Well it’s only been about a week but I’m taking a lot of positions off the table or hedging them with covered calls or puts.  Since my last post on the 25th, the market has rise about 4% but most of the positions that I have recommended have risen 5-10%.  CLF – 12%.  EMC 7%.  SD 9%.  BAC 7%.  C 6%.  TBT 7%.  So it’s time to take some off the table.  Don’t be greedy.  We’re still in a trader’s market.  That’s all Mister Bull has to say for now.

So it’s time again.  I don’t say this but sometime last year and sometime last month.  But I’m all in again.  All two of you have been following my blog have seen my record so I think it’s pretty much a great time to deploy your money.  I mean now!  That’s what I’m doing and working on buying some real estate so it’s time to work toward taking advantage of things that will rise with an economic recovery.  Stock rise when the economy is down despite what the logic that it defies because the market is forward looking.  Here’s the places where I think you should probably look to put your money:

1. Technology – there will be more and more consolidation.  Any technology that cuts cost and takes advantage of the more to digital.  Examples: EMC, AKAM, IBM.  I own calls in EMC.

2. Commodities – Natural gas has been a laggard but I still think it’ll catch up.  Steel and other metals should do fine.  I own SD and CLF again.  Will add some SLV and GLD possibility later.

3. Financials – Following the whales of the industry – they see upside and I think they are much smarter than the analyst who get paid to talk not to manage money.   I own BAC, C, and CNO.

4. Housing – They should find some support because although housing is still in the dumpers, they are far too shorted and could stage a decent rally.  Looking into KBH and IYR.

But that’s it.  No time for charts but the S&P is oversold.  Treasuries are way overcrowded and it’s dead money now.  The dollar tried to make a decent rally but now it has hit resistance so we’ll see a tumble down.  So hold on tight.  We’ll be in for a pretty decent rally into the end of the year.  I think the surprise is on the upside especially with headlines calling for a 20-25% drop in the market and that treasuries are not in a bubble.  Are you kidding me?  We’re already close to negative real returns.  Capacity utilization is close to normal so we’ll see some pick up sooner than later.

So the market have retraced a bit from it’s awesome run since the middle of July so it shouldn’t be a surprise because every time the news tells you the reason that the market went down, it’s pretty much old news.  I get surprised every time the talking heads try to give a reason for why the market drops.  Can’t you just say the bloody hedge funds and prop desk are just taking profits?  It’s not like we didn’t know that we might double dip.  People were talking about a “W” shaped recovery since the financial packaged was passed over two years ago.

Savings rates are still high but I think that money will start flowing soon.  The commodities prices are telling us that there will be inflation before we expect it especially with such cheap money out there.  Every month that we have such low rates, people are refinancing and magically there is more spending cash.  I think it’s probably a good time to take advantage of those great rates to buy some real estates but while that happens people should probably find a place to put their money other than treasuries.  Treasuries are for the meek.  But the meek doesn’t inherit the earth in this case.

But I think the market will bounce.  The bad news is priced in.  The valuations are getting too tempting not to deploy money.

The market powered through some resistance today so it’s making higher highs and higher lows.  It’s a good sign.  It looks like things are getting a bit heated.  I started selling this morning when the market was up 2% so I’m much less leveraged but not hedged as much as I’m still net long.  I’m thinking of getting a bit more neutral by buying some put spreads.  I think if the market moves up another 2-3%, protection will have to be put in place.  But I’ll sit and wait for now.  I think there’s still room on the upside up to the 1060 level on the S&P but it’s going to be a very very rough climb.  The rise in the market has corresponded with a huge correction in the dollar that has boosted commodities especially cooper and steel.  CLF, one of my favorite trading positions has risen from $45 to $60 in about three weeks.  An enormous 33% most which part of it I missed because I sold calls at a certain point but still, a tremendous move.  I’m a bull not a pig so taking profits is part of the game.  The strength in the Euro probably was helped by the shrinking of credit spreads which went a bit crazy just like in 2008 but as they shrank, people started deploying more capital.  There’s probably more capital out there but it will probably be saving for a rainy day until incomes start rising which will happen once the direction of unemployment moves down.  I’m also watching the capacity utilization numbers which has been slowly rising for the past couple years.  It’s close to indicating a change to inflation but not quite there yet.  But soon.

In fact, I’m thinking of buying some hard assets, namely real estate.  Rates will probably never be lower and real estate is a great hedge for inflation and the dollar.  Well not as much for the dollar but it helps.

