Gunslinger Advisory - If Gold has finally turned
around, brave souls might want to venture into the triple strength miners ETF -
NUGT; 3 times the GDX ETF. A month ago I bought shares at $24 - today's quote
is $58! The bad news is, to hedge the huge Volatility factor (IV) of the 3X
moves - up and down, I sold a covered call on them 5 months out at 26!!
So missing out on the unexpected large move, I still
realize a potential gain of 36% (86% annualized) if NUGT us above 26 in
mid-June. High IV (Implied Volatility) is nice if one sells it, but there is a
reason for its high level !!! Caveat
Emptor.
Over the weekend, when I do most of my market research
(Barron's, Mauldin, et.al. to get a "leg" up on the week -BTW, I just had a knee replacement), I read a
study on how Google Search could affect the
upcoming election. It seems the powers that select which lines are
ordered from one on down - most people read the top two lines - can sway
readers one way or t'other. Google's head and most executives are Democrats, as
shown by the 10:1 donations. It could affect up
to 10M voters in November.
Another startling factoid that dawned on me: I've been
morally opposed to the huge rise in Fantasy Betting on sports, mainly football,
as the commercial aspect of it seems to be spiraling out of control (my Organic
theory). Is it Gambling or Wagering, ask the courts? Then I thought - what is
the difference between it and day trading the stock market? Requiring
intelligence, heavy research, some luck and patience, they are about the same.
Speaking of the stock market, it has been on a
cyclical upturn, but on weak Volume (last week was about the same as the
previous, which had a Holiday ). If the SPX
breaks up above the 1950 Resistance, it looks to 2000.
According to the historical model from 1928 to 2012,
if January is down to start the year (as it is in 2016), Feb. is also down (right); Mach shows a nice rally
midmonth, then the SPX slides down into June - then rallying into and beyond
the anticipated election.
As for Sentiment, after the second week, most
Indicators have normalized into the median areas, with newsletters (AAII and
Inv. Intell.) dead even for Bulls/Bears. One standout for breadth was the
McClellan Oscillator at 76, and true to form, the market did open higher, but
failed hour to hour. MMF inflows
increased as negative rates loom ahead.
Here are the numbers:
|
Date>
|
2016
|
2/26/16
|
2/19/2016
|
|
Indices:
|
DJIA
|
16639
|
16391
|
|
|
NAZ
|
4590
|
4504
|
|
|
SPX
|
1948
|
1917
|
|
WklyVolume
(Bshs).
|
naz/ny….
|
8.9/4.9
|
8.2/4.7*
|
|
Specul.Ratio
hi=bullish
|
1.82
|
1.74
|
|
|
Sentiment:
|
put/call-CBOE
|
65
|
78
|
|
VIX>50-alltmlow=8.8
|
19.8
|
20.5
|
|
|
Advance/Dec-NYSE..
|
2358/833
|
2683/516
|
|
|
Weekly
Net:
|
|
1525
|
2167
|
|
Cumulative:
|
159035
|
157510
|
|
|
Weekly
|
NYSE
hi/low…
|
155/120
|
76/116
|
|
New
Hi's/Low's
|
Nasdaq
h/l
|
90/209
|
48/178
|
|
McClellan
|
Oscillator
|
76
|
51
|
|
McClellanSum
|
.+750/-1000
|
-139
|
-467
|
|
Newsletter
|
Inv.Intel
-Bull
|
34.7
|
26.5
|
|
Surveys-Tues
|
Bear:-5yrs
|
35.7
|
39.8
|
|
Wed.
|
AAII -Bull
|
31.2
|
27.4
|
|
|
Bear
|
31.4
|
37.8
|
|
US$-WSJ
|
|
98.1
|
96.6
|
|
3-box
rev
|
Bullish%-
|
57
|
47
|
|
|
Fund Flows
|
WeekLate
|
(2.3B)
|
|
MMF
flows
|
Change
in $B
|
15.1B
|
7.5B
|
|
MargDebt-
top (300M)
|
monthly
|
445B
|
JAN.
|
|
2-yr
Tsy Yield: Inflation
|
0.80%
|
0.75%
|
|
|
TIP (ETF)
|
Inflation
|
112.4
|
111.3
|
With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance
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