SUPER trade with the (XIV). Thank you John!
I happened to be in front of my screens, when the alert came in. I saw it on the 5-minute divergence between price and RSI and went long at 27.60.
I?m at dinner just now and I got your ?take profit? Trade Alert.
I checked the chart and found we were at the 61.8% retracement of yesterday's move and took profits perfectly at $29.83. I took in an 8.08% profit in one day. That?s $818.41 less $4 bucks in commissions.
Nice, nice trade.
Thank you again John. Thank you for your call the other day.
Have a nice weekend coming up.
Semper Fi from Germany
Yours,
Jay
California is called the ?Golden State? for a good reason.
Countless fortunes have been made in mining, farming, real estate, tourism, movie making, aircraft manufacturing, aerospace, and more recently, in technology and pot growing.
The Google (GOOG) and Facebook (FB) IPO?s each minted 1,000 millionaires, and Twitter?s (TWTR) deal is said to have produced 1,600 more.
Recently, a lucky couple found the real thing while hiking ?somewhere in Northern California.?
Spotting an old, rusted out tin can, they started digging. To their utter amazement they uncovered five cans containing 1,427 gold coins worth more than $10 million.
Speculation ran rampant as to the original source of the cache. During the Mexican period prior to 1848, the notorious bandit, Joaquin Murrieta, killed more than 40 people in robberies up and down the state. The booty was never found.
Black Bart waylaid 28 Wells Fargo (WFC) stagecoaches in Northern California in the 1880?s, and said he buried the loot near an old oak tree.
Some even postulated that the coins belonged to the sole surviving member of the Jesse James gang, who retrieved the gold on his release from prison in Missouri and then moved to California.
Things got really interesting when my old friend, Don Kagin of Kagin?s, Inc., got involved (click here for his site).
Don has been the feature of several of my past pieces about rare and exotic coins (click here for ?The Mystery of the Brasher Doubloon?).
After close inspection, Don concluded that the coins were in mint, unissued condition dating from 1847 to 1894. One coin alone, an 1866 Liberty $20 gold piece, is worth more than $1 million.
Don?s take is that the coins were stolen during an inside job at the San Francisco Mint in 1900, one of the few buildings to survive the 1906 earthquake. The surrounding fires burned so hot, that the gold coins inside melted.
The building still stands today. However, it is structurally unsound to continue as a Treasury building, so it is rented out for parties. If that is the case, the coins are still the property of the US government.
But the US Treasury never filed a claim, lacking the documentary evidence dating back to the period.
The government has done this many times in the past, fighting a ten year legal battle to recovers some stolen, unissued 1933 gold double eagle?s, the last minted prior to Franklin Delano Roosevelt?s ban on private gold ownership.
One of these sold for $7,590,000 in 2002, making it the world?s most valuable coin. The government won in that case.
The find sparked a stampede of similar gold seekers, turning hills into suspected neighborhoods into Swiss cheese.
Too bad the lucky hikers didn?t find their cache five years earlier. Since then the price of the barbarous relic has fallen by 45%.
So Hiking Pays Off After All
?It?s a funny thing about life. If you refuse to accept anything but the best, you very often get it,? said British Novelist, Somerset Maugham.
Global Market Comments
December 4, 2015
Fiat Lux
Featured Trade:
(MR. MARIO?S BIG SURPRISE),
(FXE), (EUO), (HEDJ), (TLT), (TBT),
(WHY WATER WILL SOON BE WORTH MORE THAN OIL),
(CGW), (PHO), (FIW), (TTEK), (PNR),
(TESTIMONIAL)
CurrencyShares Euro ETF (FXE)
ProShares UltraShort Euro (EUO)
WisdomTree Europe Hedged Equity ETF (HEDJ)
iShares 20+ Year Treasury Bond (TLT)
ProShares UltraShort 20+ Year Treasury (TBT)
Guggenheim S&P Global Water ETF (CGW)
PowerShares Water Resources ETF (PHO)
First Trust ISE Water ETF (FIW)
Tetra Tech, Inc. (TTEK)
Pentair plc (PNR)
ECB president Mario Draghi certainly let go of a lead balloon today.
Instead of announcing a 20 basis point cut in Euro interest rates, we only got 10.
The world blew apart.
The Euro rocketed against the dollar some 3.5% in minutes, the best gain since 2009, and one of the top ten moves of all time for the beleaguered continental currency.
US Treasury bonds crashed, giving up $3, and popping yields from 2.18% to 2.32%. Stocks fell to pieces globally. The Volatility Index (VIX) went through he roof.
Never mind that Draghi announced an extension of European quantitative easing by six more months to March 2017, or that the number of qualified securities for the central bank could buy was expanded.
All traders wanted was one more rally before yearend into which they could unload their sizable Euro shorts. When they didn?t get it, they panicked and stampeded for the exits.
It was your classic flash fire in the movie theater.
This is what happens when positioning in financial markets gets too one-sided. Risk managers talk about too many passengers in one side of the canoe. Everyone gets to go swimming.
That is why I quit rolling down the strikes on my Euro shorts three weeks ago, loathe to sell to much at the bottom. My one remaining short Euro position successfully weathered today?s spike, is still in the money, and only has ten trading until expiration.
The important takeaway here is that today?s moves were entirely technical, and had nothing to do with fundamentals, which always win out over time.
The meteoric move in the Euro did not occur because of a sudden burst of strength in the European economy. It didn?t take place because the ECB is raising rates.
So, I think this entire move is bogus. It is a typical December event, where all of the hot money wants to get out of the market within the next four weeks so they can close their books and start over again next year.
