Member Trading Video

 

And here are my notes to accompany it:

  • My newest, high-probability pair trade I will enter soon will be Long UNG and Short LNG.
  • Similar to my calls to Long JO, SGG and Short SBUX; Long oversold Retailers in XRT (M COST TGT WMT KORS DDS) and Short AMZN; OR Long CAR HTZ GM F FCAU past two weeks and Short TSLA. All of these are still working but will likely undergo digestion/tests on different timeframes.
  • Still see GLD GDX GDXJ SLV SIL higher until there is reason to reverse. In fact, a bunch of individual miners look poised to run higher: ABX post EPS, RGLD already broke out, WPM, IAG, NEM.
  • Still Long TIP and TLT which is funny because one is an inflation ‘hedge’ and one isn’t but both are sill moving higher with Gold and Yen as TNX pulls back with USD/JPY.
  • Still see XLF as Short, expecting rates to come down. Has not executed yet.
  • QQQ outflow is a Tell as to potential market weekend, plus my Put/Call Ratio Short Indicator just fired short the market.
  • Still see NVDA SMH et al Short, with Aug put spreads, expecting semis to weaken.
  • Still see XLK and with it the MSFT AAPL AMZN etc stocks to weaken in August with much more danger for September.
  • Cautious on oil: this week will be the Tell! Higher and SPX can run another 200 pts. Down and we can drop the same amount. I am looking to Short WTIC, USO, XLE, OIH at first signs of reversal.
  • HYG is collateral damage to oil.
  • IBB XBI is weak sauce so careful selection of stocks within this sector is everything. As mentioned last week: CLVS VRX GILD CELG GWPH are a few that were working but is not smooth.
  • VIX VXX getting lost of attention. I still like the Oct call spread financed by puts or ratio backspread 2:1 or shorting SVXY by selling calls in Oct.
  • AAPL and TSLA the big EPS announcements this week: expecting disappointments in both. Suggested piggy-back play short in TSLA with ratio backspread (see a theme of late?). Anyway, buying 1 $355P, selling 2 $310P, all in Aug. If it stays above $310 by expiry, this makes ~500%. Keep in mind my PT is $260 in time so this would need to be closed/rolled if successful.
  • AMZN weak sauce; FB still strong and TWTR just wrong.
  • NFLX shorts have covered so what will keep them up there now?
  • QQQ shorts have covered here too and there is large ETF outflows last few weeks so what will keep them up now?
  • IWM looks ripe for lower and with big gaps down I expect this to collapse in the same way it rose, violently. in the coming month.
  • IYT at 161.8 on weekly pulled back aggressively last week, taking rails and airlines and package carriers with it. Looking for stabilization but not seeing any yet.
  • EWG on a cliff, where a fall can be sudden and severe. Likely follows Euro currency (FXE) lower once USD (UUP) reverses/bounces on support.
  • EWC with the USDCAD down so much, will likely bounce once USD bounces. Also a Tell: oil should have been up much more so the divergence is bearish oil.
  • USD bottom fishing price target is fast approaching: ~$92.50 (or ~$24 on UUP) at which point the other currencies should pullback: FXE FXC FXI. See section on Economic Reports of Gone Fishing Newsletter to see all the potential currency-moving news this week.
  • USDJPY looks short term lower (109 to 106) but once this reaches bottom of wedge price target, it could reverse much much higher in the Fall, pulling rates and the indices with it while decimating USD and Gold. But that’s a few months off.
  • XAD looks lower after running 10% higher and pulling the reflation trades with it. The reverse is also true: X SLX XME FCX. More chop as it drops.
  • Member Spotlight: Henry hunted solid fundamental plays last quarter: OLED, BZUN, DVAX. Steve nailed Telecom last month: Value managers love yield plays T and VZ and both of their EPS reports rocked.
  • Trends that haven’t ended: KWEB still hot like TAN although should start to consolidate. Still have that look for more: VEEV, AAOI, WDAY
  • Room Fun: sell off in PM and MO on FDA news was total ‘buy the lows’ call on Friday. So was BIDU above $108 for chase turned swing.
  • Anatomy of a Trade: DIS worked GREAT; KMB not yet but no harm no foul and TWTR might still get bought out 😉

 

Two most important charts to watch: the US Dollar and the Yen:

The falling dollar of late has been good for U.S. technology stocks which derive 57% of their revenues from foreign markets. A falling dollar also boosts commodity prices which usually leads to higher inflation. A falling dollar also tends to drive global funds into foreign markets which would explain the DM and EM market and currency strength this year. What if the dollar stops falling and reverses?

Big Concern: Abe has lost his ‘touch’ if the Yen keeps rising. Above $78.70 in FXY means market doesn’t trust BOJ.

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