Dec
2

Chasing Yield

es_031

ES has broken the overnight range and is up about 4 right now.

 

trin_008

Note the divergence between $TRIN and the market generally. $TRIN is telling us that the move higher is weak.

iyt_005

IYT is near the top of its range at $73. Not a bad place to initiate a short position with a tight stop. I’m sticking with my plan of trading one major index (I have not initiated an index trade yet). Therefore, I’m not going to take the trade but I throw it out there as an idea.

xlu_001

Also of interest is a breakout on XLU with volume. I already own SO in my retirement account but if you believe the market is going higher and are looking for a conservative holding XLU could be worth a shot.

Other high yielding sectors are also performing well.

xlv 

About a 10% move on XLV since the beginning of November. That is a big move for healthcare. Names such as PFE and JNJ have had big moves. If you missed XLV, perhaps XLU is the next XLV.

So what does this mean? Money is moving into more conservative assets.  I have already posted about the flow of money into treasuries. We’re also seeing a rotation into more defensive stocks. XLP is almost back at its all time high. Could the Dollar be next?

gld_003

Gold in my opinion is masquerading as a conservative asset. I would never short gold into this parabolic move but I do think a correction in gold is imminent. I expect it to at least move back to its 50-day SMA. That would send GLD back to $105. Long term I consider the breakout over $1000 ($100 on GLD) to be very significant and I think GLD has potential to run quite a bit higher.

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  • rosocecasita
    Aye, Long GLD & SLV,

    Not sure when the dollar carry trade unwinds, but every down move in the Dollar is being amplified in Gold & Silver, and every up in the dollar is being muted,

    I know it can't go on for ever, but it can remain irrational a long time ( I am long GLD & SLV and Physical of Both)
  • in ref to EvilSpec
    stop by my place
    if you have not found it yet - all ES old timers are there
    http://trading-to-win.blogspot.com
  • rosocecasita
    Thank ya, I'll check that out =)
  • You are doing great with the GLD and SLV trades. If I was in those I would use the 7 or 20 day as my stop point and just let it run.

    Physical is cool. Do you have a safe with gold bars in it?
  • rosocecasita
    Buried in air-tight containers my secret hiding spots =)

    As I'm such a small player, my time frame needs to be much longer, a simple stop out costs me much more because of transactions costs, I'm willing to withstand much more pain as these are slow investments that are mostly a substitute for sitting in cash.

    I don't want crazy 40% returns on the majority of my account, just stable growth, and while gold is incradably volatile in the last year or two, I just can't seem to bring myself to put cash up for anything else, Index funds, stocks, about the only thing I bought was a Bond yielding 8% from Freeport Copper & Gold Mining.

    I've got a very small (< 5%) speculation account that I'm more willing to jump on some Purchased only Puts/ Calls, (I won't sell options, way to risky for me) that I haven't been doing well with.
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