The market ended up about 7% this month and with it, I had the best month of the year.  I was able to beat the market but a wide margin so it was great.  It seems this should probably continue a bit longer as it may seem overbought but there is probably a lot of money still on the sidelines now.  There is still a pretty negative sentiment but it’ll probably make for a great move in the market sooner than later.  Everyone is pretty much discounting all the possible positives that can happen.  Once money start pouring into the market, the velocity will run faster than it ever has mainly because there is so much money out there.  Governments will probably see record tax receipts in a few years due to increase in economic activity and tax rates.  Inflation may rear it’s ugly head sooner than later and with it comes the chase for commodities and other hard assets.  I am not saying that it will happen soon but I think the picture is less bleak than some people think.  But for now, everyone should probably tread lightly.  I’m not making any up up and away calls anytime soon but Mister Bull will sure let you know when the next one comes.  Enjoy the rest of July.  Bring on August!

So I’ve gone back in the end of last week and now I’m been parring things down a little bit.  I’ve sold some calls on most of my positions so I limited my upside but also protected much of my profits a little bit.  I’ve also put on collars on some of my positions just in case.  But I officially also initialed a small short position with a SPY put spread.  I’m looking to get back into my silver and possibly a gold position but waiting for some consolidation.  But there’s more earnings this week and we’ll see what happens but the market is probably a bit overbought in the very short term so there should be a little bit of a pull back sometime this week if not for the rest of it.  We’ll see but I’m somewhat neutral; trying to protect all the profits this month.  Actually if I close out this month where I’m, it’ll be the best month this year.  I’ve been having good months the whole year only to see them turn into average or less than average months toward the end.  So it’s time to close.

S&P 500 July 22, 2010

The market is making another attempt at breaking resistance of 1100 for the S&P 500.  I think it’s going to happen this time. Usually the third time is the charm but there may be some mixed news with earnings but in general, the market has been able to bounce back especially after bad news.  So it looks good.  I started buying again as the market started softening.  I’m a bit long with very little hedged at this time.  I think money will start getting back into the market soon as the year ends because there really isn’t anywhere else for it to go at this time.  I think the real estate market is getting stable with the low rates and there will be some growth there soon as the population growth because it’s been almost three years since the house recession started and people have raised their savings rates for the past two years from near 1% to close to 4% now.  Corporate coffers are full.  Private coffers are getting full.  I don’t think all the money will come at the same time but when it starts moving, I think it’ll be rather swift.

Longer term, commodities and energy will rule again.  I bought a lot of calls in silver and solid positions in CLF which have been hedged by selling some in the money puts now.  I am invested in a bank, some natural gas, and short the treasuries.  I’m going to start pull off some positions after tomorrow and Monday when it break resistance.  The bears have much more to lose than to gain with all governments ready to keep everything stable.

Boy time goes by fast these days.  I’ve been a bit busy with all my projects so I haven’t had much time to dedicate to trading or blogging.  But I’m thinking by the end of this year, I should have much more time to dedicate to my investments.  It’s probably the most efficient way there is to increase your wealth as long as you know what you’re doing or at least think you do.  But if you followed the blog, you probably should be a bit more cautious into earnings or at least protect some of what you made from last week.

The rally is still going but it’s getting a little bit more weak.  The market seems to have come a long way but resistance seems to have come and we’ll see a test of it.  It looks like 1100 on the S&P is a critical point to watch but there is a possibility that earnings will make a big push to put it over because the markets are not quite overbought yet so we may still have some room but it’s probably time to either buy some protection or sell some calls or lighten up until we see a breakout.  Either way, they are all very smart things to do.  I lightened up and sold some calls but looking to enter some names when I get the chance.

The charts suggest there’s some room but just be careful now.  This is where wealth preservation wins but I feel that there are more gains ahead.  It’s the macro economic trends that will push us toward expansion and no one can do anything about it.

By the way, I’ll be updating the design soon.  I haven’t had time to change it up because there are more lucrative web projects to work on but soon.  It’s a bit of an embarrassment to have the blog in this type

It’s time people.  Gloom doom.  It’s here.  We all should have known because the stimulus wasn’t going to last forever and they told us that it would be running out during the summer of 2010.  So here we are and should we be surprised?  Should we be surprised about Europe and their liberal government spending ways?  You can’t promise everyone early retirement and full benefits.  Someone’s going to have to pay for it and they are going to but just through some changing to retirement ages and benefit cuts but it’ll be fine.  So now that all the negatives are out there, no one feels that there is anything positive.  These are the times you push forward.  Let’s put the money to work.

Technically the chart looks dangerous but there is a bullish divergence in the charts.  The risk reward is now skewed to the positive side as there isn’t much reward for the shorts.  I think we’re here.  I don’t want to say up up and away again but it sure looks like a great time to throw in that allocation to the IRA.  I’m looking into techs, natural gas, commodities and some financials.  Let the bulls run free again.

- Mister Bull

I was positioned toward the short side with puts on the QQQQs but look what happened.  I took some off the table with the near 2% drop but wow, it was pretty strong.  I also sold in SRE and still holding my long term Google position.  I opened up a position in TBT but I think the next major energy play that may make your retirement may be natural gas.  I will write about this sooner than later.