USD Update

Please refer to my last post about USD and our long-term calls.

This post is just a follow up and see how this last call is so far doing. Around two weeks ago I defended the Euro had topped and we were poised for a big move down in Euro (and implicitly a big move up on USD) in the following weeks.

The fact is following that post the USD has risen almost 8% now which in the currency world is a very big move already. EURUSD dropped already almost 1000 pips which is very considerable and if one were to be short that would translate into 10 000 dollars of profits per contract - a very handsome fee indeed.

Here's how the picturee has unfolded since then:

It seems that our call is on the wagon thus far... If indeed my prognostic is right, this leg that has started now should take the USD higher in a very powerful move since we are now crossing into third wave territory.

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Disclaimer: The author holds short positions in EURUSD and long positions in USD Index. The author does not take responsibility from the actions taken by others. The opinions listed on this article are of the author only, and shall not be deemed as financial advice, or any other sort of advice. All visitors to the blog should do their own research before making any decisions. This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses any one might sustain from the content provided. Author is not a registered financial advisor. Author does not engage in dispensing financial advice.

LMP Portfolio

It has been a long time since an update in our portfolio.

We haven't added a single security in the past 6 months and in a way I am happy we didn't since a lot of our shares have gained a lot since then rising more than the index itself.

I'm not happy with one thing though, the fact that we haven't made money for the past 5 months or so due to the fact that we are hedged. I assume the responsibility of that but unfortunately I know how it is watching the markets run up and we are hedged without making any money (or very little) on the upside. Indeed our portfolio filter did have us exiting our shorts around the 1120 area (at a loss) but since I wasn't able to post it here I am counting as if the short is still on.

If we hadn't, we would be up around 75% since inception instead of the current 53'ish %. We still managed to turn out a eek 5% increase in the portfolio but we always want to achieve more here at myBullmarket.

Even with all these intrinsics and episodes around the portfolio we are still beating the S&P for the year by a reasonable margin (although we should've been demolishing it). YTD we are up +13% while S&P is up +8.9% all this by being hedged most of the year and only invested in 75% since we still do have 25% in cash.

Along the way some of our stocks have been through some changes, so if you're following us you probably noticed that DECKERS for example, one of our best performers underwent on a 3:1 stock split and Aeropostale on a 3:2 stock split as well, so all of you have seen your shares increased. That is why in the portfolio table the entry values are now different from our original entries in order to take into account those adjustments from stock splits and also dividends.

So here is how our portfolio is currently invested:

At the end of the year we will indeed need to do some rebalancing, since some of our allocations are now going out of our threshold values.

Stick with us because there is still a lot more to come.

Hapy Thanksgiving!

A recall on our Dollar calls...

I've been wanting to make this post for quite sometime.

A post with our track record on the USD calls and how right we, here at myBullmarket, have been regarding the USD. We have spotted all the big moves and turning points in anticipation, sometimes MONTHS ahead.

I am of course proud of these calls, but one shouldn't take himself too seriously on these occasions. Anyhow here's a graph with our calls for the past 1.5 years:

Luckily we have been right for the most part or at all big turning points. Happily for us of course. Now where to?

Well, as I posted back then my belief was once we reached the 1.40 level we would resume our trend to the downside, so now it's anyone's guess where the Euro will go. My belief again is that ultimately we will breach the 1.20 level once again, but first things first... Before that I think in the short term we will visit the 1.25 level and the EURUSD is currently at the 1.34'ish level.

I will later make a follow-through post on this matter about the USD and also other stuff such as our LMP Portfolio (which has been pretty much flat during the past few months due to our hedged position) and some other topics.

Seat tight and enjoy.

Tiiiimber !

...and silver is pretty much in the crapper now !

Last night's post it seems was exactly at the right time... check the graph on silver. It reached the mid-29's and once it touched the trendline I had up on the chart it made a big reversal... and if the rise in the past few weeks was amazing, then this reversal is jaw dropping... just refer to last night's post.

What will be of silver from now on? Well I don't know but this has a very good chance of being the reversal point for silver and ultimately for the US Dollar as well...

Return of the Jedi

Hello everyone,

After a long hiatus due to professional reasons I am back... and in force I hope. I also endured a little surgery not too long ago, but this has also passed by. The reasons are not to be alarming but nonetheless I will still have to undergo surgery one more time in a couple months but then all is set.

There is so much to talk about that I don't even know where to start. The markets in terms of the stock markets have been pretty much range bound since the last time I posted. But in the commodities arena... my oh my... there are some beauties out there... but also don't forget that beauties can turn into ugly monsters in a matter of an instant at times.

One of those beauties is SILVER.

