Dollar up, Gold up?

Yes, it is true. I have been trading the currency markets recently so the equity and commodity markets are going a little bit in slow motion for me now. Either way, the bottom line is that I have been pounding the table about buying gold for the last $150. THERE IS STILL TIME! You need to get in soon or the trade becomes very risky. I told you about the call option trade on the GLD. You got your original investment out so the capital is safe. You are now at a 265% gain. The best part about it is that there is still a TON of room to go with this trade. Easy money.

Here is another one. The trade is a little mature but I think there is still another 30-50% in the ETF. This means about another 500-1000% in this trade depending on the speed of the move. Buying the $60 Sep Calls on the (TBT) ETF. This gets you a double short on long term Treasuries. We currently have a bubble in cash and cash equivalent securities. People are so afraid of "risk" based assets like stocks and bonds now that they are putting cash in Treasuries until the proverbial coast is clear. Of course, they will flow out when it is too late and the stock market has run up considerably. That is the time to sell your shares of TBT or the options. Take your money and run with this one.

Until next time, stay low risk..

Another Tough Day...

We had a weak jobs number (although not as bad as it could have been) and continued uncertainty about the "bad bank" (otherwise known as the original plan of the TARP). That led to a sell off on the street. I am writing this right before the close and the S&P is having a hard time staying above the technically critical 850 level. Of course, a lot of that has to do with the heavy weighting of financials in the S&P.

As I have said before, the financials are not investable companies. They can be traded but NOT invested in with any heavy commitments of capital. If the government has to take these comapnies over - which is not out of the question - you will be wiped out. Trades are fine, but all long term investments should not be made until there is some clarity as to how the financial crisis plays out.

I am watching president Obama right now and I am thoroughly impressed. I am impressed that he takes the Wall St. executives to task. That is what leadership is all about. He is asking for accountability from the people who need to be the most accountable. While the Wall St. executives are asking for government money, they are still bonusing themselves outrageous sums of money. I am excited that Obama is not just going to be "one of them". So far, he has shown more leadership than any president I can recall, Democrat or Republican. Very impressive.

Tomorrow will probably set up to go lower and we should be prepared for that. Possibly getting short the SPY or QQQQ or DIA will make for a good day trade. Until next time, stay low risk..

Solid day today...

Financials led the rally today and most of them should probably be sold on the strength. The constant conversation on CNBC today has been the "good bank, bad bank" issue. The financials rallied on the news of the potential of the government doing what they originally wanted to do with the TARP. This does not make the banks solvent. It does not make them investable. They are zombies. Do not think that some pops short term mean that the coast is clear.

The place to look is Tech, Pharma, and any other company with a ton of cash. Debt is frowned upon in this market and that is the place to be. You need to be invested there not because of some calamitous issue with the credit markets. But because that is where fund managers want to be. They want to be able to tell their clients that they have those types of companies in their managed portfolios. It is truly that simple. Of course, there is certainly something to be said from an earnings standpoint with avoiding companies with a ton of debt. But the most important part is being able to tell their clients that they have the strong safe companies.

Overall, I think there are plenty of places to put cash to work in the market. Will the financials recover? Maybe. If they do it will be a glorious rally. The problem is that I don't need to take that kind of risk. There are plenty of places to make money with much less risk. Even a stock that trades at $3 can still go to $0. That is a 100% loss no matter how you cut it. No one got rich taking 100% losses.

Until next time, stay low risk..

So it's been a while...

It has been a while since I posted anything here and I apologize for that. Looking back on my posts from a month and a half ago, I have simply given away some amazingly profitable trades. I should charge for this stuff. The overall beauty of the market is that we can all essentially trade exactly the same things and make money. That's why I have no problem with giving the profits away.

Looking back on some of the past trades, the UDN trade was a little early. I still think that one is going to be outrageously profitable. It will take a little while. But as they say in trading, "being early is the same as being wrong." So I will take that as being wrong.

The GLD 2010 Call options at $145 have been very profitable. They doubled, and I told you to take half off and you are playing with the house's money. And then the options have gone ahead and doubled again. Man... that is some easy cash. By the way, there is still a LOT more upside here. The funny part is that the momentum traders are just starting to pile in to the gold trade. I am still conservatively looking for the $1500 to $2000 range for gold.

One other quick trade for you is the Oil trade. The best way to play this is DXO. It is a double long ETF with a juicy risk reward profile. It does not need to be a large part of your portfolio but it can make up a large part of your gains. It now trades a little under $3.00 per share. When oil was at $147 per barrel, it was almost $30 per share. Even if you think oil is going to $75 or $80 from here, you are looking at about $12 for DXO. That is a pretty easy one.

More next time. Until then, stay low risk.