All Quiet On The Western Front.

Nothing much to say except that every asset class is following the script. If you are a regular reader of this blog, nothing in the market’s action today would surprise you. Equities held ground, crude sold off, PMs are neither here nor there.  It has all been told before.

They say that because Ben opened his big mouth, equities dropped. Poor Ben! Before QE Infinity, folks would eat his every word and now they don’t want him to open his mouth.

We are close to the 1^st target of bounce which is Fib.38.2% retracement.  Anyway, it does not matter how high the bounce goes, so long it holds till the end of the month. My initial target is around SPX 1400-1425 but I would not be surprised if it goes higher. I am using out of money calls of December to play the bounce and have advised everyone who care to listen not to go long, rather reduce the equity exposure.

Regarding Crude, the bounce failed. Despite the valiant efforts of chief ranter to scare folks with coming zooming of oil price, it closed 2% lower. And yet it is too early to short it. I think crude may spend few more days in this range, backing and filling before we can short it again.

Gold and silver should be going up because this the good seasonal period for the bounce but so far they have not shown much strength. I find that little worrisome, so I am staying away from it for now.

And Nat. Gas continued it’s up move which I had written before.  Not much to comment there either.

So you see, nothing much has changed and I am not finding much to blah blah.

Hope you are able to make some profitable trades because the calls could not have been much clearer. If you have any question, please feel free to email.

Thanks for stopping by. Hope to see you tomorrow. Have a great evening folks.

Bear Market Rally-Part 2

Well, that was quite a bounce. There are theories galore for the rip but the fact remains that it was due and it came on schedule. How are you playing the bounce? Yes, it is just a bounce not a trend change, which is firmly down. We have talked about this bounce and we knew it is coming. What we don’t know is how far this bounce will go. This week is a shortened week, nothing much is going to happen after Wednesday afternoon. So whatever more upside is to come, will be next week and this time I would take up short positions. But that is still two weeks away and lets 1^st see how these two weeks play out.  I would love to see the equities making a high around November 28-29 and short the hell out of it. Rating Agencies put a spanner in the enthusiasm and downgraded France. Euro had a knee jerk reaction but is slowly recovering. SPX futures are down about 1 handles and Rant in Chief is predicting a collapse tomorrow. Let’s do a quick recap:

Equities:

As expected we have the low and a bounce.  Apple had 7% + bounce. Question everyone asking is: how far will it go? My guess is not very far. I would be happy to get up-to 1425 in SPX but I have a feeling it will go further. The other option is to measure the time. Cycles tell me that the up move has a life of about 2 weeks. So instead of front running, let us just wait and see how far it goes till then.

As I have written before, I am playing this bounce with out of money calls on TQQQ or TNA.

Here is the paradox. Now we have a confirmed sell signal. But the late bears have been taken to cleaners. Let me share this chart from Lance Roberts:

So we have about 2 weeks to enjoy the ride up and make the most of it. But again and again I would caution readers that this is not the time to go long equities. Rather, use the bounce to reduce the exposure. We will get a better entry opportunity soon.

Crude:

As the saying goes, rising tide lifts all boats, crude also rose along with other risk assets. The story is same here as well. I have already written that crude will rise along with Euro. Crude is also oversold short term and a price target of around $91-$92 can be expected. Also it would be a wonderful opportunity to short in case you have missed it last time. But there is no hurry. In fact higher it goes better the shorting opportunity.  There is a confirmed sell signal for Crude as well.

Precious Metals:

May be I closed my long gold little early but I am not feeling confident about the PMs here. Even today, with everything ripping up, Gold did not convincingly close above $ 1730 or silver did not cross $33 very robustly.  At the time of writing, both are below that respective line and the prices did not held above. May be PMs will get a boost along with other asset classes but I would rather wait for a while longer.

Nat.Gas:

Nat.Gas did sell off today. It seems that traders took some money out of it to play the equities and crude. If that is correct, we will see Nat.Gas struggling a bit for the next two weeks but I think it is making a base at $3.70 and will make a run higher. Normally Nat.gas spends a lot of time in one range and all of sudden jumps to the next level. Just a bit more patience needed.

