Weekend Update

The last two weeks are for the record books.  We had the biggest one day move in the Vix, and a 4.5 sigma move in SPY.  A 400 plus year event.  I suspect we are not down with the superlatives yet.  On Friday I got another buy signal on TVIX, and SPY/ES was stopped at some strong resistance areas.

My suspicions are that we have a cup formed, and a possibility of a move to 2017, or it fails here and a move back down to the lows until Fed day.  Pretty confident the highs are in for the year.

The portfolios were rocked.  They are not designed for such a move.  They will normalize after the Fed meeting. I am in cash on the 50K to a million challenge per the signal, and still 50/50 on the Ultimate portfolio.  The latter is now performing just under the SPY for the reporting period.

Our individual Option plays have done very well, and ES is being traded on 1,5,and15 minute now.

We only have a TVIX trade on, at the moment.  Staying very tactical for now.

Exeter Lives

If you believe as I do that the governments of the world have shot their load, and for whatever reason (politically, economically, or culturally) can't keep expanding their debt loads, means one thing.

EXETER Pyramid is activated.

First an explanation.  Exeter surmised that when the animal spirits are roaming free, investment activity drifts up the pyramid, and the reverse is true in a panic.  Why this is, is when people are feeling great they take on more risk, and more debt, and when conditions change they sell an asset that may no longer produce returns they desire, or in fact start losing money. They may voluntarily or forcibly liquidate the debt.  Then it gets interesting, as most people pledge assets as collateral, but the value of the collateral also may fall, thus forcing them to sell other assets, and if this affects enough people you cause a cascade, and a panic into the most trusted assets.

China has started that cascade.  Many on our shores have not seen seen the approaching Hurricane yet, but is rumbling through the BRICS (less India, but add Australia, the Middle East and Canada) through the utter collapse of commodity prices.  That is DEFCON TWO in the Pyramid.  At the same time emerging market debt and stock markets are getting pummelled, and in the last quarter, our junk related, and commodity related debt markets are breaking down.  We also are seeing stress in the Muni market and a stealth bear market in many stocks DEFCON THREE.

Last weeks complete wipe out of the of the entire market gains for 2015, and the Corporate Bond Market being saturated, and companies debt to income ratios at extremes, and gold waking up, I claim DEFCON FOUR has begun.

There will be a panic into U.S. dollars and investments, and into gold.  At first, the bond markets will see the best returns (forget the FED's blathering about raising interest rates), but usually will lend some support to our stock market, in the short term, as well. But our markets are so overvalued, and revenue growth going negative, this safe haven may have already run it's course.  Gold will see continued interest.

If someone asked me what shall I do with my money now, Treasuries, gold, and cash.  Oh, and hang on.  

If Trading, short Biotech and Apple is my theme.  Both are way overvalued and form the bulk of the gains in our markets in recent years.  Biotech will get  unpleasent attention this election cycle now that everyone must pay the first $4-8000 of their healthcare (on top of the 10-20 grand health insurance tax) and will start questioning these outsized profits at their families expense.  I know I am. Apple is out of must have ideas, global markets are retrenching, and current products will be commoditized.  I am sure there are more.

I don't think DEFCON FIVE hits on this next flush.

Life is getting interesting, again.

ES Chart

Morning Update Early

Well, the cup and handle to 2000 is nearly played out.  Amazing that the math is working so easily. The ride was wild though.  I think we need to look to end the week with a touch at 2017.  We'll see.

I took off the SVXY portion of the $50K to $1,000,000 challenge.  The backwardation will make this a sluggish trade for a while.  I also left the Ultimate portfolio at 50/50.  It will stay there through the Fed meeting.

NADEX was a winner today, and will put a sell trade on at 2022 if we can get it up to $25.

Our AAPL calls were a winner and we closed them, and we got a sell on IWM and a buy on GLD today.  But the choppiness may see us right back out of them.

Morning Update

1962 is a big number today.  We broke out of the second cup and handle, and that target is 2000.  The overnight high is now forming an hourly bull flag, and if 1962 is breached I see no reason why the cup will not complete.  Well see.

Planning no changes to either of my portfolios, and AAPL calls are foing well, and will get another boost this morning.

Bought NADEX 1934's for EOD.

We closed for a profit our GLD short and IWM puts.  The tally so far on ES since last Tuesday is 340 points.  I am long again.

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Morning Update

Good Morning.  It has been another wild set of days with Monday and yesterday one for the record books.

First my Ultimate portfolio is still sitting at 50/50.  I am likely to keep it there until the Yellen Fed meeting.

The $50K to $1 million challenge is back on long SVXY.

NADEX was untradeable for me these last two days.  These end of day redemptions and margin calls are scary, and it is OK to step away for a few days.  Watching the open for some clues.

ES trading for swings is impossible with volatility too high.  I can't set the stops wide enough that is still prudent enough.  However, I have had the best 5 days of trading the ES in my career.  Over 300 ES points gained, using only 1-2 contracts.  Trading either the one, five, or fifteen minute intervals.  I will show you my signal and process when I do my Webinar (more on that, this weekend).

We are also short and profitable on IWM and GLD.

The market is in a big pennant right now, and I still thinks it breaks down out of it.

Morning Update

I am a little sleepy this morning.  I stayed up to trade ES back to the ES overnight gap fill.  I am looking for a generally up day today, but we are still in a wicked downtrend.

The Ultimate Portfolio is sitting at 50/50, but am looking to change to a 70/30 favoring XIV on Monday.

The 50K to 1 million challenge had us buying SVXY again.  Likely it will remain bought today.

Our NADEX buy at the S3 succumbed to the end of the day marrket fall.  Will place today's bet at the open.  However, I posted a speculative purchase of 2020 that is still on, and slightly profitable right now.

Our IWM put spread has the 117 sold leg expiring today.  I intend to roll it into next week, not sure of the strike yet.  Trade is nicely profitable.

BIS trade is on from $28.50, and will stop a stop on it today.  This stock will get a lot of attention from me as I think Biotech is grossly overvalued and will get a lot of unanted attention as the elections loom.

My gold put spread has a sold leg expiring worthless today.  Looking to flip this into a credit spread. A slight loss on this as it was a out of the money trade to begin with.

I also bought UVXY puts again.  Expecting this fever to break early next week.

Good trading all.