Today's Game Plan

Two days ago I outlined my short term strategy of getting long, and yesterday I covered all my shorts early into the dip. I picked up Decker's Outdoor (DECK), Spyder S&P 500 ETF (SPY), Russel 2000 ETF (IWM), Apple (AAPL), and, believe it or not, a nat. resources company Cliff's Natural Resources (CLF). I also started a position in the Powershares DB US Dollar Index Bullish ETF (UUP) as a play on the strengthening US Dollar. This is one of my favorite Q4 themes. Tomorrow I'll be looking to add to my Euro shorts via the (EUO) since I think this rally continues on more "good" news out of Europe which should bring up the struggling currency. With the exception of my FOREX moves, all my other trades are very short term. I'll look to start selling all my other trades in 5% or so except for Apple (AAPL), because it's P/E is too low, Netflix (NFLX), because it's oversold and a prime takeover target, and Alexion Pharma (ALXN) because approval of it's drug could come as early as Q4. I wouldn't buy any commodities here except copper for a quick bounce.

-Good Luck, let's make some money.

This is not a recommendation to buy or sell any securities. DAK was long DECK, SPY, IWM, AAPL, CLF, ALXN, and NFLX at time of publication but positions can change at anytime.

I'm calling a short term bottom...so sue me

Well bears, here's your chance to make me look foolish. On a day when we breached the lows of the year, something I warned would spark a huge amount of selling, I'm calling a bottom. Well a short term bottom at least. I tweeted earlier that I just didn't feel all that bearish here even though we breached some key support levels. If we open up down tomorrow watch the 1090 level cause that's where I think we turnaround, and that's where I'll be buying. I'm not sure who'll lead the way, but I'm guessing it will be tech since Apple (AAPL) is in play tomorrow. Once I see who's leading the way I'll be looking for some longs and for a 6%-8% bounce in the major indices over the next week or so. But I would use this rally to unload any big losers, and take profits on winners, because I see nothing good on the horizon concerning Europe or China which is what's driving the action. Even if the Greek default is "manageable" and China has a soft landing, it will take some work to get there (and by work I mean lower equity prices). When this market starts to become overbought, and the VIX creeps below 30, I intend to be long only a few issues like Apple (AAPL) and Alexion Pharma (ALXN). I think Netflix (NFLX) is oversold and just begging to be bought by Amazon (AMZN) or Apple (AAPL) so I'll hold on to it. I'll be long the dollar index and short the Euro. I'll also be covering my gold and silver shorts on any weakness in the coming week and will look to start to getting long the precious metals in euro terms. That's a bit of a complicated trade but I think you'll see much greater upside in the price of gold and silver in euro terms vs. dollar terms.

This is not a recommendation to buy or sell any securities. DAK was long AAPL, NFLX, and AMZN at time of publication but positions can change at anytime.

I'm still not buying it...

I seem to be a very torn individual these days. Many of the things I predicted would happen have begun to come true. The market is up 150+ points as Germany passed the TARP-like measure seen as necessary to save the Euro Zone, and jobless claims and GDP came in better than expected so it seems the economy isn't quite as bad as we all thought. All seems rosy right?? Wrong. There are some ominous signs out there that have me raising cash and only picking at a few select names on weakness. We'll start with copper, probably the best indicator of economic growth out there, has fallen like a stone. China, the gasoline keeping this global economy running, is drastically reducing how much copper it's consuming. Then a poll taken by Bloomberg showed 59% of respondents believe China will fall to sub-5% GDP growth by 2016. A "hard landing" of less than 5 percent growth for the world's most populous nation would be "disastrous" for the world economy, said Qu Hongbin, an economist with HSBC in Hong Kong. The nation wouldn't be able to create enough jobs for those entering the workforce, sparking a "serious social problem," he said. "I'd rather bet that it's the end of the world in five years than to bet on China's growth falling below 5%." This puts into perspective just how dire this situation is. If China goes, we all go. Your iPhone goes from costing $250 to $1000. Not good. Hopefully China would have the foresight to change their model to accommodate the lower growth by shifting to a strategy of household spending- led expansion, softening what global investors anticipate will be a hard landing. We should stay away from BRIC stocks such as Baidu (BIDU), New Oriental Education and Tech (EDU) and Arcos Dorados Holding (ARCO) until we get a clearer picture of what's going on in the land of Mao. Another ominous sign is which stocks are actually leading this market. I truly believe as goes Apple (AAPL), goes the market, and recently Apple's (AAPL) RS line has been falling. I talk about Apple (AAPL) a lot as the leader of this market but it's not just Apple (AAPL). All the mo-mo names like Green Mountain Coffee Roasters (GMCR), Decker's Outdoor (DECK) and Wynn Resorts (WYNN) need to lead the way. Right now that just isn't happening. Almost every stock I watch is down today in an up 160 market. Gold and silver are up a bit here but I won't be adding to my shorts today unless we go dramatically higher. The precious metals have fallen so much you'd think there would be a little consolidation before we move another leg down. The only move I'm contemplating right now is adding to my euro shorts. The euro is up about a penny today versus the dollar off the Germany vote, but I see many bumps in the road ahead for Europe. My year-end price target for the euro is $1.28.