Other Stuff:

While the late bears have been slaughtered and will have little love for the next two weeks, the rally to the yearend cry has started popping up. This is nonsense. The selling is not over. Let me put it in a better way. The real selling has not yet started. Too many folks were and still are complacent about the correction.  Did you read about Romney backer, Steve Wynn, declared a special dividend so that he can save on tax which will go up next year? Or for that matter Wall Mart preponing its dividend dates? Funds will sell in December to book profit/loss whatever and get out of long positions. We should also take a cue.

Thanks for reading World of Finance. Hope you are able to stay on the right side of the market and make some money.  Thanks for your donations and supports and I take this opportunity to remind you about the Amazon link for your Black Friday Shopping. 

Bear Market Rally.

The bear is tired and is going for a short nap.

A quick recap with various asset class follows:

Equities:

In my last post I said that I am looking for a quick bottom on Friday and a bounce from there. The downside target for this stage has been achieved and I would be very surprised to see any lower low from here. In fact we can expect a fast and furious rally but don’t let that fool you. It is still a bear market rally and don’t let the guard down. I have said before that so far the bears have disappointed us. It has been less than 10% correction spanning over 60 days. All it has done is to create a fear psychosis and the pedlars of gloom and doom have had a good time.

The short term cycles now looking for a bounce and I have some support from the Analog of Eric Stewart. I have said before that I do not trade based on Analogs. There are software available which will show you many matching patterns. But they are fun to watch while they last and sometimes act as an echo chamber, reconfirming what we already believe. So right now I believe that we will have a bounce and therefore I think that this Analog is super:

But I have other reasons to believe that there will be a bounce and not just this Analog. It will be good if it works out this way.

I am not going long because I think the bounce will be temporary. Rather, I would use this opportunity to short the market after the bounce is over. For now, if I would like to play the bounce, I would probably buy some cheap, out of money calls on TQQQ or TNA for December and risk very little capital, if at all.

Precious Metals:

I was looking for a two week bounce in PM sector but so far the price actions do not show any strength. Longer term I do expect Gold to reach $2500 and silver to cross $50. The COT action shows that deep accumulation is going on but the BOYZ want to shake out the weak retail hands. So we might see a quick sell off which may not be very deep but emotionally disturbing. For e.g. if we see gold below $1700, there will be noise in the MSM that gold’s golden days are over. Silver may even test $26-$27, if it closes below $32. A quick trade can be ; buy ZSL if silver closes below $32. It may generate a 40% return in 45 days. If we have a core position, we should not bother much but use the weakness to accumulate more. This is just a trade idea.

Crude:

The bounce in crude is just that. A bounce. It is following the Euro and nobody believes that the fight between Israel and the terrorist organization Hamas will lead to supply disruption in crude. Crude might stay elevated along with the equities and like equities; it will be a very good shorting opportunity. I may short crude in the coming days and I am very sure that this one is going to be a  low risk winning trade.

Other Stuff:

In other stuff, the dogs of Russia wrote that IDF (Israel Defence Force)Blog has been hacked and is out of commission. This is a big lie. IDF checks its visitors and if they think that the visitor is not harmful, they will allow access. Obviously the Russian Agent was denied access and they twisted it in a different way.  I am trying to stay away from political discussion and stay focused on the market. But this is one exception I am going to make, that is, express my support and solidarity with Israel.

That’s all for this nice weekend. If you have any question, you are free to shoot me an email any-time. Thank you for all your generous donations and once again, I take this opportunity to remind you about the Amazon link for the coming back Friday. Have a great weekend friends.

Google Analytics for customer retention

Yes, probably not the best analytics out there, but Google analytics is Google's favorite tool and they are constantly improving it. Google Analytics gives insights on how customers are behaving on your business website. We can see and identify weaker parts of the campaign and use the data to make improvements on the website.

How can Google Analytics be used to improve customer retention?

By observing trends in visitor traffic, we can direct the visitors to some actionable item on the website. Say for e.g. if we know that there is a huge traffic serge in the month of December every year, then we should try to convert most of the visitors into customers by letting them know about the DECEMBER SPECIAL's.

Google Analytics also tells us about loyal and returning visitors to our site. We can can then find patterns in loyal visitors visits (which pages are maximum visited, which pages need to be improved, which pages are visited a lot but are slow, etc etc). These are small things tremendously boost the overall campaign. As we preach at keepcustomer, every single customer is important, and can bring new customers.

Are you using free and awesome Google Analytics to track your business online?

Falling Apple.

