OIL HIGHER (USO,XLV,XLU)

There’s a lot to say and a trade to close, so let’s get right to it.   In the first place, the country is angry.  And nothing makes Americans angry like the thought of some privileged elite that arrogates to itself the right to decide things for them.  The original British colony, you’ll recall, was ousted on its keyster and left to fester like a busted oyster.  And for what?  Arrogance.  Thinking they had a right to determine things from afar.   Well, it’s clear today that Washington is the new London, and the self-proclaimed kings of Capitol Hill are neither wanted nor welcome, if the latest presidential primaries have anything to say on the matter.   A New World Dawning   America is about to change in ways no one can imagine.  And a great deal of that change is going to be less than pleasant.  And it’s also going to affect the markets and your money.   But before we get there, we still have one final, stomach-churning rocket ride higher, and it’s going to be juiced by the following factors:   Short Covering – there’s a massive short interest out there, and it only seems to grow…

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What’s Tech Fish? (XLV,XLU,MCK,TSN)

How long will it finally take before every Tom, Dick and Janet decides to pile on the current market rise and send it Mach-4 headlong towards the sun?   How long, indeed?   We took the question to our panel of experts – the Normandy Bourbon Ballroom – and over a sip of the wildest turkey requested their best thinking.   The results will shortly be published in our annual letter to shareholders, Normandy’s widely followed Tuxedo, Caviar & Turnbuckle.   But here’s a sneak preview…   In short, our who’s who of brilliant strategists and well-heeled global savants used the following two charts to explain their thinking – The above chart depicts the NASDAQ for almost thirty years.  As you can see, the top in 2015 fell in line with that of the dot.com bubble in the year 2000, besting it, in fact, by only a small margin.   And for many in the technical analysis camp, that’s it.  What you’re looking at, in their view, is a multi-year double-top that seals the deal on the latest six year bull market.  Resistance at 5200, they say, is formidable (blue line), and we have nothing to look forward to but…

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TransFat Profits (MCD, XLU, GLD, FXI)

Wanted to make a quick update of two separate markets before we moved on to this week’s analysis and trade recommendations. We’ll start with the Chinese market. Stocks in Shanghai have moved into a bullish technical posture the likes of which we haven’t seen since the spring of 2008. It’s early going yet, so things could reverse in a jif, but we’ve a hunch that stocks in that bastion of commie central planning are about to lift off. And that’s certainly good news for us freedom-loving angels here in the good old U.S. of A. Here’s a chart of Chinese market proxy iShares China Large-Cap ETF (NYSE:FXI) for the last six-months. Pay close attention to the moving average configuration on the far right. The move from $32 to $42 over the last half year was in itself monumental, and the trend channel that defines the rise shows that price is currently sitting directly in the middle of that track – neither too hot nor too cold (in red, far right). Indeed, the latest RSI and MACD reads (in black) offer the same assessment, which is, that today we have no worries about an ‘overbought’ market situation in Shanghai. But where…

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Sitting Pretty on Three Open Trades (XLU, GLD, GMCR)

It’s always worth a second look when the leading sector of the market begins to turn over and yell ‘SPANK ME!’ And so it is now with the utilities, one of the market’s biggest gainers since New Year’s, which topped out at the beginning of May and has been edging lower ever since. Now, on the one hand, this is no surprise at all. In fact, it’s an inevitability. Every leading sector eventually gives way to a rival, turns lower and regroups before climbing again. The question that confronts us, though, is a little more subtle. And that is, whether the turn lower in the utilities is a mere matter of sector rotation, or whether it signals the start of a general retreat for equities of some unknown magnitude and duration. We leave it as an open question, because although we have our opinions, it’s important to note that that market leaders’ turning lower are also a potential harbinger of a bearish swerve. That said, have a look here at the Select Sector SPDR Utilities ETF (NYSE:XLU), for the last six months – The first item of note is just how much power the move has had. From New Year’s…

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A Gold Pen! My Kingdom for a Gold Pen (GLD, XLU, DIA)

Buckle up and hold on, ladies and gems, because the ride’s about to begin and we ain’t got no insurance. What we have instead is a whole mess of trades to review and a few new ideas to ponder, so get a pen while you’re at it. We begin the week with a quick word about fellow scribbler Matt McAbby, who last Thursday penned a piece on deep-in-the-money options that’s a MUST read for all who care about their investments. Here goes – On March 3rd we recommended a deep ITM CALL position on the indexes. The letter was called As the World wars, Wall Street Waxes

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Noah Would Have Bought CALLs (XLU, SPY)

We’ve got one trade to close before we get down to business this week. It was a winner, thank the Lord, not a grand slam homer, mind you, but a nice turn of profit. It was an initiative we booked back on February 24th, just prior to the broad market top-out and at the end of what we figured would also be a top for the Utility sector. The letter was called Downside betting on Freeport and the Utilities, and there we wrote as follows – [W]e see the longer term picture is bullish, despite any temporary stall that may be upon us. RSI and MACD are above their waterlines and all the weekly MAs are unfurled and trending higher. In sum, the utilities should continue to rise, but after their most recent burst, may be due for a short term pause. And, in short, we were wrong. The utilities, as represented by the Select Sector SPDR Utilities ETF (NYSE:XLU) did exactly the opposite of what we expected, continuing to rise through last week and setting new 52 week highs along the way at $43.52, before eventually losing power this past Friday and dumping by over two percent. The rise…

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