom.  In fact Astrophysicists will be able to observe a black hole up close this year as Chinese citizens and local governments will default, en mass.

For next week, gold, silver and the miners all hit resistance and I see some pullback as the gold contract rolls.  I see SPY / ES testing support on the 200 or the December low, and whether we bounce or not depends on how the Fed votes on Wednesday.  My guess is stay the course, and give Yellen free rein to modify policy at her first meeting.  We are getting pretty oversold on the daily and now weekly, and I see December low holding, then we form a right shoulder into March, then adios down to the 200 week.

I am not planning any changes to the portfolio this week, but will reduce long exposure on any strength and reduce short metal/miner exposure on weakness.  Good trading all.

Knocking on Heavens Door

Well gold and silver performed per the technical picture they showed last week.  Gold is now at a short term double top and overbought, same with NUGT.  My view is at worse we get a pause that refreshes, then to the next levels higher in the metals and miners.  Check this chart out from Zero Hedge.  Talk about risk.

I am watching energy, oil and drillers with increasing interest.  We are coming into the high season for oil, and last weeks big candle higher is a shot across the bow.  After this consolidation, I am looking for an assault on the recent highs.

Also, the portfolio is doing well, and am slipping more and more bearish until I see another buy signal on the broad indices.

Here are some charts with my comments.  Enjoy.

Climbing the Golden Staircase

There is a lot of talk that gold is going to $800, but it sure hit a floor at $1200.  Now we are seeing some higher highs and higher lows.  Time to buy the dips on metals and miners.  The liquidity taps will remain on full throttle throughout 2014, regardless of all of the happy talk coming out of the media.

Energy has taken a hit in early 2014, but energy drillers/servicers are waking up.  Also natural gas will have another nice move higher as cold weather sets in again this winter.

Tech is looking toppy, but most of the names I follow/trade seem to be breaking out.  They have strong macro themes (LED, 3-D and additive manufacturing) that will ignore the general economic path.  In fact, these industries will be the transforming industries to drive our next round of secular growth.  One additional area where I need to spend more time is in the robotic space, as that onslaught is now upon us.

My subscriber real time portfolio is off to a great start (see below) and I will be tweaking it for the next week (getting a bit more bearish).  For $20/month, you can receive these signals generated real time.  Sign up at www.realtimetradingsignals.com.  I trade in four market spaces; long / short.  I am continuously adjusting size so you only see detail on current holdings.  Prior closed trades our summarized.   Closed trade details are available upon request for serious inquiries.  Where you see a stock name and no position means not yet in it for 2014, or already completed my holdings for now (capital management).

Also, on Thursday at 2pm Pacific Time, I am going to hold a free webinar on the year ahead, how my signals work, and what I expect.  Please join us. Contact us at info@realtimetradingsignals.com

I hope you have a great week.

Transitions

2014 is going to be an interesting year, and next week will tell us a lot.  Many traders, including myself  are looking at 2014 as the year of the commodity.  Liquidity is still pouring in, bond market is starting to leak higher, stocks are fully valued, to say the least, emerging markets are getting nervous, so where does the money flow?

Sounds easy, but then oil drops 6% in one week, so are we facing something more deflationary?  Maybe both, so I am cautious coming out of the gate.

As I mentioned last week, I am going towards a more portfolio long short approach and how I am positioned as of Friday is slightly short broad market, short Technology, slightly long energy, and slightly long metals and miners.  Not showing is I shorted volatility through UVXY and shorted NUGT with puts.  Small and short term trades.  I am also expecting a pullback in metals next, and will double my QID position if tech weakness prevails.

Reading my graph, on the right side you will see a column that says buy/sell.  Green, yellow, red is based on what my signals say, even if I choose not to buy it, you can see the signal.  I am publishing every evening for subscribers and weekly here.  The other column shows if I  have a full, partial or no position.  My size reflects me personally, but others have different size portfolios, so they can gauge my commitment and act accordingly.  I also color code my long short categories.

If you do follow these trades, I highly suggest you pay attention to my hedges.  I may not get totally out of a position, just amp my hedge.  My goal is to trade less, with less volatility, by being in the right stocks from a macro perspective, adjusting size and hedges in order to outperform the market.

www.realtimetradingsignals.com

Happy NewYear

Happy 2014 everyone.  My themes for the new year is focus, portfolio approach, velocity and commodities. As I look back over 2013, the trading mistakes I made were two fold.  I set my stops too tight, and I was a little stubborn long miners.  I also still follow too many stocks.  So going into 2014, and actually prepping for it the last two weeks in 2013 I adopted a portfolio approach to my positions and signal service. This will complement my strengths, picking the right trading themes and good buy points.

How it works, is I adopted four themes to take long into 2014, and will hold either a full or half position nearly at all times in my longs, but will add a short hedge, usually a leveraged ETF that I will hold in a zero, half or full position depending on my signals.  My signals will work against the daily price action.  I have a margin account so I will occasionally go to 150%, and will work off of a $100,000 portfolio.  You can manage your position size accordingly.

My themes are:

• Volatility                (XIV long, SPXU as short)
• Energy                   (HAL, OIH, TAN, UNG long, GASX as short)
• Precious Metals     (SLW, SAND, SWC, AG long, DUST as short)
• Select Tech            (ADBE, ADSK, DDD, CREE as long, IWM as short)

My goal for 2014 is to produce a 40% positive return through this portfolio ($40,000 in profits) with a much reduced level of volatility.  I will post the spreadsheet results weekly, and for my Focus Subscribers they will get the trade signals real time.

In my aggressive account, I am going to trade NUGT, DUST, GLD, UVXY, AGQ puts and calls on my 4 hour signal.  These will be two to three day trades in most cases looking to capture at least a double on each shot.  I will post these only for my Trader Level clients, in real time.

For my volatility level clients, I will post my XIV long, and SPXU short pair trade, and all UVXY put signals.

You can check out www.realtimetradingsignals.com for my information and my services.

It's going to be a great year.