This is not a recommendation to buy or sell any securities. DAK was long AAPL and ARCO at time of publication but positions can change at anytime.

Stocks & Commodities Fall as German Parliamentary Vote Takes Front Stage

These late day fades are killing the bulls. You wonder how much longer they can take it before they just throw in the towel. We were dancing between gains and losses all day, opening up 100 points only to give it all back and then some by 3PM. Then, as usual, the fast selling started and took us another 100 points lower in the last 15 minutes of trading. I'll reiterate my view that you shouldn't be buying anything in this market except Apple (AAPL) and Alexion Pharma (ALXN). Overnight or early tomorrow morning there is a vote in the German Parliament to decide on Greece's bailout package. If it fails, you can bet we'll be taken down hard. Remember, when TARP was first introduced to Congress it was shot down, then the market plummeted and forced Congress' hand. TARP was finally passed, eventually saving us from a total collapse. You have to think, over in Europe they have a bunch of lefties in office who are anti-capitalist to begin with. You think they want to bailout the "fat-cat" bourgeoisie bankers that got them into this mess in the first place? Talk about moral hazard. They hate the bankers over there more than we do. Then, even it passes, it has to be the right plan. How did we react when the Fed didn't give us the stimulus we wanted last week? Down 700 in the blink of an eye. Gold and silver resumed their drop Wednesday but expect and bounce back up to the $1700 level if the vote fails. I'll be adding to my Proshares Ultrashort Silver ETF (ZLV) and Proshares Ultrashort Gold ETF (GLL) positions if we do bounce on a failed German vote, but if it passes, look out below.

This is not a recommendation to buy or sell any securities. DAK was long AAPL, GLL, ZLV, and ALXN at time of publication but positions can change at anytime.

Europe still driving the car...

We've rallied off the lows of the year, again, on the idea of a German TARP-like plan that will save Greece from a classic default, and bring the entire Euro Zone back from disaster. If we had some sort of solution over there it would be huge positive for this market, but what about Operation Twist? Didn't we get a little more stimulus than we expected from the Fed? What happened after that? Down 700 points in two days. Maybe it doesn't happen this time, but until this market breaks out of the 1120-1220 range it's been trading in, I'm a very selective buyer. This may be your last chance to get in on the Apple (AAPL) train before the next big leg up. Amazon (AMZN) is debuting it's iPad competitor dubbed the "Kindle Fire" or some nonsense like that. I think the Kindle Fire is DOA like all the other "serious competitors" that have come and gone (I'm looking at you Xoom, Galaxy, and Playbook!), and if it brings Apple (AAPL) down today and/or tomorrow, I'll be adding to my position. I actually like Amazon (AMZN) a lot, but this tablet is NOT an iPad competitor. It may take share from the Nook. Gold is basically unchanged and silver is down a percent. I bought back some Proshares Ultrashort Gold ETF (GGL) a little cheaper than I sold it on Monday for, and I started a position in the Proshares Ultrashort Silver ETF (ZSL). I think both precious metals have 10%-15% downside form here. Yesterday's rally fading hard into the close is disconcerting, but right now it looks like today may be a non-event. With all the different investment vehicles I watch, I'm stressed to find one that's even moving by a percent either way. Europe is basically unchanged right now down about 30 points on the DAX.

This is not a recommendation to buy or sell any securities. DAK was long AAPL, GLL, and ZSL at time of publication but positions can change at anytime.

