CONFIDENCE RETURNS! [MONEY FOLLOWS] (GS,GDX,IYT,FB,UUP)

Not even Donald Trump shoots from the hip like we do at Normandy.

 

You will not get any straighter answers delivered on things that matter, without all the blather and hype, as you do here.

 

And more than that, you get it with a dash of humor, too!

 

So count yourselves among the luckiest, and possibly richest sons’a’birches in the investment world.  And all thanks to us.  The planet’s wisest and humblest newsletter publishers.

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You’ll remember that some three weeks back we tipped you off regarding the market’s likeliest reaction to a Trump victory vs. a Hillary win.  We even drew a picture for you that the bigwigs in management decided to post on our website.

 

The chart looked like this –

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Now, there’s no need to repeat ourselves and comment a second time on the extreme genius at work here in the halls of the Normandy Mansion, Maryland’s chic-est corporate castle, situated in the heart of the east coast’s grandest neighborhood, a Gatsbean delight if there ever was one.

 

But you no doubt noticed that the left hand chart that we developed prior to the election bears a striking – some would say ‘eerily prophetic’ – resemblance to the chart below, a minute by minute ticker of the Dow Industrials just prior to- and post-election,

 

Here it is –

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It’s not seen here, but the index rallied an additional 400 points – for a total of better than 1400 points – after Trump was declared the victor.

 

Why?

 

Well, it seems the investing set knew all along that Doctor Trump had the financial medicine to get things healed.

 

And not only them.  Look at the cash flows that both preceded and followed the election.  Talk about tidal waves!

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This was no joke.  Daily inflows of this variety don’t just happen.  They’re spurred by extraneous catalysts – like elections, scandals, volcanic eruptions, planetary collisions – and not by the normal course business of the markets.

 

In other words, this was clearly an outlier event.

 

And don’t think the banks and brokerages don’t love this, or that they didn’t have a hand in it.  As we wrote just a week ago regarding the final stages of a bull market – “nothing is over until Goldman Sachs has had its run.”

 

And how, indeed, did Goldman Sachs, the world’s largest and most influential financial juggernaut, respond to the news of a Trump victory?

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These people – and all those who invest in them – know better than anyone on the planet that they’re about to start raking in the cash hand over fist.

 

Like a wild pack of Clinton Cronies let loose in the mint!

 

Goldman Sachs and the rest of the financials will lead the pack as it storms to all-time highs and the market fulfills the grandest and last hopes of anyone who ever cared to get rich from it.

 

But not just the bankers, friends.  It seems Main Street is catching on, too.  Have a look at the latest results from the weekly AAII Bullish Sentiment Survey –

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Interestingly, the bulk of these latest results were tabulated prior to the election, and yet they portray a public that’s enthralled to a degree we haven’t seen since 2010 – shortly after the bull market began.  That’s astounding.  It also points us in the direction of things to come.

 

What to Expect?

 

We should all expect Main Street to follow the traders at Goldman and elsewhere, and to ride the rocket like a syphilitic Argentinian dictator toward Dow 20,000 and beyond.

 

And you, who have followed us for the better part of a decade, and who know better than anyone out there just how glorious thI final phase will be, and how we, your ever-prescient redeemers – the biggest bunch of naked genius conch-shuckers you’ve yet to encounter in your brief and painful sojourn through this vale of tears – brought you both truth and riches through it all.

 

Remember that, and appreciate that you’re not one of the countless, bereft souls cursed to aimlessly walk the earth without our light and guidance.

 

Closing Trades and Rolling Others…

 

Before we offer you a trade for the week, just a minute to report on several open transactions that require your attention.

 

To begin, our March 1st trade (Silver Dollar Anyone?) put a board lot of UUP shares in our hands at a net cost of $25.99.  We subsequently (on 6/21) sold a PUT to reduce our cost further to 25.57.

 

And today, UUP shares are trading for $25.84.

 

Bottom line is we’ve had enough of this one, friends.  Even though the dollar may rise going forward, it could just as easily take a breather, and we’ve recovered our money.  It’s time to bail.  A $0.27 gain on an initial credit of a penny gives us 80% after accounting for minimal commissions.

 

It’s fine.

 

Next Up!

 

Our next trade was launched on August 9th in a missive titled Golden Roadblock Dead Ahead, wherein we argued for an immediate dive in the precious metals.

 

And we got it.

 

But we played the trade poorly, so we have to roll it forward to save our bacon.

 

We sold the GDX November 27 PUT for $1.17 and it now trades for $5.78.  Buy it back and sell ten (10) GDX January 25 CALLs for $0.56 each.

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Next on the list was our IYT trade of the 8th of September.  In Transport Hi-Jinx!, we urged you to buy the IYT December 144 CALL for $6.20 and sell the IYT December 144 PUT for $5.50.  Total debit on the trade was $0.70.

 

Today the CALLs go for $11.60 and the PUTs for $1.30.  Sell the former and buy back the latter and you net 1371% in just 60 days!

 

Beats a metal spike to the temple.

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Finally, our trade of just a week ago, from Facebook DeFANGed, in which we recommended you sell five (5) FB November 25th 129 CALLs for $0.30 each and buy the FB November 25th 117 PUT for $1.51.  Total debit on the affair was $0.01.

 

The PUTs are now worth $3.40 each while the CALLs can be left to rot.  With just ten days before expiry, they shouldn’t cause any problems.  Sell the PUT today.  We’ll get back to you with a final tally in two weeks’ time.

 

As for today, we’re going back to the Goldman Sachs chart we showed you above and betting that GS will take a breather in the next ten days.  That oversold RSI read screams sell.

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She went too far, too fast.

 

With kind regards,

 

Hugh L. O’Haynew

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