Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)

Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)   The local authorities in my city have just notified me that my newborn son’s name is  not acceptable to them, and that I’m going to have to change it.   If ever there were a case of government overreach, this is it.   They’ve informed me that in order to keep the moniker that I’ve longed to give him, I’ll have to go to the courthouse on my own time and at my own expense to have the child’s name officially registered before a judge.   If, of course, the judge agrees. In this day and I age, there’s no shortage of asininity in the world.  I can be a Satanist.  I can have a sex reassignment.  I can purchase and cohabit with a robot.  But I can’t call my kid what I want to call him?!   What the hell is going on!?   People call their kids all sorts of crazy, dimwitted names, like Sourberry or Gauzeleak, while my wife and I sit puzzled at what could possibly be so wrong with the sweet sound of ‘Dander’.   That’s right, Dander.   My wife’s great uncle from Denmark, who passed away nearly…

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Running Numbers (XLK,IYH,GS,FCX,FAS,C,TLT,HYG,AXP,V,RSX)

We’ve got so many trades come due, there’s little time for anything else!   Let’s get right to it.   First, we’ll take a look at a trade we launched over a year ago, on the 12th of November, 2015, in a letter called The Sachs of a McMorAno.   There, we urged you to dump the commodities and move hard and bullish on the financials, using two stock bigshots to play the trade, Freeport McMoRan (NYSE:FCX) and Goldman Sachs (NYSE:GS).   The trade recommended you purchase the January 2017 FCX 10 PUT for $3.00 and sell the GS January 2017 GS 150 PUT for $4.95.  Total credit on the trade was a fat $1.95.   And now?   Wow!   First of all, we closed out the FCX PUT on the 10th of December, 2015 for a dandy $4.12 and recommended you “leave your GS PUT to rot.”   And so it did.   On the third Friday of January, 2017, the GS PUT took the chloroform, expiring worthless, and giving us a very large $6.07 on absolutely no initial investment.  We’d like to thank the academy, the directorate, the foundation and the makers of Turtle Wax for all…

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Goose Feast! (RSX,SWHC,GDX)

Many will consider it a banal observation, but we believe it otherwise.   The phenomenon of new money – brand new money – entering the stock market after years on the sidelines, is of monumental significance and is going to accomplish several important things.   But before we outline them, take a look at exactly what we’re talking about.   Here’s an amalgam of two charts, the Dow Industrials and Transports, that includes volume figures for the last two years’ trade. The chart makes it clear that something extraordinary has taken place.  To wit, a buying spree that outright dwarfs the trade of the last 24 months – indeed, in terms of sustained day-over-day volume, we have not witnessed turnover this strong on the Dow since the bull market began in March of 2009, and on the Transports AT ANY TIME IN THE LAST TWO DECADES.   In short, this is nothing to be taken lightly.  It’s a phenomenon, plain and simple, and it signals unequivocally that we’ve entered a new phase – whatever that may be.   So what does it mean – what’s really going on?   Glad you asked.   First of all, this is not the…

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Go Suck on a Fish! (TYL,FXI,TSLA,QQQ,EPI,KSS,FAS,TD,IYF,RSX)

Oh, my! Is that any way to talk?   Life, as you know, is not a bowl of cherries. You can’t have your entertainment and your fine foods and your night on the town every day – no, sir. There are times when the drudgery of life takes precedence over its more inspiring moments, and suck as it may, there’s simply no getting around it.   We relate the foregoing because today’s letter is going to be a slight departure from the norm, composed as it is of a simple listing of former trades and their results or advice to close or otherwise repair them.   We apologize in advance for the tedium, and we’ll do our best to keep it lively. The truth is we had a great number of intestinal changes here at Normandy over the last three months and the recovery has taken us a tad longer than expected. That’s why this week we’re playing catch-up, and why we’ve had to curb some of the laugh-out-loud antics.   So bear with us.   Here we go…   Our first trade was opened on the 23rd of February. We urged you at the time to buy the deep-in-the-money…

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A Month’s Worth of Winnings – Repeat After Me! (TSLA,FXI,XHB,RSX)

An important thing to remember about stock movements, and one that’s been documented in abundant fashion by market technicians, is the propensity of both individual stocks and indexes to perform a ‘test’ of prior lows after falling.   That is, stocks fall to new lows every day, bounce, and more often than not, reverse course a second time to ‘test’ whether that former low was, indeed, a firm bottom.     Smokin’!   Of course, should the security in question pierce below its former low, it’s likely further declines are in store. Should support hold, however, the stock is almost assuredly headed back toward its last retracement high.   Have a look now at a chart of the S&P 500 for the last six months, and pay particular attention to the far right edge of the chart, where an apparent ‘W’ shaped bottom is being etched out –     This is the test we were talking about.   The index could fall another 30 points, or roughly two percent, and still be on the good side of the test, and it’s our view that that’s precisely what will occur.   The oversold RSI read in late August also supports…

