Expect Some Wild Fluctuations
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Trade Actions:
None at this time. We are sitting through a strong correction on all fronts. Install stops on a few of our positions. We could be on the verge of some wild fluctuations up and down in all markets. It is going to be a difficult roller coaster ride to trade. I will keep looking for opportunities but I do not see any at this time. Actually I would like to lighten up on what we already have. So I you get stopped out, then so be it. The Fat Pitch needs to get back to what worked in the past and wait for the perfect set-ups.
Market Outlook/Potential Opportunities:
Stock Market
We need to wait for the next topping pattern to sell into.
PHO (water) is technically looking real good. We bought it at the market. What is more valuable than Gold, Oil, Food? We already have those bases covered. Let's go after water.
Is a Sell in May and then Walk Away in the making? It sure appears that way. We have two slots open to put those Short Funds back on, but we are going to wait for a short term countertrend rally back up this week and maybe by the end of the week we will do just that. I am looking at SH (Short SP) and PSQ (Short Nasq). More on this latter.
Energy ETFs (Click here for an Energy ETF List)
Long term Oil is setting up a very bullish case. Maintain USL as a core holding thru thick or thin. With Middle East violence heating up and the monthly chart on Oil looking good, we have to stay with it. Also we must maintain some position on the inflation front so we have to stay with it. Oil is overextended but looking like it is going much higher. Speculation is not driving Oil higher. The collapse of the Dollar is.
With the fear of Nuclear Energy, it is possible that we could now have a renewed interest in Solar Energy so we Bought Market Vectors KWT (Solar Fund) at the Market.
I still feel long term oil is a good place to be, but shakeouts of weak hands are always needed in Bull markets. I guess the Europe central bank is now understanding that their interest rate tightening was actually causing commodities to rise.
Metal ETFs (Click here for a Metal ETF List)
We are now long both the Silver and Palladium market. We just go with the flow here. Inflation is really heating up.
Update: All metals are going much higher. Stay the course.
Buy GLD ( Gold) on corrections.
Well I said buy GLD on stiff corrections. Was that stiff enough. Sure is getting
close. Maybe just a little stiffer though. Plus we are already long two metals
here so I am not really interested in chasing a third unless I get it at a
comfortable price.
Bond ETFs
We are now Long TBT as we expect higher interest rates unfolding. This is going to be a tough trade to sit through. The one thing we have going for us is a heavy overhead supply that could contain any rally in bonds. Bonds will be in a stalemate for a couple of months with a downward move coming in the end of May. Bonds are now bumping into the monthly resistance. It was a nice rally in the Bonds but reality will soon sink in. Still it will take a few months to roll over.
Who in his right mind would buy bonds in the face of Inflation and a Falling Dollar? Stay with this one. I still feel that bonds are on the verge of trouble.
This market is going higher than I would expect but I am staying with it.
Currency ETFs
The theme for 2011 will be the rising value of the Chinese Yuan. We bought the Market Vectors Chinese Renminbi ( Yuan ) Exchange Traded Note that should rise in value with the Yuan. I strongly believe the Yuan will be the place to be this year as the Chinese will need to export their inflation over to the US. I still believe this to be the best trade on the board. The US dollar is failing badly. The Euro with their share of problems will soon follow. Look for the world to turn to something else. Metals and the Yuan
Commodity ETFs
Buy DBA ( Agriculture Commodities ) at the Market. We are expecting a big push to the upside in Soybeans. We are now long DBA. I have to believe Corn and Soybeans are going higher
Current Long ETF Portfolio
Bought PHO ( Water ) at 20.3
It closed at 19.6
Put in a Sell stop at 19.2
Bought SLV ( Silver ) at 42.2
It closed at 34.4
Bought PALL ( Palladium ) at 73.8
It closed at 70.5
Bought DBA ( Agriculture Commodities ) at 34
It closed at 32.1
Put in a Sell stop at 31.7
Bought Market Vectors KWT ( Solar Fund ) at 12.78
It closed at 11.7
Bought USL ( Long Oil ) at 43.78
It closed at 45.1
Bought TBT ( Short Bond Fund ) at 39.2
It closed at 34.4
Bought CNY (Chinese Yuan) Market Vectors Exchange Traded Note
Bought at the Market 40.37
It closed at 40.23
Current Short Portfolio
None
Recently Closed Positions
Bought EUM ( Short MSCI Emerging Market Index ) at 32.1
Sold on a Sell Stop at 28.5
Bought PSQ ( Short Nasq ) at 33.5
Sold on a Sell Stop at 32
Bought SH ( Short SP ) at 42.2
Sold on a Sell Stop at 40.49
Thank You
If you want to contact me send me an e-mail bill@stockbarometer.com
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Author: Bill West
Bill West
Fat Pitch ETF Advisory
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