Silver has exploded up high for the past few weeks, and lucky me I was on board for most part of when the breakout took place. But it bothers me... the pace of the rise has been pretty much parabolic and sentiment among traders in silver is sky high at 98% !! This means only 2% believe silver will go down in the future...

You, as long time readers of myBullmarket, know that when the majority is on the wagon it's usually when this one derails off course.

Silver looks to be such case... in a blow off top manner, these type of movements end in only one way, the spectacular rise gives turn  to a spectacular downfall as well...

I know I know... "Oh but the FED is printing billions after billions... silver will go through the roof with so much printing". While the FED may be printing like there's no tomorrow, I'm a firm believer that markets ultimately will go wherever they want to, with FED or no FED... remember last year when everyone was advocating the downfall of the Dollar for the same reasons? "Hyperinflation this, hyperinflation that...." What happened? The dollar rallied from 74 up 'til 89 in the subsequent months, and here at myBullmarket we anticipated that move.

6 months later and with EURUSD in the crapper myBullmarket made use of the "Magazine Cover" curse, when magazine The Economist had in their cover the enterings of Leninegrad making allusion of the downfall of the Euro, and we anticipated a move upwards in the Euro for a few months. It has been 4-5 months since then, and with the Euro now at 1.40's I think we have the same type of contrarian signal once again...

The Euro looks poised to start a decline for the weeks to come and silver in my opinion... well a picture is worth a 1000 words they say...

See how the move looks parabolic? Like I said these type of moves that are spectacular in a way turn out to reverse and do it so in a spectacular fashion as well...

In the graph above we have silves again ... we may have some more room to the upside... there is strong resistance at the top of the channel around 30 USD per ounce and that may well be the point where silver reverses and starts a meaningful or a very nasty decline. Also 30 USD is also the target from the inverted H&S formation that went from 2008-2010, so we have 2 points of confluence in resistance...

Therefore I'm starting to be itchy with my position in silver and will start to scale down along the way up but always leaving a few so if a stronger trend happens to take place I will take advantage of it... but I doubt it. Although trends usually do go way beyond of what most people anticipate...

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Disclaimer: The author holds long positions in Silver and long positions in EURUSD. The author does not take responsibility from the actions taken by others. The opinions listed on this article are of the author only, and shall not be deemed as financial advice, or any other sort of advice. All visitors to the blog should do their own research before making any decisions. This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses any one might sustain from the content provided. Author is not a registered financial advisor. Author does not engage in dispensing financial advice.

New trade

September 1st, at the open, once again we'll short SPY at 100% the value of our portfolio. (If someones portfolio is valued currently at 25k then it should be a short worth that amount, etc).

Hope this goes better than last time.

LMP update

We'll close our S&P shorts tomorrow at the open.

LMP End of Week update

Though we didn't make money today, we still managed to outperform the market by a mere +0.06%.

I'm happy with the performance so far, and I hope the overlay "hedging" strategy helps you sleep better at night. Let me know, after the fact, since we've had the last couple months have been down months, if the strategy benefited you at any level. Let me know your feedback.

So far, we've been able to maintain the profits, while the market has been going down.

Another short stat for the portfolio is:

- Market return Year-to-Date: -7.35%

- LMP return Year-to-Date: +7.8%

In my opinion for such a low transaction portfolio this is a huge over performance, we are not trading, our stocks have been held around 12-13 months ! I'm happy with this...

I wish big returns for all of us in the coming years...

And to all Americans out there reading myBullmarket, I wish you a happy 4th of July !!

House numbers

Today the house numbers were really really bad: -30% which was a number 3 times higher than what it was expected.

This is what I've warned before and before, without the FED intervening the market just collapses. We've seen good numbers for the past 12 months, exclusively due to the programs that the FED implemented throughout the country in order to hold the prices. So, once they ended the programs back in April, we now see these numbers !
Now what will they do? Let the market function properly or intervene once more ? If they do, where will they get the money? Print it? They can't hold the prices forever... either it breaks, or they will have to print themselves out of this mess, and then face freakin' super inflation. No matter what the step is, it leads to a crisis either deflation or superinflation...

Again, the crisis is en route !

P.S - Today was another good day for the portfolio ! Despite of the decline of the markets of -0.5% and in the middle of the day the markets even got to -1.7%, the portfolio ended the day in the green at a variation of +0.53% ...

Let's hope it keeps this way on the down days ;)

A few stats:

+47.16% return since inception (dividends not included)
+24.52% annual return (dividends not included)

Portfolio vs. Market = +60.54% (dividends not included) - our overperformance from yesterday increased from the high 59.xx%'s to 60.54% an increase of almost 1% which is great !!