It is also a great lesson on what happens when you have too many hedge fund chasing the same few trades. It always ends in tears.
Which leads me to believe that the dramatic moves we saw today will reverse themselves shortly. Stocks (SPY) will soar, bonds (TLT) will rise modestly, and the Euro (FXE), (EUO) will take the express train downtown. The (VIX) will fade, again.
These gyrations could possibly take place as soon as Friday?s November nonfarm payroll report. All we need is a number north of 200,000, and it will be off to the raises once again.
I am so convinced of my convictions that I bought the Velocity Shares Daily Inverse VIX ETF (XIV) 30 minutes before the close (that?s the latest I can send out a Trade Alert and expect readers to have time to open and execute).
USE THE HEDGE FUNDS? PAIN FOR YOUR GAIN!
If you still hold a Euro short, keep it.
If you are underweight stocks, here is another fine entry point.
This is especially true for hedged European stocks (HEDJ), which have just opened an excellent entry point.
The (SPY) is only down 2.1% from its recent high, and off 3.7% from its all time high, hardly the stuff of bear markets, or even corrections.
Surprise!
I have always had a passion for the markets and the Mad Hedge Fund Trader gave me the courage to make my first trade. At the time I was unemployed and put in everything I could scrape together - about ten thousand dollars.
For me this was a free education, as the profits would pay for all the books and the fees. My father gave me some money as a gift, while telling me ?I was crazy? following ?some guy? off the internet.
Every suggestion I have taken religiously. I follow all your lead indicators from the Shanghai stock market to Dr. Copper and the jobless claims. In the last couple of months I have started doing my own successful options trades based on the extra suggestions you give in the webinars and commentaries. Often I do a trade and ten minutes later an alert comes.
My father who is worried about his future (like so many of us) is now joining the program. I am going to assist him with his first trades. Another family member has asked me to manage his money. I really feel you are helping me become a hedge fund manager with this fantastic program.
Geoff
London ? England
?
Global Market Comments
December 3, 2015
Fiat Lux
SPECIAL ISSUE ABOUT THE FAR FUTURE
Featured Trade:
(PEAKING INTO THE FUTURE WITH RAY KURZWEIL),
(GOOG), (INTC), (AAPL), (TXN)
Google Inc. (GOOG)
Intel Corporation (INTC)
Apple Inc. (AAPL)
Texas Instruments Inc. (TXN)
Global Market Comments
December 2, 2015
Fiat Lux
Featured Trade:
(THE UNICORNS ARE EATING YOUR LUNCH),
(IS USA, INC. A ?SELL?)
What would happen if I recommended a stock that had no profits, was cash flow negative, and had a net worth of negative $44 trillion?
Chances are, you would cancel your subscription to the Mad Hedge Fund Trader, demand a refund, de-friend me from you Facebook account, and delete my email address from your contact list and stop following me on Twitter.
Yet, that is precisely what my former colleague at Morgan Stanley did, technology guru Mary Meeker.
Now a partner at venture capital giant Kleiner Perkins, Mary has brought her formidable analytical talents to bear on analyzing the United States of America as a stand-alone corporation.
The bottom line: the challenges are so great they would daunt the best turnaround expert. The good news is that our problems are not hopeless or unsolvable.
The US government was a miniscule affair until the Great Depression and WWII, when it exploded in size. Since 1965 when Lyndon Johnson?s ?Great Society? began, GDP rose by 2.7 times, while entitlement spending leapt by 11.1 times.
If current trends continue, the Congressional Budget Office says that entitlements and interest payments will exceed all federal revenues by 2025.
Of course, the biggest problem is with health care spending, which will see no solution until health care costs are somehow capped. Despite spending more than any other nation, we get one of the worst results, with lagging quality of life, life spans, and infant mortality.
Some 28% of Medicare spending is devoted to a recipient?s final four months of life. Somewhere, there are emergency room cardiologists making a fortune off of this. A night in an American hospital costs 500% more than in any other country.
Social Security is an easier fix. Since it started in 1935, life expectancy has risen by 26% to 78, while the retirement age is up only 3% to 66. Any reforms have to involve raising the retirement age to at least 70, and means testing recipients.
The solutions to our other problems are simple, but require political suicide for those making the case.
For example, you could eliminate all tax deductions, including those for home mortgage deductions, charitable contributions, IRA contributions, dependents, and medical expenses, and raise $1 trillion a year. That would more than wipe out the current budget deficit in one fell swoop.
Mary reminds us that government spending on technology laid the foundations of our modern economy. If the old DARPANET had not been funded during the sixties, Google, Yahoo, eBay, Facebook, Cisco, and Oracle would be missing today.
Global Positioning Systems (GPS) were also invented by and is still run by the government and has been another great wellspring of profits (I got to use it during the 1980?s while flying across Greenland when it was still top secret).
There are a few gaping holes in Mary?s ?thought experiment?. I doubt she knows that the Treasury Department carries the value of America?s gold reserves, the world?s largest at 8,965 tons worth $300 billion, at only $34 an ounce, versus an actual current market price of $1,156.
Nor is she aware that our ten aircraft carriers are valued at $1 each, against an actual cost of $5 billion each in today?s dollars. And what is Yosemite worth on the open market, or Yellowstone, or the Grand Canyon? These all render her net worth calculations meaningless.
Mary expounds at length on her analysis, which you can buy in a book entitled USA Inc. at Amazon by clicking here.
Worth More Than a Dollar?
?At some point in 2016, knuckles are going to be turning white, and we'll see whatever rabbits Janet Yellen is going to have to pull out of her hat,? said David Rosenberg of Gluskin, Sheff & Associates.