Someone has literally yelled fire under Apple stock and the stampede to the exit is resulting in casualties.  What happened to all those projection of $ 1000? Why those analysts are not being shamed publicly? But that is Wall St. for you and that’s what all the talking heads do in the various 24/7 TV channels. Sell snake oils.

If you are holding Apple and find yourself at a loss position, there are two alternatives. Depending on what is your cost, cut the loss. But if you are still holding it now, you may want to hold it till next April-May. Apple will definitely retest $ 700 before we can call it’s all over. 

As of now, I am very disappointed with the bears. Over 60 days ago we had the high in SPX and so far we are down only 8%. It is not even an official correction and McClellan Oscillator is down oversold. It is time for a bounce because there is not much scope for more downside.

On a daily chart, SPX is down almost 3% standard deviation. It will be nice if we get a panic low of another 10 points and I am hoping we will get that low tomorrow. But even otherwise, we had a intraday low of 1345 in /ES (emini or spx futures) and my downside target is around 1340 in futures. So we are very close to a bottom and may be the bottom has been reached or we are almost there. In any case the divergence in VIX is quite telling and I do not how to explain it except that may be smart money knows that a collapse is not yet imminent.

(H/T John Kicklighter)

Both Gold and Nat.Gas had a bit of sell off today. As of now I am looking for $ 4.00-$ 4.10 as the upside in Nat.Gas which is about 8%-10% from here.  We already had 10% upside from $ 3.40. That is more than the downside correction we had so far in equity indices. Gold is suppose to have a bounce in the next two weeks and the moot point is whether it will close above $1800.

Crude again sold off today. What happened to all those shrill cry of all out war in Middle East and crude going through the roof? I think cycles know best. While a bounce in crude is due now along with Euro, the down turn in crude is not done yet.

Except AUD, all other pairs are at odds with the equities. Euro is making good progress against US $. Whatever happened to the collapse of the Eurozone? But we do not want to go long in Euro because this bounce is just that, a bounce.

Overall, I am looking for a quick bottom by tomorrow and a short term bounce. The magnitude of the bounce will tell us if the correction is over but I think we will see more selling after the bounce. Normally the lows will be retested again before we can have all sorts of divergences. And the fiscal cliff is very much a possibility and not sorted out. Many big funds have already sold some of their portfolio and they will sell again in December. So we are not done yet. Like I said yesterday, it will be prudent to reduce the exposure in equities but I don’t buy the collapse scenario yet.

Thanks for sharing my thoughts and for your donations. Really appreciate your help and support. Please keep an eye on the Amazon link should you need anything from Amazon.

A Quick Trade In Gold?

Today Israel killed one of its dreaded terrorist. Good for Israel. But the agent of Russia immediately jumped out to support the terrorists and started barking. It proclaimed that now there will be an all out war in Middle East and Crude will go through the roof. These enemies of Israel even started ridiculing Bank of Israel with their Apple position. How do they know that Bank of Israel still hold Apple and have not already sold it at a profit. They don’t. It’s all baloney and treason.

On a short term basis Crude is due for a bounce and unless it takes out $92 in the next two weeks, we are most likely to see a lower low. US Dollar did not do much and 30 Year Bonds sold off. If the world thinks that there is going to be a war, US$ will jump through the roof.  US$ has retraced Fib. 0.618 of its last down move and will most likely take a breather here. And all commodities will likely benefit from that. So we will see Crude getting a bounce and so will the precious metals. At some point in future US$ and Precious metal will move together and then we will know that bad time is really upon us.

Talking of Apple, here is a chart of Apple which I have borrowed:

(H/T Schaeffer's)

It shows lower highs and higher lows, which means volatility compression. Very soon we will see the stock breaking this triangle and I expect the initial move will be up.

We are also coming close to a short term bottom in equities. As we broke down /ES 1370 the next downside target is /ES 1330-40. If we have one or two more days of selling, we will see panic bottom. As I wrote yesterday, the actions in the equities and in forex are not matching up. While Euro/Yen made good progress, equities did not catch up. One of these two is lying. We will know for sure in few days time.

Similar position is with Euro/USD. However AUD sold off and is now consistent with the down cycle.

Moreover, the action in VIX and 30 year bond do not signify any imminent collapse. There is a positive divergence in VIX. While SPX made lower low, VIX did not confirm.