Market Return since inception of Portfolio: -13.38% (dividends not included)

June Market Return: -6.1%
June LMP Return: +2.02% 

What does this mean? Translating it, it means that yes our stocks as a whole went declined as well, but they declined only -4.08% while the market declined more than 6%, and since we are short the market, thus the difference is our gain.

LMP Update v2

We are still postponing the purchase of the new companies, which still weren't announced. They will be soon.

Apart from that, the portfolio is doing wonders so to speak. The last batch of stocks that that were bought a year ago, and sold yesterday, the average return translated into +18% (not including dividends) while the S&P during the same time period (June 2009 - June 2010) made +12.5%.

Of the 6 stocks though, the outperformance clearly came from 2 companies only, but that is to be expected. Some will underperform (usually the majority) while a couple ones will make heavy over performance covering all the underperformance of the other stocks and then some making it possible to beat the market.

Also I'm glad we did make the change on the strategy as well. The hedging part of our portfolio, where I use a longer term version of "Zé Manel" serving as an overlay to neutral our portfolio by shorting the market as a whole, while keeping our beloved stocks. Since we first started this overlay, our overperformance increased from +46% to +60%  as of today !

 This means that our stocks as a whole have been falling less than the market as a whole, and at times even being able to make a bit of money. Of course under this strategy the goal is not to make money, but to hedge our portfolio of market risk and to maintain our gains and for us to be dependent on our stock picks exclusively.

For example, today which was a down day for the market with more than 1% down, we actually managed to gain a few dollars with an up day of our portfolio of +0.50% ... I wish all days could be like this :) it won't... but we should keep our eyes on the big picture, and I believe we really do have a winning strategy here

EDIT: The portfolio as of today

LMP

We sold the shares today at the open, as it was issued on Twitter and on the chat room. So far we haven't made any move regarding purchases, and I will wait it out a bit to see if the current weakness develops into more selling of the broad market or not.

Regardless of the decline, I'm happy to say that the portfolio managed to squeeze a little gain and to increase by a greater number the margin we had to the market. While last week it stood around +52.5%, today it stands at +57%. Of course, this is both a consequence of being short the broad market and at the same time our stocks as a whole are outperforming.

I will keep a close eye on the market this week and try to see, if we should get in the new equities or not.

Enjoy the good weather !!

LMP update

Tomorrow at the end of the day will announce the new stocks that should replace the old ones in our portfolio. So keep an eye on the site tomorrow...

Epic...

Not much to say about the markets, this trading range seems to be ongoing and so far is hard to know who will win in short term, if bears or bulls...

Nonetheless, in Wimbledon something epic just happened with Mahut and Isner on the 5th set going 59-59 with 10 hours under their belt for the match... Play was suspended for the second straight day.

Counter-rally done?

I was watching the price action today, and from the looks of it, at least from my perspective there is good odds that this rally may be overdone now.

In terms of Elliott Wave, the correction has been in very mushy waves, not being impulsive thus corrective... I think wave 2 may actually have ended today, where the correction took form of a ABC flat formation.

We'll see how it goes...

End of the Euro ?

Remember back in September 2009 when I posted articles talking about the doom of the dollar? At the time, the "End of the Dollar" as they called it, appeared in front covers at least in Portuguese financial media...

Well, right now, this couldn't be any more explicit:

A major economic/politic magazine with such an explicit cover, it makes a really great contrary signal. Most likely this cover will mark a bottom on the Euro as it is common on these kind of things, as I've said before the media is always the last to join a trend...

Some dark shit...

Are we in for a big run up in equities?

I can't ignore stuff like this...

Although currently we, in myBullmarket are bearish and our portfolio is hedged as well against any decline, this article makes a compelling case for a nice run up...

According to TRIN indicator the bearish move looks exhausted:

June 7 2010

Of course one, under an EW perspective could argue that since we are in the largest degree wave ever pretty much, previous records on indicators, etc, are expected to be broken... we'll see to which way does it brake.

Heavy reading...

I am an avid reader... I read whatever I can get my hands on, especially on what is related to markets... Today I just ordered a few books:

- Against the Gods, Peter Bernstein

- Manias, Panics and Crashes, Charles Kindleberger

- How to make money in stocks: A system for good times and bad by William O'neill (the so famed CANSLIM system method comes from this book)

- A practical guide to ETF trading systems, Anthony Garner

- The little book of behavioral investing by James Montier

- The Big Short by Michael Lewis

Greek Crisis for Dummies...

The Greek Crisis Explained, Episode 1 from NOMINT on Vimeo.


The Greek Crisis Explained, Episode 2 from NOMINT on Vimeo.


The Greek Crisis Explained, Episode 3 from NOMINT on Vimeo.