The next couple weeks watch the VIX
Doc is with us today to chat about the conventional market and VIX to start. We then move into the oil market and gold.
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Doc: Looking forward to trying your volatility bet later next week………keep us informed of your thinking please.
Silver, I’ll attempt to remember—-also; at about the time volatility bottoms it appears the China markets will in all probability be topping. It’s interesting to me that it appears the next 2 weeks could see the confluence of a number of asset classes topping and bottoming. The conventional markets and the Chinese markets appear to be topping in the next 5-10 trading days along with the PMs; volatility appears to be bottoming in the time frame and so does the dollar. We then should see some reversion of all the markets—-it’s just a question of how much.
Doc great thoughts on volatility bottoming in the next week or two. I completely agree and picked up some more TVIX on Friday at the close. I plan on adding a second tier this coming week, and a third tier in 2 weeks. Then I’m waiting for a spike in volatility as well.
Good luck to all in their investing.
10 day chart on DUST is screaming NO buy. So I am sticking with NUGT or now.
You are playing with dynamite. Gold stocks are already leveraged 8 to 10 times with gold and then you multiply that by 3. UYM is a great materials etf which was near $30 recently. It is 2X and ranges from 30 to 60 over the years.
DUST just rose 12% in two trading days Jason following a 10 day rise in gold. That was a very respectable short term gain and all the better if you played it with higher leverage. You did not have to work hard to see it coming either. Like anything else, if there are risk free gains on the table you should take them whether to the upside or down. For me it is best to ignore the popular gold themes and just focus on the trade direction itself. Make hay while the sun shines and you will survive to trade another day rather than getting locked into an idea that might take months (or years) to actually pay off. Success is easier if it’s made in many small regular steps rather than a few big pay-offs timed to what the newsletter guys tell you. The big wins are typically reduced in value by all the waiting and mistakes that accompany trying to target exact bottoms and tops or by following the advice of others. Above all…..you have got to think for yourself. But I’m sure a smart guy like you already knows that.
DOC:
Could you please mention any of the particular PM stocks you are looking at that still look like they need to have a decent size decline into the end of 2015. Also, as of today, which do you think provides the better short term potential return: Shorting the VIX in 5-10 days, shorting the Chinese markets in 5-10 days or shorting some of the PM stocks? Thanks.
All The Best,
JIM
Jim, I like the chinese short the best. I’ll probably go long volatility if the vix gets down to about 13. I’ll take a small position in both and then if it moves in the way I think, I’ll add and then hold to try and pick a top. I don’t short the PM stocks.
DOC:
On the VIX, I meant to obviously say go LONG in 5-10 days. Thanks for correcting me and your feedback. What vehicle do you use for your Chinese short? Have a great weekend!!
All The Best,
JIM
FXP.
****************** WELL IT’S OPTIONS EXPIRY DAY FRIDAY ********************
AND AS YOU CAN SEE, we’ve been up and we have been down as they have tried very hard to hold GOLD DOWN, but this is MID OCTOBER and it is getting more and more harder for them to hold GOLD DOWN……….WHAT THEY DID TODAY was totally ENGINEERED by them but they could only get it down by so going into the close at 1:30 EST! NO NEED TO HOLD IT DOWN AFTER THE CLOSE so it should be interesting until the 5:15 EST electronic close……BUT LOOK FORWARD TO NEXT WEEK AS gold continues it’s climb up to a NEW RALLY AND NEW HIGH…………more happy trading!
Nope, if anything they will probably gap gold down hard on Sunday night and in the process erase a huge chunk of any gains in the miners.
The yen is not looking very good at all on the daily chart and that is not good for gold.
I am long miners, but today was by far the ugliest day we have had since the lows. It does not bode well for next week at all. I will be absolutely in awe if you are right.
Sunday night should be interesting. ……I posted some thoughts concerning some player moving out of the London and NY fix., I am curious if this will change the depth of the gap down.
Disagree Mark. The majority were on the short side of gold having taken positions prior to the recent run-up in prices. The majority of options thus expired worthless and caught the bears on the wrong side of the trade. Gold will most likely now embark on a decline for the remainder of the month…rinse and repeat.
DO YOU subscribe to the TURD REPORT…………?
I’m just not seeing it this time Doc…You did call it perfectly in August, practically to the day on the VIX but I’m just not seeing it in the technicals…a couple of overhead gaps I suppose?
Tom, the overhead gaps do help but I am looking as some other technicals as well that tell me this rally in the conventional markets have anywhere from 5-10 trading days left. We’ll see.
1200 is massive resistance where the big traders are likely to short and stamp out the rally.
Okay, guys; I have some bad news for you—-the commercials in the COT report for the past week again show the smart money for the third week in a row shorting the PMs rather significantly. For silver, the commercials went net short about 4000 more contracts while for gold, the commercials went net short about 13000 contracts.
DOC:
Maybe I missed it, but I’m surprised the way Gary covers the manipulation angles (which I agree with) he hasn’t factored in any PM reversal due to the increased commercial shorts on the COT reports.
All The Best,
JIM
Jim,
I took a look at the COT aftert he close and it does look like we are likely to see a move down into a daily cycle low next week. That being said that would just be a normal correction in what I think is an ongoing bull market.
The bull needs to continue to climb a wall of worry and a drop back down to test the bear market trend line over the next 5-7 days would keep that wall of worry in place.
Your call of of the end of golds bear market will be wrong once Gary.
Just like the previous times you have called it. …how many again?…we are losing count afterall…& they were all at a much higher price than gold today!
James the lessor was right a long time ago when he said you flip flop more than anyone else.
Aren’t we early in the cycle? Isn’t it more like 7-14 days down?
Good thoughts, Doc and Cory. Much appreciated.