Tuesday, June 10, 2014

Long Volatility For A Trade $VIX

Is the bottom in for volatility? I have no idea. No one does. But I will say a there is a favorable risk/reward here from the long side to start the week. Why is it so good? Well, we have a defined level where we’ll know if we’re wrong. If we take out Monday’s lows, all bets are off. If you can stomach it, you can also use Friday’s low as the mental stop. It’s an easy entry point.
Here the potential failed breakdown last week and quick recovery back above the early 2013 lows. It’s when things like this occur that I get excited. The possibilities if correct are tremendous. But more importantly, if we’re wrong – who cares? The risk is very well defined. Also, between what I’m hearing from traditional media and the amount of bearish superlatives about volatility, I’m pretty sure we’re close to an important low. But the best part is we’ll know if we’re right very soon and the risk/reward is very much skewed in favor of volatility buyers.
6-9-14 vix
We’re looking at a daily candlestick chart of the $VIX going back a couple of years. Last time we were down here, Volatility spiked 23% in a few days and over 60% in less than a month. I think we can see something very similar:

There are a lot of ways to take advantage of this: ETFs, Options, Equities, etc. The execution really depends on your time horizon and risk parameters. I just like the price behavior, so I wanted to point out what I’m seeing.
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Retail ETF Poised for a Breakout?

For a good period of time this year we kept hearing the phrase "Blame it on the weather," as the excuse for soft retail sales. Even though the broad market isn't up a ton in the first five months of the year (up 5%), retail has lagged (Down 3%), see chart below.

As you can see, buyers have stepped into Dollar Tree (DLTR) after resistance was taken out. Carl Icahn seems to think Family Dollar (FDO) is undervalued, as he has announced this morning he has established a large stake in the company (see article here).
If XRT breaks resistance of this small pennant pattern, odds increase it will bring in new buyers, similar to what took place in DLTR!

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GDX & GDXJ: Saucer Bottom & Gaps Analysis

Morris Hubbartt

Super Force Precious Metals Video Analysis
posted Jun 6, 2014

"Our main format is now video analysis..."
Here are today's videos:

Gold Cost of Production Zone Charts Analysis
Silver Slow Stokes & Candlestick Charts Analysis
GDX Saucer Bottom Charts Analysis
GDXJ Gap Charts Analysis

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This Will Bring The Entire Global Ponzi Scheme To Its Knees

kingworldnews.com / June 9, 2014
Today a man who has been involved in the financial markets for 50 years spoke with King World News about what he warns will bring the entire global financial system to its knees.  Below is what John Embry had to say in this fascinating and timely interview.
Eric King:  “John, what did you make of the former Greek prime minister’s comments to Ben Davies?”
Embry  “I’m surprised Papandreou was that candid in answering Ben’s question.  Ben is one of the smartest guys I know and so I was pleased that he was able to get Papandreou to admit that there had already been discussions about creating a new world reserve currency….
Continue reading the John Embry interview below…
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Chart of the Day - Westmoreland Coal (WLB)

The Chart of the Day is Westmoreland Coal (WLB). I found the stock by sorting the New High List for Weighted Alpha then used the Flipchart feature to review the charts. Since the Trend Spotter signaled a buy on 5/27 the stock gained 6.99%.

Westmoreland Coal Company's principal activities are: the production and sale of coal from the Powder River Basin in eastern Montana; the ownership of interests in cogeneration and other non-regulated independent power plants; and the leasing of capacity at Dominion Terminal Associates, a coal storage and vessel loading facility.

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