?If a cop follows you for 500 miles, you?re going to get a ticket,? said Oracle of Omaha, Warren Buffet, in reference to Bank of America?s many legal problems.
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
May 10, 2016
Fiat Lux
Featured Trade:
(MAY 11 GLOBAL STRATEGY WEBINAR),
(WHY I?M SELLING US STOCKS HERE),
(SPY), (QQQ), (IWM), (VIX), (UUP),
(GLD), (GDX), (PALL), (PPLT),
(TESTIMONIAL)
SPDR S&P 500 ETF (SPY)
PowerShares QQQ ETF (QQQ)
iShares Russell 2000 (IWM)
VOLATILITY S&P 500 (^VIX)
PowerShares DB US Dollar Bullish ETF (UUP)
SPDR Gold Shares (GLD)
VanEck Vectors Gold Miners ETF (GDX)
ETFS Physical Palladium (PALL)
ETFS Physical Platinum (PPLT)
There is a method to my madness here.
With the volatility Index (VIX) popping above $16 yesterday morning, a window briefly opened that lets us earn some extra money buying a S&P 500 SPDR?s (SPY) May, 2016 $209-$214 in-the-money vertical bear put spread.
This is because we can earn excess premium on the short $209 leg of the trade.
To lose money on this position the (SPY) has to make a run at new all time highs in the coming 9 trading days.
With the US dollar (UUP) now on a definite strengthening trend I think this is impossible.
A strong dollar diminishes the foreign earnings of the big American multinationals, major components of the S&P 500.
I think it is much more likely that stocks grind down in coming weeks to first retest the unchanged on 2016 level at $2,043, and then the 200-day moving average at $2,012.
Share prices are anything but inspirational here.
Price earnings multiples are at all time highs at 19X. The calendar is hugely negative (?Sell in May?). Soggy and heavily financially engineered Q1 earnings reports came and went with a yawn.
Huge hedge fund shorts have been covered with large losses, and no one is in a rush to jump back into the short side.
Oh, and the (SPY) is bumping up against granite like two year resistance at $210 that will take months to break through in the best case.
Did I mention that US equity mutual funds have been net sellers of stock since 2014?
This position is also a hedge against what I call ?The Dreaded Flat Line of Death? scenario. This is where the market doesn?t move AT ALL over a prolonged period of time and no one makes any money, except us.
If I am right on all of this, May will come in as the most profitable month for the Mad Hedge Fund Trader Trade Alert Service in more than a year. For new subscribers, your timing is perfect!
By the way, I noticed a surge of new subscriptions right after Nyquist won the Kentucky Derby on Saturday evening.
No doubt the new readers were spending their winnings. It looks like your assessment of investment newsletters is as good as your selection of horseflesh.
And Nyquist carried the lucky number 13. Talk about an out of consensus trade!
If you can?t do the options, buy the ProShares Short S&P 500 Short Fund ETF (SH) (click here for the prospectus at http://www.proshares.com/funds/sh.html), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS) (click here for the prospectus at http://www.proshares.com/funds/sds.html).
Don?t get me wrong here. I still believe the bull market is stocks still has another 2-3 years to run. But the signs of short-term exhaustion are everywhere.
It is my job to show you how to take advantage of that fact and how to profit from nimbleness.
Time for Some Downside Protection
Go Nyquist!
First, thanks for all that you do.? To have a job that you love, and one that does so much good for so many families is a great blessing to all of us.? I am a new retiree, and a recent subscriber. I followed your posts for at least two years before pulling the trigger. Knowing that you and your group were there gave me the courage to retire?a little earlier than I would have - maybe by four or five years.
So, how do you thank someone who has given you an extra couple of years of life? Thanks for those extra years, and for the possibility of growing what we have, and might receive in the future, into something that might help our grandchildren get a good start on their educations and their lives in a few years.
Thanks,
Dave
Delta, Utah
