Is the Chinese Currency finally going to strengthen?
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Buy EUO ( Proshares Ultra-Short Euro Currency ) at the Market
Sell SH ( Short SP ) at 40.2 or Better
Market Outlook/Potential Opportunities:
Unbold is last week’s commentary. Bold is this week’s commentary.
Stock Market ?
This is going to be a tough market to buy into. Prices are being snuck up preventing new positions to be carefully bought. Also I am not sure that we should be buying into this market. We are already comfortably long.
No need to chase here. Plus there is a very good possibility of a stiff correction in the beginning of
2011. So we are pretty much going to stay where we are at. I am not sure that I want to take the risk. One thought process you should have when making a trade is to always ask yourself, “What is my risk”. Stay the course with the last two stock positions. Tighten up the stops again. Sure is nice when you can easily walk up stops.
I believe we are finally getting close to a top here. I am still looking for more signs and believe we should be trying to accumulate short funds here, but we need to do it at our price and not chase anything. SH ( Short SP ) is selling at
43.3 Let us put in a low ball offer to buy it at 40.2
Maintain bullishness on the Oil market, but there is one cautionary take if you are first entering this market. After doing a little research, this is what I have found. USO is 100 percent invested in “front month” oil futures and must therefore roll over 100 percent of its assets each and every month. With oil markets currently in contango (i.e. prices are higher as you go out in time), USO loses money every time it rolls the portfolio. Unfortunately, no other exchange-traded products can accurately track crude oil prices, either.
One alternative to consider is the United States 12-Month Oil Fund (USL). This fund keeps one-twelfth of its portfolio in each of the next twelve months of crude oil futures. USL is still affected by the negative roll yield, but only 8.3 percent
of the portfolio gets hit each month, not 100 percent as in USO.
Well we got stopped out of USO. I am not happy about it, but we broke even. We will look to re-enter the
Oil market after a correction. Next time we are going to play oil a different way. ( See the research above.)
Well we are now out of our position an PALL. We made a very nice profit. At this time I feel that the Metals are going to take a rest. Maybe even a 3 month correction phase.
Boy was I wrong on this one. We should of never left the Metals. On Thursday I scrambled to get on board a futures contract in Palladium but I am not sure what to recommend with the ETF. It sure does appear that the metals
might have entered an acceleration phase up. It kind of caught a number of people of guard, who even though they are bullish like me, were still thinking a pullback might be in order. It is just hard for me to recommend taking the risk.
Good thing we did not take the risk. The metals have entered a correction phase like I originally projected. This time it should trace out a Elliot Wave 5-count. At that time we will be looking to buy for the big move coming.
We are now out of our Short Bond Fund ( TBT ). It took awhile for a profit, but we got it. There should be a possible counter trend rally happening soon. Isn’t it funny. Just when everybody gets bearish bonds, the bond market stages a rally. Still it is a minor wave rally and I will be looking for a better set-up to re-enter into a Short-Bond Fund. Just not now.
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 guess Asian Currencies is the place to be. The Japanese Yen passed a critical test this week and appears that it will continue its upward climb.
So we bought YCL at 32.7 ( Proshares Ultra Japanese Yen ETF )
The Euro Currency seems to be in trouble and is a good hedge against our long Yen position.
Therefore Buy EUO ( Proshares Ultra-Short Euro Currency ) at the Market.
We Bought Powershares DYY ( Leveraged Commodity Note) at 9.7 on a Limit Order
We Bought LSC ( Commodity Index Tracking Exchange Traded Note ) at 8.5 on a Limit Order
The ELEMENTS S&P Commodity Trends Indicator Exchange-Traded Note (ETN) is designed to reproduce the performance of the S&P Commodity Trends Indicator – Total Return. The index is comprised of 16 commodity futures contracts divided among six commodity sectors. The Index is designed to capture trends within commodity markets by setting its sector groupings long or short each month based on price signals.
It appears we should of waited on these two funds. We might have to sit with a little bit of pressure here, but I believe we will eventually get rewarded.
I do want to point out that you should always read the prospectus on any Exchange traded Fund or Note that is recommended so you understand any risk that might be associated with it.
Current Long Portfolio
Bought Powershares DYY ( Leveraged Commodity Note)
at 9.7 on a Limit Order
It closed at 9.64
Bought LSC ( Commodity Index Tracking Exchange TradedNote )
at 8.5 on a Limit Order
It closed at 8.35
Bought YCL at 32 on a LimitOrder
(Proshares Ultra Japanese Yen ETF )
It closed at 32
Bought CNY (Chinese Yuan) Market Vectors Exchange Traded Note
Bought at the Market 40.37
It closed at 40.36
Bought PIV ( Value Line Timeliness Select ) at 12.9 It closed at 13.42
Put in a Sell Stop at 13.3
Bought QQQQ ( Nasq 100 ) at 42.5 It closed at 55.8
Put in a Sell Stop at 54.9
Current Short Portfolio:
Recently Closed Positions
Bought USO ( Oil ) at 37.4 Sold on a Sell Stop at 37.4
Bought NLR ( Nuclear ) at 19.9 Sold on a Sell Stop at 25
Bought TBT (Ultra-Short 20 year Treasuries ) at 38.20 Sold on a Limit Order at 39.5
Bought TBT (Ultra-Short 20 year Treasuries ) at 35.8 Sold on a Limit Order at 39.5
Bought PALL ( Palladium ) at 50 Sold on a Limit Order at 75
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