Tuesday Morning

Insomnia has my balls again, so here are some thoughts for Tuesday. I like the action in the following ETF's: DBA, DBC, EWM, FXY, SKF, SLV, and TWM. These seven funds have many of the fundamental and technical characteristics I think will do well in the coming months, and have been looking real good in the past few days. Agriculture recently made new highs on record wheat prices. Commodities in general have held up rather well in the recent market turmoil, Oil seems to have found support, and the precious metals are either near 52 week highs, or breaking to new ones. Of all the foreign markets I track, Malaysia has the most technical strength, and coincidently, PBS did a special on it this evening. The Yen continues to rise as Japanese investors realize how little they know about their debt exposure, and the financials continue to suffer from massive writedowns. Credit Suisse reported a 72% drop in earnings... Silver has been outperforming gold lately, and a friend of mine in the business suggested that this may be due to a cyclical lack of supply from too few mines. Finally, though the small caps have had a violent rally in the past few weeks, if the markets continue to have trouble, I suspect you will see them resume their overall underperformance. FXI continues to look bounceable and bottomish, and USO might be making a break for new highs. I'm keeping a keen eye on XHB and XLF because if there is further weakeness in homebuilders and finance, it means sentiment has really sourered, and we should expect new lows.

Back from the Dead

It has been a rather ridiculous two weeks. This blog hasn't seen too many posts, mostly due to my horrific embarassment and reluctance to get back in the game. SRS, SKF etc took HUGE plunges following my recommendations... and while I had the good sense to steer clear of the mess (after losing 2% of my capital), I feel like an idiot. The rebound seems to have abated, and the market conditions that I like have returned. Gold has continued to outperform the Dow, and Real Estate/Finance has started to continue lower. The only thing that seems amiss is overall strength of the dollar, which I expected to go lower after the Fed's 1.25% rate cut. I've slowly gotten back into shorting the market, and accumulating silver, but I'm also keeping my eye on FXI and EEB for some long term bottoming action. Commercial real estate is starting to make the news, as is credit card debt... I'm pretty certain that these will be the next bombshells to rock the credit markets, but only time will tell. So far there has been some solid safety in bonds, but I'm expecting that to change once inflation starts to become obvious in the CPI. It's fucking 5:30 am... I've got insomnia...

Before the Open

It has been a helluva week... Finally found a good pot dealer in the neighborhood, some super duper smoke, so I've been doing a lot of photo editing and not too much trading. I have a comment from a wise trader who caught the huge reversal in financials trading UYG, a solid counter trend move that I have much respect for, and seek to emulate in the future. My macro perspective of the market (weakening American economy in real estate, finance and discretionary) hindered my ability to see the obvious out performance of the aforementioned sectors in the recent mess. I got burned shorting real estate in the reversal, SRS from 130-122, though I've bought it back ~107, SKF ~102, and SCC ~94. What really caused my surprise was not the correction in SRS, but rather, the lack of upside in GDX (which proceeded to happen the next day), which gave me a helluva scare. Needless to say, I'm short the usual suspects via SCC, SRS, SKF and long precious metals via GDX, GLD and SLV yet again. Yen and Franc will continue to strengthen over the next few months as the mess spreads. IBKR had great earnings once again, but continues to struggle in the lower 30's, I guess it is hard to swim against the current. I'm still keeping a small position in BPT, huge dividend, and solid looking chart touching support. I'm also a tiny bit long energy and basic materials via UYM and DIG, but I expect to close these positions Monday, seeing as I was using them to hedge my bets over the weekend.