Change Of Direction
7/3/2011 4:46:12 PM
Hello Everybody
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Trade Actions:
Buy COW (Livestock) ETF at 29.85 or Better
Put in a Limit Order to Buy QQQ (Nasq 100) at 57 or Better
Market Outlook/Potential Opportunities:
Unbold is last week's commentary. Bold is this week's commentary.
Stock Market?
We need to wait for the next topping pattern to sell into. Or the next bottom pattern to buy. We are just stuck in the middle here.
Well I was right that the Stock Market was no place to be right now. Unfortunately I did not capitalize on any Short Funds. After getting dinged a couple of times on early calls for Short Funds I decided to hold back and wait for a better rally to sell into. The one we had two weeks ago just was not enough for me to stick my head out again. Is a bottom now here? I would not be so quick. The SP at 1263 could easily slid another 100 points so I do not want to be a hero here. Nor do I want to get short after a big market slide. Sit back and enjoy a couple of weeks of summer knowing that you really only have one Stock ETF and that is the Solar Fund. Let us see if any 1-2-3 countertrend rally can move up so we can get short.
The rally phase of this market appears to of started. We are going to try and get on board here as I am looking for a two or three leg up move heading through September. This could though be the final hurrah for this Bull Market that starter in March 09. So we have to be nimble here.
Put in a Limit Order to Buy QQQ (Nasq 100) at 57 or Better
Energy?
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 was expecting Solar to trace out a pattern similar to oil, but the Solar is taking it on the chin along with the stock market. With the Stock Market nearing a bottom, let's try to stay with it a little longer.
I still feel long term oil is a good place to be, but shakeouts of weak hands are always needed in Bull markets.
Crude could be in for one more leg of downside action here but after that is complete I see nothing but upward action. Need to hang in there because you can never tell were the exact bottom might be.
Metals???
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.
The correction in metals appears to be over but I do not expect big moves at this time. Look for all the metals to grind higher.
Key Reversal Week in all of the metals are going to put more downside pressure on them. Be careful of going short to take advantage of it. Those who are not long metals should be averaging long into this leg of the break down. If you wait for exact bottoms you might miss it.
Palladium is bucking the downward trend. Looking bullish here.
Bonds?
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. It has me scratching my head but I believe it is about to turn. Remember I said the end of May it should turn. Alright possibly June.
The end of QE2 has ushered in the end of the Bull Market in Bonds. Stay with TBT as interest should now start moving higher.
Currencies?
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.
Still at this time we are putting in a stop.
Commodities?
Grain prices are going lower but I would not be surprised to see them shoot back up after July Options are over.
The Livestock market is looking bullish here. We are putting in a Limit order to buy COW at 29.85 or better.
| Current Long Portfolio | |
| Bought SLV (Silver) at 42.2 | It closed at 33 |
| Bought PALL (Palladium) at 73.8 | It closed at 75 |
| Bought Market Vectors KWT (Solar Fund) at 12.78 | It closed at 10.7 |
| Bought USL (Long Oil) at 43.78 | It closed at 43.5 |
| Bought TBT (Short Bond Fund) at 39.2 | It closed at 34.6 |
| Bought CNY (Chinese Yuan) Market Vectors Exchange Traded Note | |
| Bought at the Market 40.37 | It closed at 40.27 |
| Put in a Sell Stop at 39.75 | |
Current Short Portfolio:
None
Recently Closed Positions
None
Thank You
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Author: Bill West
Bill West
Fat Pitch ETF Advisory
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