From a high of 1470, SPX today stands at 1355 or 115 points drop.  From the top that is less than 8% correction in 60 days. And if you listen to the MSM and rant blog, you will think that the world is about to end. Folks, as of now, it is just a correction. While it would be prudent not to be long and reduce exposure to equities, I do not think any long term investor need to be short yet. At least I am not and I am looking for opportunities in other places.

Apart from Nat.Gas, I think there is a short term, less risky opportunity in precious metals.

The following is from Stock Trader’s Almanac:

Gold prices tend to move up prior to the holidays, and the trend has worked especially well over the last 12 years. Seasonally speaking, it is best for traders to go long on or about November 19 and hold until about December 4. Over the last 37 years, this trade has worked 21 times for a success rate of 56.8% .The cumulative profit tallies up to $31,490. What is interesting is that this trade has had a 12-year win streak, starting from 2000. The longer-term record of this trade is not as eye-popping, but with persistent inflation concerns (the Fed has embarked on a third round of asset purchases that has no predefined limit), renewed fears of Europe’s debt crisis, and persistent deficit spending, we would look for the current winning streak to continue. 

They wrote the above yesterday but I am long gold from last week. Because cycles are calling for a short term bounce in Gold.  Let’s take a look at the seasonal chart of Gold.

The chart does show a bounce from Mid-November till end of November / early December.

 Nat.Gas took a breather today which is only to be expected. In fact it should stop here for few days and digest the gain before moving up again. Whether you approach it as a trade or investment is up-to you. As a trade it will go up and down but as an investment, I do expect Nat.Gas to cross $ 6. It may take a while, but it will be there.

That’s everything for this Wednesday. Hope you are not in panic mode nor are you getting greedy to short the market. There are other ways to beat the casino and most important thing is to avoid/ reduce risks at all costs.  Go for something which will definitely go up in few months time.

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Plenty Of Fish.

No, I don’t mean the dating site. I am talking about various asset classes.

Yesterday’s big story was 10% + drop in VIX. What is the story for today?

If you have not guessed it already, it is Nat.Gas. For the past few days I have written in the blog that I am scaling in Nat.Gas. How many of you did take the trade? Because if you did, you would be very happy person today.

After a long time, I got some free time to Tweet in the morning when I wrote that I am expecting a bounce. We got some bounce which did not last but the most important thing is that /ES 1370 held another day. In fact after the cash market closed, SPX futures are up 4 handles and Nasdaq futures are up 15 handles. Go figure how it will be tomorrow. Let us see how it goes but I am neither short nor long equities at this point of time. The market played with bulls and bears alike. In the morning the bears covered and in the evening the bulls covered. At this rate who will be left playing the day trading game? Only your broker will laugh to the bank. Again and again I want to emphasize the point that correction does not mean collapse. We do not have to be short in every correction nor have we to chase every up tick. But we must learn to disregard the noise coming out of the Russian propaganda machine better known as “Mad as a rabid dog” blog.

I want to show you a chart from Chris Kimble.

As you can see, there are about 40 asset classes in that chart. Equity indices are somewhere in the middle and in the last 6 months they have not given much return. On the other hand risks associated with equities have never been higher. Why not look for other fish to fry.  As of now I am waiting for an upward break of Gold which is short term in nature.

The king of carry trade Euro/yen is showing a kind of double bottom.

I think a bounce up-to 102.25 is very possible in the near term. And if it closes above that level, then we can look for a good bounce in SPX. I am not saying it will happen; I just want to draw your attention to all possibilities. On the other hand if it breaks down below 100, we can safely short the market.  As of now, things do not match and 2+2 = 5. So better be safe than sorry. Even AUD is acting strange. It was up today and there is no reason for AUD to go up while cycles are down.

The following table is from Stock Trader’s Almanac and it shows the DIJA performance during the Thanksgiving Week.

According to them:  The best short-term trade appears to go long into weakness this week or on Monday of Thanksgiving week and selling into any subsequent rally before the Friday of Thanksgiving week. 

I find that it is good to know the seasonal pattern but we cannot absolutely always depend on past trends for a correct call. But yesterday I said that I am not going to short the market before November 23^rdand this call from Stock Trader’s Almanac re-confirms my thought process.

That’s all for today. Hope you all are making money in this casino. With black Friday coming up, please remember to use the Amazon link if you plan to buy anything from Amazon.  Thanks for sharing my thoughts.