6/5/2011 8:03:08 PM
Hello Everybody
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Trade Actions:
Nothing has changed from last week. We are in a stall mode. I think a strong rally is about to start in the stock market, but it is going to end up a big fizzle.
I know some of my readers would like me to recommend some action but there is none at this time and I do not want to force any trading set-up that is just not there.
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:
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.
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 . I am looking at SH (Short SP) and PSQ (Short Nasq).
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 still feel long term oil is a good place to be, but shakeouts of weak hands are always needed in Bull markets.
Metals???
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.
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.
Bonds?
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. It has me scratching my head but I believe it is about to turn. Remember I said the end of May it should turn.
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.
Commodities?
Bought 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 Portfolio | |
| Bought SLV (Silver) at 42.2 | It closed at 35.3 |
| Bought PALL (Palladium) at 73.8 | It closed at 77.8 |
| Bought DBA (Agriculture Commodities) at 34 | It closed at 32.9 |
| Put in a Sell stop at 31.7 | |
| Bought Market Vectors KWT (Solar Fund) at 12.78 | It closed at 10.6 |
| Bought USL (Long Oil) at 43.78 | It closed at 45.9 |
| Bought TBT (Short Bond Fund) at 39.2 | It closed at 33.1 |
| Bought CNY (Chinese Yuan) Market Vectors Exchange Traded Note | |
| Bought at the Market 40.37 | It closed at 40.28 |
Current Short Portfolio:
None
Recently Closed Positions
Bought PHO (Water) at 20.3
Sold on a Sell stop at 19.2
Thank You
If you want to contact me send me an e-mail bill@stockbarometer.com
