Nice action on Friday, with a new low followed by a 10% rally. Technically, we have set up for another 25-35% move from here. The market is making it hard to stay long, blowing thru stops, and then reversing. Next target is 1006 SPX with a final move to 1125 ish. But as Kenny Chesney says, don't blink. This could be done in a matter of days, not weeks. Good strategy here would be backspreads on your favorite blue chippers. With VIX over 60, you will be selling the meat of the vol.
Jets over Titans, ...there was once a dream called Rome.
Tuesday, November 25, 2008
Wednesday, November 12, 2008
"All the Gold in California...
...is in a bank in the middle of Beverly Hills, in somebody elses name." Austinite Larry Gatlin.
A once infamous bank robber was asked why he robbed banks. His answer, that's where the money is. In this market, you have to go where the money is. So far that has been on the short side. Looking at a slew of charts today, I can't find anything that looks positive. The one chart that is really sticking out is Gold. About 18 months ago, we broke out of a $730-$660 trading range and made new highs at $1000. So far with every other asset making new lows, this has held. Even with the dollar index on a tear from 75 to 88, the shiny metal seems to have support. GLD, the gold future ETF, made a low recently at 66. Today it settled at 70. A good trade here would be to sell some near month put spreads to finance later dated out of the money calls. I believe we can see GLD back in triple digits in a years time.
By the way, nobody is thinking about the Titans going 19-0. No respect.
A once infamous bank robber was asked why he robbed banks. His answer, that's where the money is. In this market, you have to go where the money is. So far that has been on the short side. Looking at a slew of charts today, I can't find anything that looks positive. The one chart that is really sticking out is Gold. About 18 months ago, we broke out of a $730-$660 trading range and made new highs at $1000. So far with every other asset making new lows, this has held. Even with the dollar index on a tear from 75 to 88, the shiny metal seems to have support. GLD, the gold future ETF, made a low recently at 66. Today it settled at 70. A good trade here would be to sell some near month put spreads to finance later dated out of the money calls. I believe we can see GLD back in triple digits in a years time.
By the way, nobody is thinking about the Titans going 19-0. No respect.
Wednesday, November 5, 2008
How can I miss you, if you never leave?
"Barrack Obama became the 44th U.S. President last night in a practical landslide victory. Unfortunately, the stock market melted down on fears regarding his economic leadership skills and true ability to navigate the country."
Not being too political, but the stock market really does not care who is President. People asked me about my views on the election and I told them all that since the economy was slowing, the incumbent party would not be reelected. Proof, see 2000, 1992, 1980, 1968. As for possible economic policies like higher taxes and spending, well it seems a lot of the recent weakness in the market began once the polls started to reflect an Obama win.
My main concern in this matter, is whether or not we will have to continue financing a buildup in the national security budget. Although the dollar has had a pretty good rally lately, I would not be surprised to see a test of the 72 level on the DX (about 15% decline). This is bullish for gold, bearish for bonds, and neutral for stocks.
Not being too political, but the stock market really does not care who is President. People asked me about my views on the election and I told them all that since the economy was slowing, the incumbent party would not be reelected. Proof, see 2000, 1992, 1980, 1968. As for possible economic policies like higher taxes and spending, well it seems a lot of the recent weakness in the market began once the polls started to reflect an Obama win.
My main concern in this matter, is whether or not we will have to continue financing a buildup in the national security budget. Although the dollar has had a pretty good rally lately, I would not be surprised to see a test of the 72 level on the DX (about 15% decline). This is bullish for gold, bearish for bonds, and neutral for stocks.
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