Took profit early on with TVIX and SOXS from the hold over the weekend. We got a boost from the response from China regarding tariffs and canceling the meetings. The markets though lingered for a bit as we sold the run up. We got long once again and got a little run to a higher high and sold that move up. Then we started looking the other direction and took profit with longs in TQQQ, SOXL and UDOW before going long TVIX 1/2 shares end of day.
I did make the statement early on when JNUG was pushing 8.30 range that I didn’t like metals and miners and thought the move up was just a merger trade with Barrick and Rangold. Didn’t call DUST officially, but said dollar over 94 and I would look to DUST and JDST. We were just under 94 when I made that call and DUST was 36.75 and it moved up to 37.97 before closing at 36.86 and JDST was 71.75 and it went to 75.58 before closing at 74.85.
Nat gas we took a stab at once hit hit some resistance levels but got stopped out after it moved above that mark. Setting up for a bigger trade now though. UGAZ is 3 days on the Hot Corner and DGAZ 3 days on the Cold Corner. High degree of a low risk entry now into DGAZ should come in the morning on any gap down (up in nat gas).
Economic Data For Tomorrow
http://www.investing.com/economic-calendar/
We got our profit in some shorts and went somewhat neutral to positive and now a slight negative tone with only half shares commitment with TVIX. Realize that there is always more risk with TVIX but my signal came through today on the move up to at least go for a trade there. If /ES can stay below 2930 overnight, it opens us up for a bigger move below 2920 support level. That 2920 support level I mentioned last week held today and gave us a trade long the market, but there was no real follow through. 26 I said early on was support in TVIX and it held today, a day where the VIX was up .52 but TVIX down making no sense to most. We had taken our profit and were done with it and only at end of day here did we attempt a long again. If we do break 27.70 in TVIX, then a bigger fall to most likely below 2900 may have started. I won’t get ahead of myself but do expect volatility on Fed week and today we saw some whopesaw in many we follow, but we traded along with the market for some profit.
TMF going positive and USD/JPY negative and the market should fall and vice versa for tomorrow.
Foreign Markets
Last night I said; “with the China situation, hard to be a bull right now.” That came to fruition today with China withdrawing from trade talks. Most likely will continue to hit the markets. BZQ also moved higher today with RUSL bucking the trend and moving up with oil. Dollar lower these are supposed to move higher and vice versa. BRZU was 2 days on the Hot Corner and fell -8.28% today.
Interest Rates
TMV showed a little more life than I thought it would with the DOW down -181 points today. I thought there would be a little more flight to safety than what I saw. TMF may catch up tomorrow if we berak 2925 then 2920 on /ES. Lean that way.
Took a stab at DGAZ but it was too early. Now we are 3 days in the Hot Corner with UGAZ and we will look to get long DGAZ here for the bigger run soon enough.
Oil we ignored today after the bigger move up over the weekend. Not much standing in the way of oil here but it is getting toppy. Sentiment is up to 86.
Precious Metals and Mining Stocks
The dollar bounced today off the lows and broke above 94 again. Gold tried to move up but fell back. Silver not quite ready to go either. Metals are lagging any miners strength and it has shown to be an issues Friday and again today as JNUG and NUGT couldn’t keep their strength after a strong open. The merger of Barrick and Rangold might make some of your 50% holdings in smaller companies do well but JNUG ended the day down -2.47% after being up to 8.35 early on, trading at 7.88 here after hours.
We did get a long signal in NUGT today but I made the point that it might have been a false signal with the merger pushing us up early. Turns out it was. It does make me want to put NUGT on the radar if it were to go from negative to positive, but with the Fed coming up Wednesday, a rate hike of .25 that is expected should be dollar bullish still and that can put pressure on metals and miners. I like how we are 50% non-leveraged exposed and any dip of decent size we will go 100% long. We already traded the last leg run up in miners for a good return and one more leg down we’ll buy again and keep trading that way. Longer term holders this last move down should be it for a decent move up, but we have to sit through one more downturn before that move up. The bigger picture still has that looming deflationary credit contraction out there and I’ll make separate calls for leverage “trading” versus any buy and hold strategies. The tariff issues with China is putting pressure on metals still as well. I do think the longer we linger down here and if we can get one more test of the lows, the bigger the move up will be for metals and miners. But the dollar being where it is now with sentiment so low, although it moved out of single digits today, should worry the bulls right now. I warned the bulls when it was at 8 in sentiment that the dollar was due for a bounce. And also that physical gold and silver have not had the moves to support the bigger moves in JNUG and NUGT we have had. Moving forward, I think we should be cautious on the long side and still look to short any runs up with DUST and JDST. I’ll try to make more than a suggestion like I did today, but it wasn’t a bad suggestion with DUST and JDST over 94 on DXY.