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The Russian Bear – In Living Color (RSX)

We’re going to travel east and west in today’s letter to get a better feel for market direction in the coming weeks… and we do hope you’ll join us… Cleared for Take Off!   We start in the thick forests of the western Ukraine, where U.S. paratroopers have openly begun training with Ukrainian forces in their battle with Russian sponsored militias in the east of the country.   It’s a development that has been good for the journalists and analysts, to be sure, but it hasn’t made for good U.S./Russian relations, with the former commie scumbags angrily alleging that America’s preparing for outright combat against them.   America, of course, denies, but there’s little question that a proxy war between the two is fast becoming a reality. And with both countries engaging in grander, more realistic war games, and an increasing number of Russian aircraft and navy ships being intercepted in NATO territory, the situation grows less stable daily.   A look at the following graphic, already outdated by a couple of months, gives a relatively good picture of the regularity of Russia’s program to test NATO’s resolve in the air.     The question for us, of course, is how will it affect markets?…

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Profiting from Bond Droppings (TLT)

A number of ‘big names’ from the investment world sounded off last week about the bond market and the toll that rising rates would eventually take on equities. None other than Warren Buffett, zillionaire, stated outright that the long bond was a short sale. Bill Gross, once manager of the world’s largest bond fund at PIMCO and now at Janus, predicted that not only was the thirty-five year bull run in bonds coming to an end, but stocks, too, had seen their day. We’ve also been speaking of a bond bear for the better part of the last eighteen months and have been confounded (along with many others) as the long end of the curve refused to turn over. Calling an absolute top for Treasuries has not been a simple affair. But could it be the most recent, steep selling frenzy in the bond pits will prove the ‘giants’ correct? Because not only here at home, but in nearly every major industrialized nation the backup in both ten-year and long bonds has been formidable. Take a look here – We’ve highlighted the biggest moves with a red circle. The actual ten year rate is recorded in black. And as you…

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Trading Truth for Pravda (USO, RSX)

Had a friend in high school who delighted in conjuring up all sorts of labels for body parts that were as yet unnamed and announcing to the lunchroom in pseudo-scientific fashion his latest ‘findings’. He was a twisted fellow, to be sure, but we were mesmerized by his devotion to the discipline and equally titillated and amused with his diagrams and descriptions of just why things moved or smelled or appeared they way they did, the evolutionary function of each and, at times, in his more prophetic moments, the divine purpose and design behind that particular morsel of human flesh. Thus was born the ‘groove’, the ‘seam’, the ‘mandrake aureolis’ and the ‘braying aperture’. Chicken Skin   And you ask, what’s the purpose of such nonsense, O’Haynew? This is an investment newsletter, not National Lampoon. It’s supposed to be hard-nosed and direct. What are you up to? Faith, friends. There’s method to his madness. Janine! Immortalized!   We bring the above as a parable, to illustrate what many have already seen to be true, what others are just waking up to and what the vast mass will likely never apprehend. And that is, that we live increasingly in a world…

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Santa’s Good to the Elite (XOM)

We set a lot of trades here at Options Trader Elite. Roughly once a week – and sometimes more – we set a trade that’s the envy of the newsletter world, both in terms of its return and its sheer entertainment value. There, there, Rachel… take your Zoloft, my love. As it turns out, we very often set trades with December expiries. Not exactly sure why, but it just happens to work out that way. And so it was with last Friday’s options expiry, that we now have a bevy of initiatives that either closed down, or that we feel it’s now appropriate to take off the table. And so, without further delay, we ask Rudolf to run them down for you now. We start with a trade that was launched May 6th in a letter called Rising Rates Returning wherein we claimed the top was in for bonds, the whole market was about to turn lower and everyone should be out of fixed income product for a good long while. As it turns out, we were wrong. The top of the bond market is going to be a longer, more drawn out affair than we originally anticipated, and so…

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It’s All up to You – and the Trades You Make (RSX, XHB, SOCL)

Know it well, friends – no one can do you damage of any size or scope like you can do to yourself. That’s the first and last word on trading and on life. Looking for a reason why you’re broke or sad or lonely or angry or feel cheated or depressed or otherwise negative about something or someone? We say take a look in the mirror. Because 999 times out of a thousand… If not for your failure to act or your failure to refrain from acting, you wouldn’t be in the mess you’re now in. So why not 1000 times out of a 1000?   The reason we qualify the matter is because there is such a thing as evil in this world. And where it strikes, it makes victims of perfectly healthy, happy individuals. And we have to allow that in one case out of 1,000 the victimhood was unearned, uninvited, and indeed struck from out of the blue and was without apparent cause. [We purposefully use the term ‘apparent’ because to do otherwise would open a theological quandary that’s unthinkable. But more on that another time.] Take Responsibility   In the world or investments and trading, where…

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