The World is Falling Apart! (XHB)

Stand aside! Gang way! Look out below! Timberrrrr!   The decibel level toward the end of last week got so shrill that we had to throw on the headphones and cool out to some chug-a-luggin’ Johnny Cash tunes just to get some perspective.   Heaven help us – you’d think the very planet was living out its last days!     But as Johnny says, I keep my eyes wide open all the time…   In fact, while all the major averages and a few headline stocks were putting straws to the gravy, a few select sectors were actually performing well. And not just the usual suspects, like the utilities. This, for illustration sake, is the Dow Jones Utility Average for the last six months, matched against the Industrials (DJIA) for the same period.     The utilities, of course, are the investment refuge of widows and orphans – a good, safe place to park funds and collect income regardless of the market weather. Or, at least, that’s the role they’ve played historically.   But in a world of increasing fanaticism and natural disasters, where power plants and pipelines and refineries have become ‘military’ targets, and explosions and meltdowns kill and maim thousands and pollute…

Read More

Wall Street Love; Main Street Violence (VIX)

We’ve spoken with increasing regularity in this space about what we feel is the inevitable breakdown of civil society in America. What we haven’t been so clear on is a timetable – when it will begin, and thereafter, what particular action will be needed once the difficulties present. Because of the nature of our readership and the business that we’re in, it’s likely that the vast majority of you are insulated to some degree from the conflicts that have afflicted the citizens of St. Louis suburb, Ferguson, Baltimore, Chicago, and most recently, New York. The tensions that have manifested in these locales are not isolated occurrences, are not limited to these particular hotspots, and are not over. Ferguson, Baltimore, et al. will continue to see conflict, as will other cities north and south, on both coasts and through the middle for a great number of reasons that we haven’t the space to enumerate today. Suffice to say that an array of forces economic, social, moral and spiritual have brought us to this point, and our engagement as a nation with the outside world has also played a role in the outcome. All that notwithstanding, we’ve repeatedly encouraged you to make…

Read More

Looking for a Threepeat (GLD, BIDU, SLV, GS, VIX)

A couple of dandy trades to report on today, so let’s not waste any time. Put on your sneakers and get rolling! We lead off with an effort launched on the 23rd of September, in a letter called Silver and Gold(man). We were trading two completely divergent sectors with this one – precious metals and financials. Our thinking was as follows – “… we’re pairing the two not because there’s some sort of inter-market relationship that obtains between their respective sectors, but because one looks toppy and in need of a trim, while the other appears to have bottomed.” No magic there. A straightforward overbought/oversold pairing with the iShares Silver Trust (NYSE:SLV) and Goldman Sachs (NYSE:GS) as the objects of our lust. The long SLV CALLs were closed for $0.25 on October 21st in a letter called Disaster Strikes the Hunter, but the Goldman CALLs we left alone. We felt they’d expire worthless as they still had quite an ascent ahead of them before they came into the money. And so it was. As of last Friday’s options expiry, our short Goldman 197.50s expired worthless, and we come home with the $0.25 we garnered from the SLV CALLs and another…

Read More

Market Meltdown? Maybe. Gold? – Probable. (GLD, MBI, VIX)

Ladies and gentlemen, back on the 27th of February we penned a piece on the notoriously volatile bond insurer MBIA Inc. (NYSE:MBI), in which we argued that the company would be THE place to park your cash for the immediate future. The article was called The Coming MBIA Bubble, and there we wrote –   [T]he price of ensuring corporate bonds is now at its lowest level since the Lehman crisis, and with it, MBIA’s business is exposed to less risk… And the same trend is evident in sovereign default risk profiles…. All of which is why we would tend toward aggressive bullish betting on MBIA’s prospects for both the near- and intermediate-term. And what happened? Within a week, shares of the stock had shot up 15%, CALL options were up by the hundreds of percent and we began backpedaling like Dirty Johnson at the 1964 Rodeo Clown Championships. That’s when we wrote The Fortunes of Two Space Age Rocket Stocks: TSLA and MBIA and suggested that you exit your long MBIA trade ASAP. Here’s the way the whole jumble appeared on the charts – The question for all you investment jocks out there, is how do we play MBIA now?…

Read More

Powered by WishList Member - Membership Software
GET YOUR FREE SPECIAL REPORT:
"THE SEVEN DEADLY SECRETS OF CHINA"

GET YOUR FREE SPECIAL REPORT:

"THE SEVEN DEADLY SECRETS OF CHINA"

Enter your e-mail address to claim your FREE Special Report “The Seven Deadly Secrets of China”

You have Successfully Subscribed!