Cautiously Optimistic

It's amazing how quickly things go from the "end-of-the-world" to "Paradise Island" nowadays. This is one broad rally with all but 2 of the stocks I watch rising over 1%. Volume is pretty normal out of the gate, but will see how the day unfolds. As much as I'd love to jump into the names that are rebounding like Baidu (BIDU), Arcos Dorados (ARCO), and Wynn Resorts (WYNN), I think it's best to continue to be cautious here. We've been following the pattern of pricing in a "smooth" default in Greece before it actually happens, and then at any sign we were wrong we sell of, and we sell off violently, hence my caution. The lows of the year held again, the best contrarian investor out their, Doug Kass, has called a bottom, and investor sentiment is almost as bearish as the 09' bottom. These are all very positive signs, but any bad news out of Europe will take precedent over anything else. I'm still buying Apple (AAPL) and Alexion Pharma (ALXN) as I continue to believe these companies will buck any macro trends. In fact, I'd like to talk about the report form JPMorgan yesterday citing parts suppliers, that Apple (AAPL) cut iPad orders for Q4 by 25%. My sources are confirming something I suspected the minute the report dropped and mentioned twice twice yesterday. Not only is Apple diversifying it's supply chain in Asia, it is moving an unknown amount of production to Brazil. How much you want to bet that "unknown" amount is 25% ;) Even if we do continue this rally, we should take a breather the next couple days because we've come up so quickly. I'd lighten up on your aggressive longs and add to any solid shorts as I think tomorrow we could see a pullback. If you have any shorts not working out, like the Fossil (FOSL) puts I bought before the big rally yesterday, than don't sell them for a loss, wait for tomorrow to unload. If you don't have a short position in gold or silver, I like starting one right here. Both precious metals are rising hard today and I think they have a good 10%-15% downside form here. Put on half what you'd like to short today and wait to see what happens. We could see $1700 before $1500, but I expect $1700 to act as resistance if we do get there. The Euro is also rising today and I'll probably add to my shorts via the Proshares Ultrashort Euro ETF (EUO) by day end. Regardless of how the European debt crisis unfolds, I belive the Euro comes out the other end much cheaper than today. I'll be using days like this to add to my position and look to start covering around $1.28-$1.30. Don't forget you can always check the twitter feed to see my trades live.

This is not a recommendation to buy or sell any securities. DAK was long AAPL, ARCO, BIDU, ALXN and EUO, and short FOSL at time of publication but positions can change at anytime.

Gold Rebounding; Futures Higher

Gold is finally rebounding a bit here, up $50 to $1645, after the worst bout of selling in the precious metal since 2008. Silver is bouncing back even harder up over 4% to $31.30. I covered my shorts early yesterday precisely in anticipation of support around $1600. I would be more inclined to short this bounce than buy the decline, but the easy money's already been made. I expect to see $1500 before $1800, but it won't be straight down. If you read my blog you know I'm bullish on gold long-term. That's why I own the Spyder Gold Trust ETF (GLD) for the Free Market Capitalist Portfolio. Trends always tend to go a little further than most expect so we may see lower than $1500, but that's where I'll start buying for the FMC Portfolio, and myself. I'll be buying silver more aggressively than gold as I think silver easily doubles here over the next year, gold may see a respectable but more modest 20-30% rise. Futures are slightly higher in Asia and with a "fix" on the way in the Euro zone, we may see some more upside in equities these next few days.

Hike my margin, will ya?

Wow. Forget gold! Silver is really the story out of Shanghai last night. When I went to bed silver was flat after having recovered slightly earlier in the evening around 8-9PM. Look at what happened after I went to bed. This chart for silver shows at 2AM, silver was down almost 15%!!!! We're only down about 4.5% right now. These last few days show us how fast the precious metals fall when people start selling.

Good Morning

Precious metals are falling again this morning after the CME's counterpart in China, the Shanghai Gold Exchange, followed CME's move on Friday and raised margin requirements on both gold and silver. Silver is the big loser plummeting more than over $1.40 after margin requirements are raised more than 20% from 15% to 18%. Equity futures are rising off a statement out of Europe promising more "stimulus". JP Morgan released what must be the first negative report on Apple (AAPL) in years, claiming their sources indicate a drop in 4Q iPad orders. These claims have not been substantiated but they very well could be true. Somehow I'm not worried.

This is not a recommendation to buy or sell any securities. DAK was long AAPL at time of publication but positions can change at anytime.

Precious Metals: Bubble Or Bull Market?

It's one of the hottest investments out there, and if you've read my blog you've seen me take both sides of the trade so I'd like to give you my short-term and long-term views for both gold and silver. Gold has been the hot investment the last decade, outperforming all major indices and most stocks. It's up over 600% from it's lows back in 2001. While this rise is dramatic, it's also completely justified. Central banks around the world have been printing money like mad the last 10 years, devaluing FIAT currencies and causing inflation. While the investor class has bid the price of gold up a few hundred bucks more than fair value, it isn't the main driver behind its rise. It's actually an illusion that gold prices have risen. In reality paper money has become less valuable. So I'll tell you right now that gold will never be below a $1,000 per ounce again. As we continue to print money and devalue currencies around the world, I can only see gold going higher. In fact, if you adjust for inflation gold is way of it's all-time high from back in the 70's. Short-term gold has gotten ahead of itself, and right now I'm short gold via the Proshares Ultrashort Gold ETF (GLL) and will be until around the $1,500 level. It could pull back further, but $1,500 is its 200 Day MA, so it should find some support there. Silver is a different story. I'm just as bullish on silver as I am on gold only more so. It has lagged gold this last decade and the same logic should apply. Printing More Money=Higher Precious Metal Prices. I think in the medium term silver has further to run than gold as it plays "catch up". It should pull back with gold over the next few months so in the short-term I'm staying away from both, but feel free to buy on the way down as the next decade could see bigger gains than the last.